How the Travel industry is bouncing back from zero bookings

In this post, we will look at how leaders from Nordic online travel agencies (OTA) have adapted and plan their journey back to growth, the payment trends that have emerged from the pandemic, and what to expect of bookings during the coming year.

We were thrilled to hear from a range of experts from the Travel industry. Our guests were Andreas Elmgren, COO of online travel agency Sembo. Part of the Stena Line Travel Group and with offices in Sweden, Denmark and Spain, Sembo is building a revolutionary new product they believe will change how we travel. We also heard from Per Mohseni, CEO of travel technology group RCG. He manages the overall operations and resources of the company, which sells flight tickets, hotels, rental cars, and other ground arrangements online as well as offline.

Business unusual during the pandemic

In early 2020, the Travel industry was forced to face an uncertain reality. With lockdowns imminent and social distancing becoming the new norm, regulators placed unprecedented restrictions on international travel. It was then that many understood that this crisis situation would not disappear in a week or two. Organisation needed to adapt to a long-term action plan for a year or more.

“2020 started off as a brilliant year for us,” says Andreas. “We thought it was gonna be a record year, and business was good. But then, from one day to another, we had zero bookings. Not only that, we had cancellations – almost everything we had booked over the previous five or six months were gone. The pressure this placed on customer service, who had to work 24/7 to handle customer questions, refunds, and rebooking, was really challenging. On an operational level, everyone was working remotely from home all of a sudden, which was a new thing that we have to adapt to.”

The solution was to take several steps back and try to rethink operations. For Per, this involved a three-step plan. “First, we communicated to our customers via all our digital channels to show them that we have an action plan, and that everybody will get assistance in a timely manner. This decreased the number of unnecessary calls, and customers affected by cancellations could get in touch with us. The second step was to establish a team within the company to look after our own staff, because they were also affected by the pandemic and we needed to motivate them to see a future. Without them on board, we couldn't really handle this. The third step we initiated was to reorganise our organisation.” 

Crisis situations are, of course, nothing new for the Travel industry. The hotel and tourism sectors suffered from the combined effects of a general economic downturn that began to show itself early in 2001 and the shock wave from the events on September 11th of the same year. More recent events, such as terrorist activity in Bali or the hostage crisis in Russia, have contributed to an increased feeling of insecurity.

“The pandemic has been extremely challenging,” says Per. “But challenging times create new opportunities for teamwork within a company. New structures are built up suddenly, which we would have never thought possible. We have learned a lot about adapting very quickly to the situation, which is very important, and not following standard routines.”

Building back better

Midway through the pandemic, Trustly conducted a survey of 450 merchants in the Travel industry in a bid to identify how their challenges and priorities were changing as they navigated the changes caused by COVID-19. One subject on the mind of the merchant is that of challenges with their current payment mix. OTAs clearly want more control over their payments and their refunds.

“We had already identified prior to the pandemic that the payment space is very important,” says Andreas. “We established a team to work with payment solutions to reduce the costs and the challenges associated with processing payments – I’m talking about chargebacks and other things involved in the payments ecosystem. Trustly has become an increasingly important partner to Sembo and other OTAs over the past few years and I believe that the accessibility which Trustly has enabled the eCommerce side to give to the customer is really good as Trustly covers so many banks as a payment option. And this is an area where really there is no comparison with old solutions, where you only  had a couple of major banks in each country that customers could choose from, so, it's certainly much better for us now.”

“I can only agree with Per,” says Andreas.” I think what is really important for us is to offer the payment options that our customers want to use. Trustly is a good example as our customers can use their local banks. Efficiency is very important for us and having an efficient way of handling payments has been even more important during the pandemic. Lastly, chargebacks were a real nightmare for us, so having Trustly eliminate this problem is very cost efficient.”

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