The collapse in income following the pandemic’s onset in March 2020 sent a shockwave through the travel and tourism sector. Large travel and tourism firms in the United States — those with at least $100 million in annual revenue — had 44% of their bookings either rescheduled or canceled. The result was a mad scramble to mitigate this sudden cash flow interruption and enhance payment efficiencies to help keep businesses afloat.
This is one of the findings uncovered in the Smart Receivables Playbook: Rethinking Payments Processing After The Pandemic, a PYMNTS collaboration with Flywire. We surveyed 459 payments professionals between Oct. 30, 2020, and Nov. 12, 2020, and conducted in-depth case study interviews in October to provide a front-line perspective of how the pandemic has impacted businesses in the travel and tourism space and how these firms view their approaches to payments management in this challenging environment.
Key findings from PYMNTS’ research include:
- Large U.S. travel and tourism businesses spend 3.2% of their revenue on payments processing, on average. Many spend even more. Nearly one-fifth report spending more than 4% of their revenues simply processing payments, putting added pressure on their payments flows. It follows that most also consider their inefficient payments processes to be just “somewhat” effective, at best.
- Sixteen percent of large U.S. travel and tourism businesses say international payments processing is their biggest payments management pain point. Other key issues that they face are having insufficient data to handle payment questions from customers, waiting too long to receive payments and managing too many vendor relationships at a time.
- Twenty-three percent of large U.S. travel and tourism companies say they are highly likely to switch payment processors. In total, 62% of these businesses would be at least “somewhat” likely to change payment processors. This is one of the key ways travel and tourism companies are working to streamline their payments processes going forward.
These are just a few of the insights uncovered in PYMNTS’ research. SmartReceivables Playbook: Rethinking Payments Processing After The Pandemic explores how the past 20 months have impacted businesses in the travel and tourism sector and the steps they are taking to regain the financial ground they have lost since March 2020.
To learn more about how efficient receivables management can address pain points and improve margins in the travel and tourism sector, download the playbook.