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The online travel industry generated $667.55 billion in revenue in 2023, and this is predicted to grow by nearly 13% over the next seven years, reports TravelPerk1.
Travel booking platforms can increase revenue and generate greater customer loyalty by paying attention to emerging consumer travel trends. This includes embracing digital transformation and omnichannel payment options like PayPal’s Pay Later.
It’s crucial for brands to enrich travel experiences across the customer journey. In 2024, consumers want sustainable options, easy online booking, and the ability to spread the cost of their next trip.
70-74% of travelers want booking platforms to help them make sustainable choices, including hotels with green credentials and cleaner modes of transport2' 6. 49% want incentives to go green – these customers say reward points and discounts would make them more likely to choose sustainable travel options2.
The period between booking and traveling is trending longer, as many customers choose to spread the cost of their vacation over 12, 18, or even 24 months3. The number of shoppers choosing travel now, pay later payment options has reportedly grown by 50% in the last year alone, according to UnivDatos Market Insights4.
Shorter trips have also become more attractive to customers on a budget – 31% of people surveyed shortened a planned vacation to cut costs, while 27% decided to stay closer to home instead1.
As revealed by CondorFerris, consumer travel trends show that 60% of millennials are prioritizing experiences and unique activities in their travel plans – they place high value on personalized services and travel companies with specialist knowledge6. This includes travel for health and wellness, once-in-a-lifetime destinations, and trips to watch global sporting events9.
80% of consumers want to book their trips entirely online1, and while mobile applications are an important booking and research tool for many, 80% of Americans want to book exclusively on desktop6. This can take place after weeks, or even months, of online research and price comparison across 38 sites on average6. American consumers are spending 29% longer on travel research compared to 2019-20206.
Expedia Group has seen over 250k new users transacting with PayPal by increasing the visibility of this payment option7.
According to Statista, 66% of Gen Z adults and 64% of Millennials are willing to pay an extra fee for flexible cancellation when making a hotel booking14.
Booking abandonment is high in the travel sector – in one survey, 91% of those buying on a mobile device abandoned their purchase1. Implementing flexible cancellation and refund policies could engage more online customers and encourage bookings.
Prioritizing digital-first experiences can help meet the expectations of today’s travelers. 74% of online booking platforms and 86% of travel agents are streamlining the travel booking process by introducing digital-first solutions6.
Consumers want friction-free mobile checkouts where they can make travel financing plans on their own terms. This includes mobile applications, self-service check-in functionality, cashless transactions, price alert notifications, quick reservation pages, and flexible refunds6. As the majority of consumers still prefer to make their bookings on desktop according to recent research, travel payment solutions need to be streamlined across all screens6.
Buy Now Pay Later (BNPL) options can give consumers more control over their spending. During a global cost of living crisis, it’s even more important for consumers to be able to break up large payments for greater affordability.
Offering a BNPL travel booking option can help reduce cart abandonment, which is much more likely in the travel sector compared to other retail sectors9. Millennials and Gen Z are also predicted to become the biggest spenders on travel from 2025, in part because they value ‘bleisure’ - travel which blends business and leisure3'9.
Vueling saw a 210% increase in sales made through PayPal Pay in 3 and an 8% increase in ATV on Pay in 3 purchases from Q1 2022 to Q1 202310.
Popular touchless travel solutions include omnichannel digital services such as mobile check-in, virtual concierge services, and WiFi enabled flights. 84% of airlines and 89% of airports are implementing an entirely touch-free check-in process,11 which is building customer confidence and allowing travel companies to deliver a frictionless experience from booking to the beach.
Consumers also want to choose their payment method when booking travel arrangements. This includes mobile payments like Apple Pay, and BNPL solutions, the latter of which 75% of travelers are likely to use to pay for future vacations, the WTTC reports12. Engagement with BNPL is now overtaking credit card use in the travel industry – this has been attributed to increasing airfares and higher numbers of millennial and Gen Z travelers9.
Consumer travel preferences are shifting towards flexible booking, points-based loyalty programs, and extra travel benefits. For 29% of travel bookers, this means making direct bookings instead of searching third parties6. These consumers are seeking exclusive perks, the best prices, and loyalty program benefits6.
As consumers demand more flexibility, financial protection, and transparent information, it’s essential for enterprise travel businesses to meet their needs. PayPal can help travel enterprises transform, stay competitive, and delight today’s travelers.
The idea of a VR travel experience sounds like an oxymoron, but McKinsey and Company states metaverse tourism could present a $20 billion opportunity to the travel industry by 203013.
90% of consumers want personalized experiences from virtual travel assistants6, and to conduct more detailed, immersive research before booking, such as previewing first-class flight cabins, checking hotel amenities, and even touring world-famous landmarks 13. Augmented reality has already been used to create immersive exhibitions and improve hospitality training, and it’s even been digitizing the airline compensation process.
Enterprises throughout the travel industry are adopting flexible, consumer-centric approaches and innovative digital solutions to stay competitive and satisfy modern travelers. Travel industry professionals and stakeholders could experience significant benefits from integrating flexible payment options such as PayPal’s Pay Later, including enhanced customer satisfaction and revenue growth.
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