Travel was clearly one of the worst affected sectors throughout the pandemic with widespread restrictions both globally and locally. We spoke with Damien Cramer, our Global Head of Travel and Airlines, for his insight into how the sector is recovering and how quickly we can expect a return to normal levels of activity.
As Global Head of Travel for Worldline, the last two years must have proved incredibly challenging. How have you and your team had to adjust and how does travel fit into the Worldline infrastructure?
My joining Worldline’s Digital Commerce operation in Southeast Asia as Global Head of Travel and Airlines proved to be a true ‘baptism of fire’ as I started a mere fortnight before the pandemic took hold. This had the immediate consequence and subsequent challenges of our having to interact and deal with customers and merchants in a completely different way to previously.
Travel has always been a cornerstone of the Digital Commerce industry. It also encapsulates some extremely interesting companies and sub-sectors, so our team is very conscious of how just about everyone on the planet is impacted by changes to the travel norms in some way or another and that Worldline can make a huge difference to their ongoing travel experiences.
Are the worst effects of the pandemic now behind us and if so, how rapidly can we expect the recovery to take place?
Perhaps it’s an oxymoron, but I would say the travel industry is currently undergoing a period of both resilience and fragility.
The strictures of the pandemic have led to enormous pent-up demand within the travel industry. However, episodes such as the outbreak of the Omicron variant showed that demand could and did crash spectacularly and almost immediately – yet the subsequent bounce-back would be equally rapid. Hence the ‘circle’ of resilience and fragility is complete. In the recent Omicron wave we saw volumes drop dramatically-but then recover very quickly over a period of about 5 weeks. We are now week on week setting new volume records for travel bookings since the pandemic began.
What key trends are you seeing shaping the industry and have these been brought about simply by the pandemic or were they emerging in any event?
Customers now not only expect a high level of flexibility, but they also demand it. In the hotel industry, for example, the days of “no cancellation, no flexibility”, “book now, pay now”” etc. in return for a discounted price to secure cash flow, seem to have been completely superseded by the willingness of customers to pay a premium in return for greater flexibility and peace of mind. This is particularly true in cross-border transactions where the risks if travel disruption are still significant. This is also true for the airline industry, and pricing strategies and dynamics are quickly changing to reflect this trend. People’s memories are long, and I think this trend will remain for the foreseeable future, especially amongst those who personally had their “fingers burnt” during the pandemic.
Hotels have been quick to adapt to the much-increased awareness and expectation of the need for enhanced health and safety environments across their industry. This has led to a rapid acceleration in utilising the latest technology to create a customer experience that is as contactless as possible. This also offers additional benefits by allowing the merchant to engage more meaningfully across the whole period – from booking, to arrival, and throughout a guest’s stay – particularly in the higher-end sector of the market.
Demand for car hire has also soared, especially at the shorter range and more cautious end of the market.
Finally, there is the changing dynamic within the travel sector of customers changing their allegiance and / or preference when considering use of travel agencies versus booking direct. Our experience suggests that Online Travel Agents (OTAs) need to adapt their offering and working practices to meet these changing preferences, particularly around the level of expected service in scenarios involving rebooking, cancellations etc.
What are your key priorities for Travel in 2022 and are they the same across all modes of transport and geography?
Our number one priority is to ensure our organisation helps our customers as this recovery accelerates. It is important to recognise that not all markets, geographically and sectorally speaking, are recovering at the same pace. The very raison d'être for Worldline’s Digital Commerce business is to help our customers provide local payments solutions to their consumers wherever they might be. These payment preferences and requirements have likely evolved over the last couple of years as more digital forms of payment have been adopted.
The ‘Buy Now Pay Later’ phenomenon seems to have a natural fit within the travel and payments sector and is growing rapidly. Hence Worldline has recently signed a partnership arrangement with a company called Fly Now Pay Later operating in this space.
Open Banking also represents an exciting opportunity as a branded payment option for, say airlines, particularly in Europe, with several advantages for both the merchant and the consumer.
What key advice would you give to international travel businesses looking to emerge successfully from the extreme challenges of the past two years?
There are many marketplaces, and in certain situations where even the best systems struggle to work. Optimising your payment network is critical. All markets are evolving more rapidly than ever, as are digital payment methods. In a post-pandemic world, merchants looking to re-enter certain markets should carefully check that their payment options and customer expectations are the same as pre-crisis and / or re-evaluate their approach to address the new status quo.
