Travel retailers at risk as non-GDS business rises

The increasing number of travel agents making bookings outside the traditional global distribution systems is driving the need for simpler payment systems, according to a new survey.

The Travel Industry Payments Barometer, by pre-paid payment specialists Ixaris, found a fifth of businesses make more than 50% of their revenue from non-GDS transactions, while three in five receive between 10% and 50% of their revenue from sales outside GDS bookings.

The survey, out today, polled 53 trade representatives, including agents, hoteliers and tour operators and found less than 10% of travel agents and suppliers believe their payment systems are completely adequate, with the biggest bug-bear named as booking fees such as administrative and credit card surcharges.

Chief executive Alex Mifsud said the shrinking share of GDS bookings, as agents put together more dynamic packages, meant payments transacted outside the GDSs were being handled manually or with disparate systems, leaving room for error and unreliable audit trails.

Companies often used corporate credit cards, provided by their banks, and statements often contained details of high volumes of bookings, making it difficult to track individual sales, refund customers, or detect fraudulent activity, he added.

“As soon as you are outside the GDSs, you are on your own in terms of payments and that’s where the pain starts,” he said.

The survey shows the trend for booking bespoke holidays is expected to increase this year. Half of those surveyed expect a moderate increase in the volume of non-GDS business and 10% expect a significant increase.

The report concluded agents need to simplify payment systems, for example through the likes of Ixaris’ ‘virtual’ prepaid card programmes – where a ‘card’ with a unique number is created for each booking and so can be easily tracked – and streamline back office fee handling and other payments.

Mifsud said many of the larger players were already realising the time had to come to change their payment systems. “The adoption of virtual cards had certainly accelerated but they are not universally used across the industry,” he said.

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