Why travellers are turning more to cards

As the travel market starts to open up again, we are seeing greater activity in the industry and one of the interesting aspects is the move towards payment by card for consumers.

Without a doubt coronavirus has proved to be a testing time for the industry and airlines and operators have been stuck between the proverbial rock and a hard place, with a legal requirement to refund travellers for cancellations but a rapidly tightening cash flow, even if they use cards.

This has led to a spate of negative press regarding travel and it’s fair to say that in today’s media poor behaviour by one company can lead to a generalised attack on the whole travel industry.

ABTA and IATA have recognised the issues facing the sector and despite representations to government, customer confidence couldn’t have been helped by the transport secretary, Grant Shapps saying that he wouldn’t book an overseas holiday.

That having been said customer sentiment towards holiday bookings remains good with agents and operators reporting strong interest in travellers booking vacations for later in the year with their cards. With the gradual easing of lockdown and the proposed ‘air bridge’ methods it appears that the sector is beginning to see the green shoots of recovery.

In fact, in a recent survey, 61% of consumers said that the recent problems wouldn’t put them off booking a holiday and 68% said that they would have no concerns about booking straight away as long as they could avoid losing money.

It’s no surprise then that consumers are busy searching for ways to book their holidays that have inbuilt protection.

Section 75 – Saviour of the travel industry?

Section 75 of the UK Consumer Credit Act 1974 gives the consumer added protection when they buy goods or services that are in excess of £100.

Essentially, this act makes the card issuer jointly liable for provision of the service, in this case the holiday or flights, and means that consumers are able to obtain a refund should anything go wrong.

We have seen a massive increase in the use of contactless debit cards by travellers in everyday life as retailers look to avoid accepting cash.

This acceptance of cards on a very wide scale also leads to consumers feeling less resistance to using credit cards, especially on larger purchases.

Added to this the increased protection for credit cards offered by section 75 legislation means that the single biggest blocker to booking a holiday has now effectively been removed and promoting the use of credit cards as a method of paying is certainly a smart move for travel operators and of course consumers alike.

Offering a simple payment method

It has to be remembered that whilst most consumers are perfectly happy paying by credit card, for many consumers this is a still a relatively new way to pay that has been almost forced upon them in the last few months.

Agents and operators need to make sure that their clients can pay easily using their credit card.

Merchant service providers UTP Group has an excellent range of payment solutions, whether it be a desktop card machine for the bricks and mortar agency to fully integrated Virtual Payment Gateways for online companies.

With cashflow being ultra-important for all businesses at this time the good news is that their payment solutions can offer the potential to have the payment credited to the agent’s bank account on the same day.

The travel outlook is rosy

We’ve all had a really difficult time but it now looks like there is some light at the end of the tunnel.

With returning airlines and tour operators, overseas resorts starting to open up again and a clear uptick in consumer confidence, all of the elements are in place for a healthy return to work.

With consumers having been denied holidays and short breaks for the last few months, the arrival of summer and the fact that people simply want to see some signs of normality return it is distinctly likely that we will see a large amount of pent-up demand.

Smart agents and operators will make sure that they remove the final objection to booking by promoting the use of credit cards to pay.

With all that we’ve been through, great summer and autumn business would be very welcome indeed.