Travel firms lose millions in transaction failures

Transaction failures are costing major travel businesses $11.5 million a year as IT systems become more complicated, according to a study by software business Progress.

The failures range from error messages appearing during booking to inaccurate inventory and pricing displays. The Progress study looked at 149 travel businesses with a minimum turnover of $200 million. Almost half the sample turned over more than $1 billion a year.

Dan Foody, vice-president of the actional department at Progress, said: “IT systems for travel businesses are handling a lot of data from various electronic channels and that complexity is leading to more transaction failures.”

Part of the reason is that companies are trying to reduce costs by delivering services through multiple channels. “Every business is forced by competitive pressure to look at increasingly complicated yield-management techniques,” said Foody. “The side effect of this complexity is that some transactions are lost.”

Foody described the resulting costs as significant. The businesses surveyed employed an average eight full-time staff to deal with transaction failures, but the cost of losing customers may be greater. “The average figure of $11.5 million per annum in lost business is conservative because it’s difficult to quantify how much business is lost through poor customer service,” said Foody.

However, he added: “There is a feeling in travel that big businesses can live with it because it’s the same for everyone. Having some degree of transaction failure does not equate to a competitive disadvantage.”

Progress is  Nasdaq-listed company offering a range of transaction-assurance tools.

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