The travel experience is changing for consumers - here’s how
As the summer season approaches there are, finally, green shoots for the global air travel industry decimated by the pandemic, with Central and Eastern Europe, Middle East and Africa (CEMEA) and specifically Russia leading a tentative recovery. In the year to April, over half (57%) of the 2.7 million Visa cardholder visits to global airport lounges (via Priority Pass and LoungeKey, owned and operated by Collinson) were made by Russian travellers, with most constituting domestic visits1.
Globally, pent up demand for travel is building. Some 63% of European consumers plan to increase spending on travel as the pandemic subsides and restrictions are lifted, according to McKinsey & Company.2 As this demand builds, banks, travel and payments providers are innovating to offset the lingering complications of travel.
A bigger appetite for mobile
Throughout the pandemic consumers have sought out digital, often mobile first solutions to solve problems introduced by restrictions on movement. Consumers “now want to look for discounts, for benefits, for privileges again but via their mobile devices,” says George Denisenko, Head of Consumer Products & Loyalty at Visa CEMEA. “Everything is shifting to digital fulfilment, including travel, so consumers are looking for solutions that will allow them to consume multiple offers through convenient channels.”
Travel propositions on the rise
In response, banks are launching more travel propositions and bundles to meet consumer demand for shopping using mobile devices. They are finding that improved online concierge services and the bundling of purchases, from tickets to hotels, hire cars and even telemedicine services, are increasingly compelling consumer propositions.
Concierge services are a key part of the picture, enabling consumers to book a plethora of services with maximum convenience. Demand is building. Travel accounted for more than 30% of concierge requests until the onset of the pandemic, when that figure fell to 7%. According to the CEMEA Monthly Concierge Report, as of April 2021, travel had recovered to account for 16% of all requests.
Partnerships powering new experiences
In a landscape of evolving travel propositions, it can be difficult for consumers to find the right offers for their individual needs. Partnerships have enabled companies to bundle services in order to improve the travel experience for customers, target customers more effectively and ultimately build market share. George adds “it can be complicated for consumers to figure out which vendor does what, plus it can be a struggle to find relevant offers and propositions. Visa is ideally placed to connect different players from the industry to offer a better travel experience.”
There are many examples of partnerships in action. Visa Privileges Mobile App (powered by Visa partner DragonPass) provides its consumers with a Russia focused “travel companion” benefits package. It includes discounts for airport transfers, airport dining and international roaming, and CEMEA wide travel hotel and car rental benefits.
Visa and hotels group Accor have partnered to offer significantly discounted stays for Visa cardholders who are also Accor Live Limitless members until April 2022. A similar agreement allows Visa cardholders to save up to 25% off hire cars with Avis.
Following growth in demand for telemedicine, since March 2021, holders of various premium Visa cards (Visa Infinite, Visa Signature, Visa Platinum) issued by Ukrainian banks, have been able to take advantage of a telemedicine services package from Visa and ARX insurance company, including access to specialist doctors, medical concierge support and PCR testing for international travel. “Together, these services can offer a radically different experience for consumers in the CEMEA region,” according to Denisenko.
The waiting game
There is a long way back to normality for inbound travel, though its clear progress tackling the virus will have a significant impact. China was the first to suffer an outbreak but has been among the earliest to return to something that resembles normality. Inbound travel to Shenzhen had returned to 74% of Q1 2020 levels during the first quarter of this year, compared to 21% in Moscow and 25% in Dubai.3
The International Air Transport Association (IATA) expects passenger numbers to return to 2019 levels by 2023, though much will depend on the roll out of the vaccines and the oscillating rules introduced to combat variants of the virus.
“The challenge everyone’s facing are the varying levels of vaccination across the countries, influencing the virus cases dynamics and ultimately shaping the resulting restrictions and the travel demand,” says Denisenko. “That uncertainty makes it a waiting game for many of us who are otherwise ready to go out and rediscover the world as we knew it.”
1 Visa Weekly Lounge Visits - Trend Report, Collinson
2 European consumer sentiment during the coronavirus crisis, McKinsey, March 2021: https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/survey-european-consumer-sentiment-during-the-coronavirus-crisis
3 Visa International Travel Database, Visa Business and Economic Insights
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