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The Business of Travel Brokers

A new record high as of June 2021 show that 62% of Americans feel comfortable taking a vacation and that will translate to a total summer vacation spend this year that will exceed the $150 billion mark for the first time, totaling $153.7 billion.

We discussed in our previous post the travel trends this year and why the industry is still considered risky according to payment processors and banks despite its optimistic recovery from the pandemic. Let's continue to dive into the travel industry players and the challenges they're constantly facing.

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Travel Brokers

Travel brokers are also known as travel agents handle all aspects of your trip from air tickets to car rentals, train reservations, accommodation, and activities.

Online Travel Agencies (OTAs) may specialize in accommodations, cruises, corporate travel, airline tickets/flights, tours and activities, restaurant bookings, or some have become a one-stop shop such as

Most travelers will use a metasearch engine, otherwise known as an aggregator, which retrieves information from other websites and presents the information in an easy-to-digest format. These aggregators include TripAdvisor and Google Hotel Ads.

Within the travel industry, this will typically mean drawing information about flights, hotel rooms, car rentals, restaurants and travel packages, and presenting them in a list format, making price comparisons easy. Yet, metasearch engines do not actually sell inventory directly and instead link users to external booking platforms.

By contrast, an OTA will actually sell inventory on behalf of travel companies, in exchange for a commission. They will usually have their own in-built booking engine and travel companies pay the commission in order to benefit from the increased number of bookings, even if direct bookings would be preferable.

Ticket brokers are able to save you money because they can mix and match flights from different airlines. Like any method, booking through ticket brokers comes with pros and cons. The biggest pro is the amount of both time spent researching itineraries and money you will save. However, the biggest con to booking through a ticket broker is that they won’t be able to provide the same flexibility in changing your travel dates. This flexibility of booking cancellations and refunds will be difficult if there are doubts to itineraries, dates, etc.

Travel Consolidators

Travel consolidators are high-volume ticket brokers for discount flights. They purchase large volumes of flight tickets and sell them to customers for a lower price than the airline's published fare.

Travel consolidators can negotiate good discounts because of the sheer volume of tickets they purchase. Some consolidators have contracts with airline companies. They usually negotiate for a specific region or country, a destination that is popular with travelers. Some consolidators are even owned by the carriers themselves. Big airline companies may have several travel consolidators under their wing, which helps with the disposal of unsold tickets. Travel consolidators can purchase tickets at a discounted price right up to the date of departure.

Some consolidators are online ticket specialists like Expedia and Travelocity. Expedia is one of the largest of the travel consolidators. It offers discounted tickets with hundreds of airlines.

Travel Payment Challenges

One of the major stumbling blocks for a small travel brokers compared to the established players is trying to scale their booking process.

Most of the payments made by tourists and consumers are made by debit or credit card. When travelers are ready to buy, they want to be able to do so online, quickly and efficiently.

This poses a significant challenge for small travel operators who don’t have the budget to build bespoke online payment solutions and who often rely on payment methods like bank transfer, Western Union, PayPal, and check to take payments.

Small travel brokers are often left confused on how to integrate a seamless payment and booking solution for their business.

Sounds familiar?

There are many things to consider if you are planning to set up your own payment system. Do you want the responsibility of PCI compliance, or have to find a merchant account provider that accepts you, as well as finding a payment provider.

Payment inefficiencies have taken the form of high payment processing costs, breakage, error-prone and expensive manual settlement procedures and, above all, non-payment risks.

Transaction fees can negatively impact the bottom line. For many travel companies, the costs of cross-border payments are exacerbated by exposure to FX fluctuations, fees, and mark-ups, most of which are not transparent.

Partnering With the Right Payment Solution For Your Business Needs

Being able to accept online payments is crucial in the travel industry. Are you a group travel company or tour operator seeking an efficient, easy and reliable payment gateway company for your customers? Or is your business ready to start accepting credit card payments?

The complexity of managing payment systems is the biggest source of payment-related financial stress. For a travel platform or marketplace, payments orchestration is crucial and the ability to be nimble and to unify all those integrations. Merchants need a way to easily integrate with specific gateways, payment service providers for fraud, and build loyalty.

There are ways to a smoother ride. The key features to look for in a payment solution include a secure and safe environment for merchants and consumers to transact, a wide selection of payment options and currencies, as well as low fees.

XPAY provides you the payment solutions so your customers have a secure and streamlined way to pay while your business can focus on what you do best - building unforgettable experiences.

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