Global reach and local checkout: How online travel agencies are delighting customers

Online travel has rocketed in the past decade, despite – or perhaps because of – the pandemic fallout. Once relying solely on brick-and-mortar agencies, around 70% of travellers worldwide book trips online now, according to the latest Statista data. 

Rise of the Merchant Model: Bringing payments-on-platform

Perhaps connected, OTAs have begun adopting the merchant model in the last decade. Unlike the conventional agency model which sees OTAs act as intermediaries and out of the fund flows, merchant model OTAs take direct ownership of travel inventory (hotels, flights etc) and directly bill the customer. It means OTAs are now bringing payments on platform which adds increasing complexity for managing cross-border payments and treasury. 

On the logistical side, the burden of planning complex, multi-destination itineraries in person has lifted thanks to smooth digital booking platforms. Yet, while consumers flock to online channels, many online travel agencies (OTAs) need help to match this seamless experience behind the scenes, beyond the customer checkout. For example, paying international hotel and tour suppliers across various currencies poses real financial and operational headaches.

The good news is that while reaching global travellers poses challenges today, rapid payment innovation is removing international friction. Specialist solutions – such as those offered by Airwallex – enable OTAs to optimise and scale globally by consolidating complex systems, unlocking worldwide demand, and delighting customers wherever they roam.

Cross-border turbulence 

Reaching a new customer base across borders promises immense rewards for OTAs, but uncontrolled expansion poses operational and reputational risks. The key is developing seamless global infrastructure across both front and back-end systems.

At Airwallex, we understand there are various pain points for OTAs seeking to launch into new markets, as well as more established OTAs who might be looking to improve operations intra-markets. Some of the pain points are highlighted below.

Localising checkout experiences falter

Presenting unfamiliar languages or payment methods during booking drives away customers, which is a massive problem as consumer trust is vital for sales and repeat business. Consider that SaleCycle found the average cart abandonment rate for online travel sites was 86% in 2022 – markedly higher than the overall eComm average of 80%. But manually tailoring flows for 200+ countries burdens internal teams.

High cross-border costs erode margins

From card processing to foreign exchange to wire transfer charges – cross-border payments incur significant costs. High-value booking risk also prompts elevated payment reserves, locking up working capital.

Paying staff and suppliers is complicated

Without the help of a trusted payment partner, such as Airwallex, OTAs must open overseas accounts, add foreign exchange (FX) fees, and reconcile across disconnected financial systems to transact overseas. Just staffing finance teams across time zones and geographies strains resources.

Global cash flow monitoring suffers

As operations span more countries, gaining a unified view of finances across business units proves difficult. An inability to reconcile data due to fragmented solutions impacts forecasting and cash-flow management.

Increasing regulations require expertise

Expanding into new countries also means adjusting operations to navigate local regulations, tax codes, and compliance standards. Few OTAs possess this specialised global governance experience in-house.

Flying high with an expert co-pilot

Thankfully, Airwallex is purpose-built to help OTAs scale on the global stage effortlessly, acting as a trusted co-pilot. The platform we have developed, having listened to and learned from OTA customers, centralises and simplifies financial infrastructure. OTAs can grow internationally without friction by standardising global financial flows on Airwallex. Here is how we can help.

Global payment acceptance

Allow your customers to pay in their trusted and preferred payment method. Airwallex can collect bookings from 160+ international payment methods in 180 countries. You'll be able to settle like-for-like in 12+ currencies so you can repurpose funds to pay suppliers in those currencies. Check out the full list of Airwallex payment methods.

Multi-currency virtual accounts

Consolidate funds worldwide with unique virtual IBANs per currency to simplify reconciliation. Domestic and foreign currency accounts can be opened in minutes on Airwallex, making to quick and easy to receive funds from multiple countries and regions – often via local rails.

Low-cost global transfers

Rapidly pay hotel and tour suppliers overseas with minimal FX fees using local clearing capabilities. Over 90% of Airwallex payouts are routed through local payment networks in 110+ countries.

Automated reconciliation

Unify transaction data from customer booking through to supplier payment, onto a single real-time ledger view through APIs. 

Local compliance expertise

We have built local licences and connections with local banking partners for smooth and robust operations.

Unique service offering

We take a customer-first approach, talk with tourist boards, and keenly monitor travel and eComm trends. OTA customers have access to customer support to maximise the global opportunity at speed.

Global success with Airwallex

Several leading OTAs have expanded internationally by leveraging Airwallex’s consolidated global payments platform, including Authentic Vacations and Plum Guide.

Authentic Vacations is a fast-growing US travel agency that creates custom packages tailored to each traveller’s interests. As Authentic Vacations arranged more overseas tours, paying hotels and guides posed problems around high credit card fees on foreign transactions and multi-day delays in sending USD transfers internationally. 

Authentic Vacations gained $10,000+ in monthly savings on FX and card fees along with hours-fast overseas supplier payments versus the previous multi-day delays through their bank. 

“Because of Airwallex, we’re enjoying significant cost savings and a more streamlined management of funds between different currencies, which is essential for our travel agency,” says Authentic Vacations’ CEO, Simon Russell.

Meanwhile, Plum Guide lists over 30,000 extraordinary vacation rentals worldwide. Managing finances across 500+ global regions grew complicated for Plum Guide as it used multiple banks and FX providers. 

By centralising global treasury flows on Airwallex, Plum Guide realised faster, lower-cost FX and cross-border transfers, consolidated financial reporting across all locations, and scalable systems supporting expansion into 60+ new countries. “Airwallex has elevated our financial operations to new heights, empowering us to seamlessly complete FX transactions and deliver exceptional services to our valued guests and hosts,” explains Jonny Tamir, the company’s CFO.

Delighting customers – at the checkout

Streamlining back-office payments and treasury tackles one side of international expansion for OTAs. Equally important is creating customer-facing checkout and booking flows tailored for worldwide travellers. By reducing international checkout friction, OTAs can unlock immense growth.

Airwallex enables OTAs to build a globally optimised booking journey with embedded capabilities by offering 160+ international payment methods, allowing customers worldwide to pay with familiar local options – from cards to popular country-specific e-wallets. 

We also help customers with hosted checkouts in multiple currencies, and compliant payment flows to match customer locations. 

Further, once initial KYC and KYB checks are complete, Airwallex can instantly onboard and verify new users. Further, we are using generative AI to improve customer onboarding, which helps customers get up and running faster. This speed to integration is Airwallex’s differentiator.

Showcasing global service in small but meaningful ways also bolsters trust and loyalty. Having the ability to repurpose currency by paying suppliers using Airwallex’s multi-currency cards is a game-changer. This convenience during travel delights guests and secures direct engagement.

Charting the future of travel

Rapid payment advancements will further globalise online travel in the years ahead by removing remaining geographic barriers. At Airwallex, we make an effort to be where the customers are. And with more booking transactions expected on mobile phones, integration with digital wallets such as Apple Pay, for instance, means we are well placed to serve our customers.

We also predict that there will be more specialisation for the travel vertical. Future payment solutions will cultivate more tailored capabilities for travel needs – advanced fraud tools, multi-tier reconciliation, and more.

And the consolidation of siloed financial data worldwide into a unified layer will transform OTAs. By synthesising global operational data, OTAs gain visibility to optimise decisions across every business entity.

Leading platforms will move beyond payments to directly embed specialised travel capabilities like automated inventory management, trip bundling, loyalty programmes, and more – enabling simplified experiences end-to-end.

OTAs, armed with new-found data, should also take advantage of embedded finance – as explored in this article. Embedded finance allows Airwallex clients to embed our accounts, payments and cards into their own tech stacks and build imaginative solutions for their customers.

Tim, from the Embedded Finance team at Airwallex interviewed for the piece above, explains: “There’s a big embedded finance opportunity for OTAs … As soon as you book a ticket/hotel, the OTA or airline knows that, at a certain time, you’re going to go to X country. If that country uses a different currency from where you live, they’re uniquely positioned to offer an add-on, a card loaded with that currency at preferential rates.”

He continues: “Tracking the subsequent spend would not only provide a monetisation opportunity for the travel company, but would give them unparalleled insight into the spending behaviours of their travellers, giving them a great opportunity to accurately upsell and cross-sell on their next holiday, or recommend suitable restaurants/bars, tourist attractions et cetera. It’s a value add for all involved.”

Ultimately, the opportunity to provide seamless global customer journeys has never been more significant for online travel agencies. By leveraging cutting-edge payment platforms, like Airwallex, OTAs can scale rapidly across borders – unlocking record growth en route.