How can online travel agencies use Airwallex?
By 2030, the projected size of the global online travel market is on track to reach a whopping US$1.56 trillion, with an impressive Compound Annual Growth Rate (CAGR) of almost 13% from 2023 onwards.
As the world eagerly embraces travel again post-pandemic, online travel agents (OTAs) have become the go-to source for organising travel plans and connecting consumers with their dream destinations. For OTAs, however, the path isn't entirely smooth. They face hurdles like unnecessary cost burdens and operational inefficiencies that can dampen the potential gains from the surging demand from jet-setters.
Read on to discover how cutting-edge payment technology solutions are simplifying operations and boosting profitability for OTAs by streamlining transactions, offering more economical international payments, and easing worries about fraud and risk for both customers and service providers.
What’s driving growth in online travel bookings?
A few key factors explain the rapid growth in the online travel market and OTAs, including:
Tech-savvy travellers armed with smartphones and an appetite for adventure who vastly prefer websites and apps for their travel bookings over brochures, bricks-and-mortar agencies and traditional channels. Surprisingly, it’s not just Millennials and Gen Z fuelling popularity - the "Boomer" generation with “time, money and the urge to travel” also accounts for a healthy proportion of the market.
OTAs have stepped into the fray to ease the process, offering travellers infinitely more choices. Added to this are the collective wisdom of online reviews and the ability to compare various travel options, making it easier than ever to make more informed decisions.
E-commerce technology has progressed in leaps and bounds, allowing smooth and hassle-free flight and hotel bookings and giving travel consumers increased confidence in making online payments.
The market in Asia-Pacific shows particular promise for growth, with China and India at the forefront. In these countries, the expanding middle class and increased disposable income are fuelling the thirst for travel. Along with this, the huge uptake of mobile internet means that OTAs are becoming the preferred choice for booking travel.
Current challenges for OTAs
The appeal of OTAs lies in their role as a one-stop-shop to reserve, pay for and coordinate airline, hotel, car rental and other services. However, while customers appreciate the ease of this process, OTAs are left juggling complicated payment processes and dealing with ever-narrower commissions and profit margins.
Specific pain points include:
Payment and foreign exchange costs: With such a dispersed customer and supplier base, OTAs bear significant payment-related costs. A lack of cost-efficient cross-border payment solutions means that they are often paying a significant level of avoidable fees and charges.
Complex workflows: OTAs handle large volumes of bookings daily. Without sufficiently robust and scalable systems, operations can be impacted and business growth can be compromised.
Vulnerability to fraud: The travel and transport industry has become a “priority target” for cybercriminals, with travel providers losing billions every year to scammers and hackers.
Relationship conflicts: As all stakeholders within the travel provider ecosystem attempt to mitigate fees, managing costs while maintaining healthy partner relationships can be tricky.
To get ahead, OTAs need to take a more comprehensive approach to payments – one that puts equal importance on customer experience, cost-efficiency and integration with the wider travel supplier network.
Optimise your OTA with Airwallex
Airwallex is a game-changing solution for OTAs looking to maximise efficiency in payment processing and bypass the barriers and bottlenecks of using traditional banks. It offers:
Simplified currency management and cost-effective conversion
Efficient payment processing and a seamless GDS integration
Customer payment flexibility and enhanced security
In a nutshell, here’s how it works:
Benefit from market-leading FX rates. Regardless of the transaction size, as an Airwallex user, OTAs can set up balances in the global currencies they are being paid in (like USD, THB, SGD, HKD, etc) and benefit from near interbank currency conversion rates. Airwallex Global Accounts let you set up local currency accounts around the world in minutes, skipping the usual lengthy processes and paperwork.
Streamline customer payments. After accepting a customer payment, the OTA requests a single-use virtual card through Airwallex’s API. An active card is instantly generated, and the PAN is sent back to the OTA. Virtual cards carry predefined amounts and currencies and can include additional security measures, such as merchant category code restrictions, ensuring payments are both accurate and secure.
Manage transactions more smoothly. The card is used to complete the booking through the relevant GDS, marking the customer’s reservation in the supplier's Property Management System (PMS).
Easily settle with suppliers. When the customer completes their flight or checks out of a hotel, the supplier processes the payment using the virtual card details stored in their PMS, generating a transaction over the Visa network back to the Airwallex currency account. The transaction is approved and completed seamlessly.
Looking to explore the technical specifics of how we support OTAs? Read more in our step-by-step guide.
How Travello took off after partnering with Airwallex
“Airwallex has been a fantastic integration and addition to our company. When you’ve got a lot going on, you need to have reliable platforms that don’t go wrong, and that’s the case with Airwallex - it just works.” Mark Cantoni, Co-Founder, Travello.
Plucky travel and experience platform Travello is one OTA benefitting from its partnership with Airwallex. Growing from a social network app for travellers, the backpacker-focused business now organises tours, experiences and activities in countries all over the world.
“We’re always accepting money from customers in different currencies, and then paying our operators in another currency again,” says Co-Founder, Mark. “Before Airwallex, we were constantly being subjected to high foreign exchange costs that were ultimately bringing down our bottom line.”
Not only is making and taking international payments now a breeze for the Travello team but using Airwallex for everything from Borderless Cards to software subscription savings has made business so much easier and led to a sweet $25,000 a year in savings.
Get started with Airwallex
We can help you get results like Travello by transforming your operations and unlocking savings through more favourable foreign exchange fees, better payment processing, convenient card transactions, and more.
It’s quick and easy to sign up and create your free borderless account.
Disclaimer: This information doesn’t take into account your objectives, financial situation, or needs. If you are a customer of Airwallex Pty Ltd (AFSL No. 487221) it is important for you to read the Product Disclosure Statement (PDS) for the Direct Services, which is available here.
Izzy is a business finance writer for Airwallex. She specialises in thought leadership that empowers businesses to grow without boundaries.