Travel agents must be prepared for the unexpected

Thiago Medeiros

Head of Sales and Growth, Payer Business, Payments, Amadeus

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Travel is one of life’s pleasures. However, as much as some of us enjoy planning future trips, we can never quite rule out the unexpected.

Disruption in travel is sometimes inevitable as not all events can be foreseen and controlled. It can come in the shape of natural disasters, overbooking, strikes, political uncertainty, and technical or logistics issues. These factors can often impede and sometimes even halt the work of airlines, airports, and other travel providers.

For instance, the cancelation or delay of a single flight can have an impact on every flight connected to it for the whole day. This can put pressure on any airline’s bottom line which is why, over the past few years, some airlines have struggled in increasingly difficult market conditions.

But the numbers remain positive: when you see that 79 new airlines began flights in 2017, it’s clear to see the industry remains resilient. That being said, there are several considerations for a number of stakeholders when a carrier is going through a difficult period.

We know from our work with travel agents that airline operations can have a direct impact on a travel agent’s cash flow which is to say that any unexpected activity can put serious financial strain on already tight margins. The difficulties of a large airline carrier in any given global market would be damaging for travel agencies and could put huge pressure on their finances.

What if I told you there is a workaround? Well, there is and it’s called virtual cards. Adopting a safe payment solution is an effective way for travel agencies to protect themselves and their customers in the event of a supplier default. Backed by Mastercard and Visa, they  have chargeback capabilities under the card scheme’s rules.

In the case of airline defaults, chargebacks can provide a much faster method for recovering funds – often in a matter of days, compared to the months or years that traditional bankruptcy or insolvency processes may take.

Along with making sure money isn’t lost when airlines are facing disruption, virtual cards give travel agents a second level of protection, since they also minimize the risk of fraud through the use of unique card numbers. Virtual cards work in a similar way to credit cards, but because they are single use only, they can no longer be used after a payment is made.

This method of payment also provides greater spend control by predefining rules such as value, currency, and/or merchant. It can cut the time travel agents spend matching transactions to invoices, through the use of auto-reconciliation.

In such a fast-moving industry, it’s never been more important for travel agents to protect their business and customers. Implementing a payment method that provides quick and safe recovery mechanisms will ensure minimum impact to agents’ finances and, most importantly, result in happy, returning, customers.

If you’re interested in learning more about our payment offering, contact a member of the Amadeus payments team today or take a look at our services here.