24% of Travel, Tourism CFOs Say Slow Payment Is a Top Challenge

Most large companies in the travel and tourism sectors are unhappy with their approaches to payments management, PYMNTS research has found.

The majority of the financial leaders in these sectors rate their firms’ payments operations as only “somewhat” effective, and one in 10 say their systems are ineffective. Just a quarter say they’re satisfied with their current approaches, according to the “Smart Receivables Playbook,” a PYMNTS and Flywire collaboration.

Get the report: Smart Receivables Playbook

Travel companies are reevaluating longstanding accounts receivable (AR) frictions and addressing new challenges in the ever-evolving payments space even as they come back from the unprecedented obstacles they faced during the height of the pandemic.

Read more: Flywire Q4 Total Payments Volume Up 75% on Education, Healthcare, Travel Sector Growth

Identifying the Pain Points

PYMNTS’ research identified five top AR pain points facing businesses in the travel and tourism sectors. Topping the list is an insufficient ability to handle payment questions from customers, with 32% of financial executives citing this as a pain point.

These executives also say that it’s too complicated to manage multiple vendor relationships (a pain point cited by 26%), that it takes too long to get new features into the market (24%), that it takes too long to receive payments (24%) and that it’s difficult to obtain real-time access to sales and transaction data (23%).

Answering questions, managing vendors and introducing new features require significant labor and time to address, highlighting the value of effective payments systems that streamline related processes.

The process to accept international payments was ranked sixth among the pain points, but it was the one that financial executives in the travel and tourism sectors most often cited as a top challenge — as opposed to being just one among several. While 22% said international payment processes were a pain point, 16% said they were their No. 1 pain point.

Streamlining the Inefficiencies

Financial executives surveyed said the key to streamlining will be investment in digital innovations that break down cross-border barriers, lower costs and build future-proof payment operations.

One executive PYMNTS interviewed cited tapping third-party aggregators as a solution. It is often easier for hotels and other lodging companies to manage payments and collections when they originate from the same source rather than from countless individual travelers.

Third-party digital aggregators can also help reduce the credit risks that businesses in the accommodations industry assume when booking customers and have proven especially helpful when it comes to collections.

Another executive cited implementing an integrated payments solution from Flywire as a strategy. The solution lets customers like tour operators and travel agencies book and pay entirely online rather than spending time on the phone trying to work through bank and routing information.

With solutions like these, financial executives in the travel and tourism space can pursue a different approach to their longstanding AR frictions.