Historically – and ironically – known as ‘Sunshine Saturday’ in the UK, the first Saturday of the new year has been the peak booking day for the travel industry. As the sector rebounds towards pre-pandemic levels, could 2025 see the sort of numbers posted by travel Group Tui in 2018, where 30,000 UK customers signed up for a trip on 6th January alone?1
The travel sector is rallying post-Covid 19. In 2023, Phocuswright data shows the U.K. travel market saw gross bookings increase by 19%, driven by robust expansion in online bookings, mobile transactions and key sectors like airlines and car rentals.2
Seen in this context, the New Year travel period is more than just a seasonal spike – it's a critical revenue opportunity that can make or break a travel business's financial performance after a series of fallow years.
However, beneath this promising landscape lies a significant challenge. A staggering 99% of travel firms see payment friction as a major operational concern3, potentially turning this golden opportunity into a nightmare of lost revenue and frustrated customers.
In this blog, we’ll be looking at:
- The hidden costs of inadequate payment infrastructure
- Transforming challenges into opportunities
- How Modulr is built for Travel's unique challenges
The hidden costs of inadequate payment infrastructure
The travel industry operates on razor-thin margins, where every transaction counts. During peak periods like the New Year, the strain on payment systems becomes particularly acute, and with traditional payment infrastructures often a patchwork of outdated systems, multiple vendors and manual processes, that can create significant bottlenecks.
Imagine a scenario where an online travel agent is processing thousands of bookings per hour. Each delayed transaction, manual reconciliation, or failed payment represents not just a lost opportunity, but a potential customer permanently turned away. The cost goes beyond the immediate transaction – it impacts customer loyalty, operational efficiency and ultimately, the bottom line.
Operational challenges during high-volume periods include:
- Complex supplier payment networks that require multiple integration points
- Manual reconciliation processes that consume valuable staff time
- Increased risk of payment failures during peak booking periods
- Difficulty in managing multi-currency transactions for global travel services
Fortunately, there is a better way to do things.
Transforming challenges into opportunities
This is where embedded payment solutions like Modulr can make a difference. By reimagining payment infrastructure, travel businesses can transform these challenges into competitive advantages.
A single API integration can eliminate the need for multiple vendors, dramatically reducing operational complexity and maximising margins. Real-time payment capabilities through modern payment networks such as Faster Payments and SEPA Instant ensure that transactions are processed quickly, reducing friction at the critical moment of checkout as well as ensuring settlement on time. Virtual cards with advanced authorisation controls add layers of security and transparency that modern travellers expect and provide extra reassurance to support a completed purchase.
For Online Travel Agents (OTAs), the ability to process payments seamlessly across multiple suppliers and currencies becomes a critical differentiator. Fixed interchange rates with card networks such as Visa and Mastercard allow for precise cost control, while automated reconciliation processes ensure accurate financial tracking during the busiest periods.
Airlines can benefit from real-time payment solutions that reduce the risk of failed bookings and provide customers with instant confirmation. The ability to handle high-volume transactions without downtime becomes a significant operational advantage.
Intermediaries managing complex global supply chains can leverage multi-currency transaction support, ensuring smooth operations across different markets and reducing the administrative burden of international payments.
Maximise margins by reducing inefficiencies
- Single API integration eliminates the need for multiple vendors, dramatically reducing operational complexity
- A range of interchange rates with Visa and Mastercard allow virtual card users to optimise their margin while maximising acceptance and supplier relationships
- Automated reconciliation processes ensure accurate financial tracking during the busiest periods
Relevant for: OTAs, hotel chains, and intermediaries managing complex supplier networks
Choice of payment mechanisms through one product
- Real-time payment capabilities in UK and across EUR zone through Faster Payments and SEPA Instant ensure quick and efficient transactions
- International payments via SWIFT across 180+ destination countries
- Virtual cards in 11 currencies with advanced authorisation controls add layers of security and transparency
Streamline reconciliation for high-volume bookings
- Automated reconciliation processes reduce manual workloads
- Customizable notifications and detailed reporting provide real-time oversight of payment flows
- Multi-currency transaction support ensures smooth operations across different markets
Relevant for: OTAs, bed banks, tour operators, and businesses managing global supply chains
How Modulr is built for Travel's unique challenges
Modulr's payment infrastructure is specifically designed to address the unique challenges of the low-margin, highly fragmented travel industry scale efficiently, reduce costs and deliver exceptional customer experiences. With 99.99% uptime, the platform is built to handle massive transaction volumes without compromising performance. As a fully regulated Electronic Money Institution in the UK and Europe, it provides the compliance and security that modern travel businesses require.
Key features include:
- Unlimited virtual card creation for secure and controlled supplier payments and on-site staff expenses
- Account-to-account transfer support for seamless disbursements and supplier payments
- Multi-currency transaction support
- Automated reconciliation and reporting
- Advanced security controls
Preparing for New Year success
The New Year travel period represents more than just a seasonal spike. It's a strategic opportunity to differentiate, optimise, and grow. As the surge approaches, travel businesses should conduct a comprehensive review of their payment infrastructure. This means evaluating current payment systems for security, scalability and efficiency, exploring automation opportunities to reduce manual processes and implementing solutions that provide real-time transaction visibility.
Ready to revolutionise your travel business payments? Discover how Modulr can transform your New Year strategy.
- Tui Group, Sunshine Saturdays, 2018
- Phocuswright, U.K. Travel Market Report 2023-2027, 2023
- Modulr, 2024