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

Increased safety precautions in transportation hubs, including airports, may lead to a drastic decline in leisure travel, even after the threat of COVID-19 has eased. Temperature checks, thermal imaging, and wearing face masks in public are already becoming a cultural norm. As countries begin to slowly open up travel, companies have started to formulate new a plan to place policies and controls to ensure their traveler’s safety and well-being.

Additionally, countries such as Turkey, Chile, Greece, Italy, and Spain are considering the requirement of health passports. Travelers to these countries would need to present a recent negative COVID-19 test result to gain entry.

As countries begin to slowly open up travel, companies have started to formulate their travel restart plan to place policies and controls to ensure their traveler’s safety and well-being. In a survey we conducted in May 2020, we found that at an average 20% completed a restart plan, 19% have not considered creating one and 61% are in various stages of conducting their assessment.

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 proliferation of consumer choice in terms of payment tools has resulted in a continuing trend of consolidation among payment processors.

Technology

New technologies such as AI and biometrics further push consumer convenience, while also promoting greater security for the industry.

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 also pushed us further into cashless payments as a means to reduce virus spread.

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. Historically, cards were designed to pay for travel and now have moved beyond to all employee-initiated spend (EIS). Linking historical travel management functions with expense, payment and meetings provides higher user acceptance, reduced cost, impacts to TCO, and a scalable solution that is now available across the globe.

Travel is now accelerating touchless payment functions. The World Health Organization (WHO) recommends using caution with paper money, and nearly 8 in 10 people are using forms of contactless payments, including tap-to-go credit cards and mobile wallets like Apple Pay, according to Mastercard Contactless Polling.

Tokenized mobile wallets like Apple Pay, Samsung Pay, and Google Pay have seen a surge in activity, due to consumer fears about touching card terminals or entering PINs. As a result of the changing payment behavior, financial institutions and retailers need increased security to manage potential fraud.

Similarly, global expense management systems have geared toward the use of mobile phones to make contactless payments. Expense management systems have seen an increased demand to integrate travel booking tools into their products. Post-pandemic duty of care protocols require expense management systems to provide real-time and visibility of transaction data.

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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