Study: Payment Choices Affect Travel

NAPLES, FL—More than one third of British, American, Chinese, French and German travelers surveyed globally (36%) are unhappy about not being able to pay the way they want when booking holidays online, according to an online survey of 7,400 consumers by YouGov and ACI Worldwide, a provider of real-time electronic payment and banking solutions. Lack of transparent pricing is another large concern for travelers, with 66% globally saying there are too many hidden fees such as add-ons when booking trips and tickets online, resulting in final prices that are different to the ones advertised.

“The global travel industry is a huge growth market worth $2.2 trillion a year, with annual growth rates of about 10%,” said Peter Moedlhammer, head of global ecommerce solutions with ACI Worldwide. “The market has undergone massive changes in the last decade, many of them driven by digitalization. Digital channels have empowered travel operators to provide new routes to market and travelers are now able to research their options online, and then choose exactly how they book and pay for their vacation or holiday breaks. What is surprising is that many consumers are unhappy with one or more aspects of their online customer journey, whether it is price transparency, the ability to make changes to a booking or to pay with their preferred payment method. If travel operators want to compete effectively in this very competitive market, they need to address these issues urgently.”

Other key findings and trends:

Travel and Booking behavior

  • On average, nearly two in five (37%) of respondents globally travel 1-2 times a year while more than one in five (22%) do so 3-5 times a year.
  • 65% of travelers globally spend between $320-$3,800 on leisure travel annually, with a third (33%) spending more than $1,300 per year.
  • Globally, 74% prefer to book their travel via a digital device (computer, laptop or mobile phone) and on average, only 10% prefer to book in person.
  • Travel comparison websites have significant market share, with 30% of travelers preferring to book via this channel.

Payments preferences

  • Globally, 30% of travelers want a range of payment options available and 36% feel frustrated if they can’t pay via their preferred method.
  • Credit and debit cards are still broadly the most popular means to pay for trips globally (36% and 29%, respectively), with PayPal taking a strong market share (17% globally) in most countries and across age groups.
  • Local payment methods feature strongly in Germany and China; in Germany 33% of consumers prefer to pay via direct bank transfer, in China 78% use Alipay as their preferred payment method.

Transparency and data security are vital for customer loyalty:

  • 66% of respondents find a lack of transparent pricing annoying.
  • 32% of respondents are concerned about what travel companies do with their personal data and 34% say operators should be more transparent about what they do with customers’ personal data.

Experience of Fraud

  • 33% of travelers globally have experienced fraud either while booking a holiday or while traveling.
  • The number of U.K. travelers having experienced fraud is the lowest (18%), with 30% of Germans, 36% of Americans, 35% of French and an alarming 61% of Chinese travelers stating they had been victims of fraud.

“Our findings highlight that globally, there are a number of key service trends travelers value most when it comes to booking trips online,” said Moedlhammer. “Local and alternative payment preferences, as well as fraud and security, impact not only the purchase, but also the travel experience. These factors influence travelers’ choice of operators, and whether they return to those providers in the future. With downward cost pressures and the strain of competitive threats weighing on travel operators, the need to understand customer buying drivers and preferences has never been more important.”

Recommendations for online travel operators:

  • Understand the local and regional payment preferences for target traveller markets – worldwide there are more than 300 different online payment methods—don’t assume a one-size-fits-all approach will work.
  • Research current and emerging alternative payment methods which can improve conversion options on high-priced vacation and travel-ticket items—lost opportunity cost can hamper revenue and future business.
  • Develop an integrated payments and fraud management approach for managing transactions—travelers want to feel confident and secure in the operators with whom they choose to do business.

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