Travel spending is on a trajectory to reach an all-time high in 2024, making staffing for travel companies an even greater priority than ever. Outdated payment systems, however, have long posed significant challenges for travel and hospitality businesses, leading to slow payouts, delayed disbursements and reduced employee satisfaction and retention due to workers’ inability to access digital tips promptly. A recent survey revealed that 66% of travel firms believe their current payment systems negatively impact their profit margins, primarily because of difficulties in retaining top talent.
Implementing digital instant payment systems could go a long way toward mitigating these issues. For instance, nearly 80% of workers indicated they would choose to receive instant tip payouts if available, yet their current employers do not offer this option. This gap represents a sizable opportunity for travel and hospitality businesses.
The “Money Mobility Tracker®” explores how accelerating payouts and modernizing payment systems can help travel and hospitality firms maintain post-pandemic momentum and boost employee satisfaction.
The travel and hospitality industries are facing a slow-boiling crisis due to their continued reliance on legacy payment systems such as paper checks. This resistance to change and failure to meet the growing demand for digital payments have resulted in lost profits, employee dissatisfaction and a range of other issues.
According to a newly published study, two-thirds of travel companies reported that their current payment systems have weakened their profitability due to various factors. Seventy percent of travel executives said they spend significant time reconciling payment information across different countries and markets, which results in increased overtime payroll expenses for accounting departments. Other factors impacting margins include multicurrency settlements and fraud risk, both of which create bottlenecks in payment processes, preventing timely payroll and disbursements.
To learn more, visit the Tracker’s Challenges of Legacy Payments section.
One of the most critical issues facing the travel and hospitality sectors is staffing, with hotels, restaurants and food services facing annual turnover rates of up to 105%. Offering instant payroll could help attract new employees and retain existing staff.
A recent study reveals that 79% of hospitality workers would choose to receive tips through instant channels if given the option. However, despite this demand, just 31% of workers received their tips in real time at least once. Among workers with access to instant payouts, a majority said they were highly satisfied with this payment method. The fact that such a small share of hospitality workers receive instant payouts suggests that employers either do not understand the potential of instant payment systems or believe these technologies are too complex to implement.
To learn more, visit the Tracker’s Worker Satisfaction With Instant Payroll section.
Travel and hospitality firms worldwide are increasing their investments in payment upgrades, including adopting new instant payment technologies, to improve logistics for their employees. A recent survey found that overall spending on travel payment improvements is projected to rise through 2024. These investments encompass a range of initiatives. For example, one-third of travel payment companies plan to implement payment orchestration in the next 12 months. This could greatly accelerate internal payments logistics by preventing incomplete or delayed payments.
To learn more, visit the Travel and Hospitality Payment Upgrades section.
The “Money Mobility Tracker®,” a collaboration with Ingo Payments, explores how accelerating payouts and modernizing payment systems can help travel and hospitality firms maintain post-pandemic momentum and boost employee satisfaction.