A new study by airline technology provider Worldpay shed light on the future of airline distribution. The study paints the picture that airlines' focus will increasingly shift towards mobile and social media as major distribution channels. Over eight in 10 companies in the sector believe that implementing new payment solutions represents a major business priority. The study quotes ‘gaining competitive advantages’ as one of the main reasons for this shift towards innovation in payment solution (Travolution). Airlines aim to extend existing mobile services over the next two years to offer ancillary purchases, such as seat upgrades, booking management, onward travel and inflight sales via mobile phones.
AIRLINES AS LEADING INNOVATORS IN TOURISM
Airlines have long been considered as being the leader of technology innovation and adaptation in the travel and tourism industry. In this regard it is no surprise that airlines focus now heavily on mobile as both a distribution channel and a means of payment. In total 71% of the survey’s respondents the future of airline payments lie in mobile. However, the question remains wether these findings are not too overly optimistic.
THE CHALLENGES ARE NON-TECHNICAL
Although a general shift towards mobile in travel can be observed, and the advantages for the service providers are clear (improvement of internal processes, such as data handling and submission); adoption rates, especially for payment and booking solutions, remain low. On the one hand, this is due to the different browsing experiences on mobile devices. On the other hand, consumer lack trust in mobile as a secure payment channel. Thus, airline in particular, but also tourism businesses in general, will face the challenge of gaining consumers’ trust and confidence, when implementing mobile payment solutions.
While many airlines already have very active presences on social media channels, in particular Facebook an Twitter, they are planning to increase the usage. In total 40% plan to be active on Google+ this year. Social media is now also seen as a high potential sales channel, with nearly a third of airlines planning to enable sales via social media in the next 12 months. This development gives an insight into where the travel industry will be moving over the next few years in general, as airlines are ahed of other travel sectors in terms of technology adoption.
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