In this blog series, The Effects of COVID-19 on the Travel Industry, we take a closer look at five major sectors of the travel industry and explore current trends and impacts of the COVID-19 pandemic.

This series covers the effects of COVID-19 on the following:

After more than a decade of explosive growth and the emergence of many innovative startups, the travel industry faces one of the biggest challenges in its history. The global COVID-19 pandemic has devastated economies worldwide, hitting hospitality businesses, airlines, and transportation services particularly hard. Studies suggest the impact will be 9 times worse that 9/11.

The travel business sector is suffering a considerable decline, as companies have been forced to handle meetings through video conferencing. Many may choose to continue with remote communications and eliminate their business travel budgets. To adapt to the new normal,  companies are evaluating existing protocols, such as:

  • Traveler safety
  • Duty of care for employees
  • Policy compliance
  • Eliminating bypass and pre-trip approval

Global Payment Systems Trends

Real-time payment systems will disrupt card-based payments within specific regions by offering cheaper, faster payments. Mobile payments continue to lag behind in the developed world, although they are strongly growing.

The pandemic has increased the demand of mobile solutions to digitalize and automate payment.

Technology

Future of payments is pushing towards a cashless society and frictionless exchanges made possible by machine learning and even cryptocurrency. We also see an increased demand in using virtual payments working in tandem with a push for NDC-adoption.

Pandemic Impact

About 38% of consumers now see contactless as a basic feature of payments, up from 30% just a year ago. As we’ve seen above, the COVID-19 pandemic has accelerated existing trends in the industry such as shift to e-commerce, digitized or touchless payments and instant payment solutions as a means to reduce virus spread.   Global payment transactions made through cash has declined by 68% from 2019 in both mature and emerging markets.

Global Expense Management Trends

Technology

Corporate expense management is becoming increasingly easier through cloud-based mobile apps with smart optical character recognition (OCR), that can instantly convert a paper receipt to a digital file and send it to accounting. This is part of a general trend of companies switching to digitized expense management with affordable pricing models.

Expense management systems are becoming holistic, with seamless integrations with human resource management tools, enterprise resource planning, accounting software, etc.

The use of travel and expense management software is also becoming increasingly popular, with automated policy checks eliminating manual processes and, therefore, human errors.

 

Pandemic Impact

COVID-19 has accelerated efforts towards a cashless society. In a recent survey conducted, digitizing paper or manual invoice and expense processes is the top initiative taken from the pandemic.  The integration between expense management and travel booking tools is been prioritized.  This includes the virtual card issuers continuing to develop points of integration for payments and booking with expense management solutions. In addition, real time approval and visibility transaction data into expense management systems is being integrated as part of duty of care.

With the lockdowns and many companies requiring employees to work from home, we are seeing more employee initiated spend for purchases such as office supplies, internet upgrades, reimbursable meals etc.

TCG Consulting can help your company create an expense program that provides both transparency and efficiency. Click here to learn more.

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