Navigating change: the role of payments and data in the travel industry
Since the disruption of the pandemic, the travel sector has worked hard to rebuild and win back travellers. We spoke to Jamie Evans, our Director of Travel, Hospitality and Leisure, about what the future holds and why payments are now riding high on the corporate agenda.
“At the moment, there’s a well-deserved boom in travel,” says Jamie. “However, there are challenges that need to be faced. Supply chains are often fragmented and inefficient. Macroeconomic headwinds are threatening business and consumer travel budgets. And CFOs are faced with tough choices around retaining working capital and driving higher financial performance.”
Talent shortages also remain an acute problem. In our research, conducted in partnership with FT Longitude, 75% of senior leaders across all hospitality and leisure businesses said their organisation’s performance has been negatively impacted by difficulties recruiting.
With so much uncertainty ahead, is there an opportunity to use the power of improved payment processes to overcome talent shortages, build greater resilience and drive operational efficiency?
How payments are becoming a ‘must-see’ destination
“Payments have always been important,” says Jamie. “After all, if you can’t take money from customers or pay suppliers, you can’t grow. However, payments have now been elevated to mission-critical status, leading to more travel organisations appointing Heads of Payments.”
As payment data takes on a more strategic role, the change is an evolution from the payment transformation that was already underway pre-pandemic. Separating payments from treasury and finance functions is allowing teams to focus on getting the most from their payment processes – from creating back-office efficiencies and better customer experience to improved working capital and market growth.
At the heart of the industry’s response is to further exploit the power of payment data. When combined with external data sources, it can help unlock emerging consumer spending trends and competitive insight. Businesses can also evaluate not just how they’re accepting payments, but whether they’re paying suppliers at peak efficiency.
Navigating consumer behaviour and experiences
Data insight could play a key role in staying ahead of what consumers expect from businesses. Our research shows that 74% of leaders have implemented improved customer experiences over the previous year.
Across all sectors, customers want to be able to pay quickly and easily using their preferred payment method. However, when it comes to travel, credit cards (and digital wallets) are likely to remain the popular choice because of their built-in protection – although if the current ATOL and government reviews substantially improve the rights of travellers, the situation may change quickly.
As more holidays and business trips are booked online, travellers are expecting to be able to interact with organisations at any time of day or night, and through the channel of their choosing, whether that’s online, in an app or via a contact centre. While innovations such as AI can help reduce the burden of customer queries, smoother payment acceptance also has a role to play – freeing up staff to add value instead of managing payments.
Doing more with less: how data and digitisation can help
“Data is also helping when it comes to talent shortages in the back office,” says Jamie. “Digitisation can help take largely manual and resource-intensive processes today and turn them into automated, almost invisible processes tomorrow.”
For many, payment data could hold the key to creating greater supply chain efficiency from a largely fragmented and diverse ecosystem of suppliers. Analysing accounts payable data gives businesses a clearer picture of who is being paid when and how much they’re being paid.
Identifying different types of expenditure makes it easier to be strategic about payments. We think about a spectrum of factors, such as value, risk and importance to the business, to determine the best way to manage that spend.
Jamie Evans, Director of Travel, Hospitality and Leisure, Barclaycard Payments
Digital payment processes, such as virtual cards, are helping businesses manage payments in the most efficient way while spreading risk and building resilience. They also offer an attractive alternative to supply chain insurance because chargeback mechanisms could protect buyers in the event of a supplier failure.
“Virtual cards could also be vital for managing growth,” says Jamie. “Travel companies often need to pay suppliers for bookings before customer payments are settled. An increase in sales can put pressure on working capital, something virtual cards can help solve with better access to credit.”
Long-haul strategies guided by payments and data
When it comes to understanding existing customers, who else they shop with and how to increase wallet share, payment data is a fantastic source of insight. However, it requires access to reliable and comprehensive external payment data.
So where do businesses go to get this rich source of insight? Research shows that while 86% of leaders in the hospitality and leisure sector work with providers of external payment data to help analyse customer trends, only 25% use their main payment partner. This suggests that businesses are missing a trick.
“The right payment provider can really offer a holistic view of what is happening,” says Jamie. “We use our data from across the Barclays Group to track payment trends across the economy, the travel sector and the client’s customers.”
This insight can be invaluable in identifying future revenue growth opportunities, allowing companies to explore and discover new target demographics to inform business and marketing strategies.
Upgrading for the journey: how Barclaycard Payments could help you
Whether driven by regulation, technology or consumer behaviour, the payment space is constantly evolving. To manage that change, you need a partner with the data capability to deliver transaction analysis as well as big-picture insight into consumer and market trends.
As a leading issuer and acquirer, Barclaycard Payments has a proven track record in simplifying payments for our customers and helping them navigate the payment landscape.
Backed by a large corporate bank, we’re able to offer our travel clients an integrated end-to-end approach to help solve their pain points, deliver excellent customer experiences and support growth.
“Listening comes top of our priorities,” says Jamie. “We start with understanding your travel organisation’s challenges or objectives. We use a collaborative approach, backed by the power of data, to ensure the best outcomes for your business – wherever it takes you and your customers.”
Head this way for more insight on your business sector
We teamed up with FT Longitude to hear what 500 senior leaders are thinking about the payment landscape today and how their businesses are preparing for the future. Read more about these payment trends or discover thought-provoking insight on these sectors.