Two thirds (66%) of consumers would be more likely to buy from a travel provider if it allowed them to pay in instalments and more than half of consumers (56%) would consider buying higher value travel options for their entire trip, if they had the option to “buy now, pay later,” according to new research from travel technology specialist Amadeus.
More than 5,600 consumers from across ten global markets were interviewed in its recently released research – ‘Frictionless travel payments: From complexity to competitive advantage’ – to better understand travellers’ experiences at the point of purchase. The findings certainly provide travel retailers with insights into the travel payment landscape, evolving consumer demands and how these should translate to the checkout experience.
The research found that travel and payment trends are colliding to drive new behaviour, with 90% of travellers considering the payment experience to be important to the overall travel experience.
While booking travel brings excitement for consumers, it also brings fear with 54% saying hidden costs and extras are the biggest concern when planning a trip. In fact, 41% of consumers said they would abandon a sale due to unforeseen costs at the checkout, with millennials and Gen Z consumers three times more likely to ditch their travel baskets than travellers over 50.
Even if they conclude their travel booking, three quarters (74%) of respondents said a poor payment experience reduced the enjoyment of their break. But, over two thirds (70%) highlight that if you get the booking journey correct a good payment experience would make them select one travel provider over another.
As the average traveller now relies on more than four different payment methods throughout their trip, the research highlights that more thana third (38%) of travellers cite payment method choice (e.g. cards, bank transfer, e-Wallets) as their number one requirement. However, what matters even more is transparency, with almost half (47%) saying unexpected fees, charges or foreign exchange surprises are a major point of friction.
Travel doesn’t come cheaply and isn’t necessarily an impulse purchase, but involves a lot of thought and planning. It is therefore no surprise that consumers are increasingly looking at ways to offset the costs of their holidays, and the size of this demographic could certainly influence travel retailers strategies.
With two in three (66%) travellers more likely to buy from a travel provider if it allowed them to pay in instalments, it is an option that many would consider, especially with the added finding that over half of respondents (56%) would consider buying a higher value travel option for their entire trip, if they had the option to pay in instalments or “buy now, pay later”.
The Amadeus research also acknowledges that travellers are increasingly delaying the booking and payment of their trips, with three quarters of consumers leaving booking of both travel (74%) and accommodation (75%) to less than two months before their trip.
One of the primary reasons for late bookings is to save money (23%), with consumers looking to take advantage of late deals from booking agents, hotels and airlines. Another reason is fear of experiencing bad weather or personal risk (15%), with Chinese travellers the most risk adverse, with 27% choosing to book late so they don’t get caught out.
With online bookings on the rise, there is also an emphasis on ‘convenience’ when it comes to booking travel. Consumers are more comfortable with trading their personal data for a faster booking and payment experience, with 44% of consumers preferring a travel website that allows them to save their payment information.
Surprisingly, only a quarter of consumers surveyed would welcome more “mobile friendly services”. This trend, however, is flipped in markets where mobile is the primary online channel, according to the Amadeus research, for example in China (42%) and India (39%).
Bart Tompkins, managing director for Payments, Amadeus, is confident that 2020 will be the year in which we see travel sellers aligning their payment strategies to meet not only customers’ demands but also their preferences. “It’ll be the year where we see a significant step forward in delivering a frictionless payment experience in travel,” he predicts.
However, he notes that with three quarters of travel firms still finding it hard to offer a simple and consistent payment experience “there’s work required to deliver on travellers’ desire for greater choice, transparency and security”.