The COVID-19 situation has affected many areas of the travel industry, and the way travel agents pay suppliers, such as airlines and hotels, is no exception. Payments from travel sellers to travel providers may need to evolve in order to support the recovery of the industry. The specifics on what changes to payments will be made and how they will be implemented will ultimately depend on the circumstances and set-up of each agency. In this blog, we’ll explore three ways travel agencies can facilitate payments to travel providers.

Minimize risk in supplier payments
The COVID-19 situation has increased the risk of suppliers defaulting on payments from all travel players, including airlines and hotels. For travel agencies making payments to airlines and hotels, this means the choice of payment method is particularly important as cards contain a level of protection that bank-to-bank and cheques do not. If a supplier is unable to provide the service, then the travel agency can obtain the funds relatively quickly through the card scheme.
Similarly, when travel agents pay airlines through industry standard settlement schemes, there is also risk on the airline side. Travel agents typically have an average of 16-days to settle with the airline through such schemes. However, in the event that, if a travel agent makes a booking and then, after 16 days, defaults on payment, it is the airline that is left out-of-pocket.