October 29, 2020
Travel Agency and Airline Payments Thought Leadership Series
Agents and Airlines: The time to develop a B2B Travel Payment Strategy is now.
Why? Because the travel distribution landscape is changing. And CX is now the key driver behind both airlines and travel agents’ business strategies. When it comes to air distribution, B2B travel payments and CX are strongly connected. So, it’s critical travel suppliers have a B2B travel payments strategy that considers the many elements that make that strategy work. Here are my thoughts:
CX and the retailer model
To stay competitive, expand and keep customers, travel agencies have had to move to a retailing business model. Being able to control each step of the transaction enables the best customer experience. By agents driving sales through mobile apps, leveraging AI to improve end-to-end traveller experiences, and investing in B2C payment methods to accept customers’ preferred payment choices.
Airlines too have embraced the retailing model for direct distribution. Focusing on improving travellers’ end-to-end journey by investing in mobile apps, offering ancillaries, some B2C payment methods, and catering to traveller preferences. However, airlines can’t afford to ignore the impact of the retailer model on CX when distributing indirectly via travel agencies.
Agencies and the retailer model
An agent’s B2B travel payments strategy should complement its B2C payments strategy in the retailer model. It should grow and protect their business. And reduce costs via payment efficiencies, like streamlining conversion of various B2C payment methods to pay suppliers. Or addressing costs and risks of making B2C payments available – like implementation costs, and the ongoing costs of acquiring transactions and preventing fraud. All of which is even more complex if agencies have different B2C payment methods across markets.
A B2B travel payments strategy is vital for an agency to succeed in the retailer model. The right approach can offset some of the risks and inefficiencies of accepting B2C payments, and protect the whole travel value chain against costs of fraud and supplier default.
Airlines and the retailer model
The retailer model poses challenges for airlines in two ways. In direct distribution, think increased competition from legacy and low cost carriers, adapting to traveller expectations, and learning how online sales portals can drive CX.
And when distributing indirectly via travel agents, airlines must consider how their B2B travel payments strategy with their agent partners impacts CX. Many travellers like to book through travel agencies, so airlines need to nurture strong partnerships with agencies to increase their market reach.
Their agency partner’s ability to operate a successful retailer model, and enhance CX, is consequently just as important to an airline’s distribution strategy.
Optimise payment and customer experiences
Most travel and airline industry payment discussions still focus on B2C payments. But understanding how B2B travel payments impact travellers is important. For agents, how the other end of the payment chain is executed influences their ability to sustain the retailer model. And this is how airlines can drive CX for all travellers.
Rethinking B2B travel payments is an opportunity for airlines and agencies to work together, for mutual benefit. COVID has highlighted how necessary this is to ensure the most financially sustainable way to continue doing business.
Livia Vite, Head of Airline Partnerships, eNett International
You can read Part One of our thought leadership series here. Or if you’ve got a question about how a B2B travel payment strategy can drive your business success, get in touch.