The post-COVID19 scenario for the travel industry shows bookings are plummeting to almost nil, with increasingly lower margins, and a marked increase in risk, moving insurers to reduce the availability of credit for the sector. Trust between players who have traditionally collaborated has been badly hurt, and the rules of the game are changing.
In the face of this environment, the Open Payment Alliance (OPA) —the new B2B payment standard for the travel industry, led by HEDNA and HTNG with the collaboration of the Voxel Group— is more necessary than ever to help rebuild trust between OTAs, bedbanks and hotels. In addition to generating efficiencies by automating B2B payment processes and allowing a greater variety of payment methods, this new standard will also allow payment terms to be agreed between the parties, minimizing risk and making it unnecessary for insurers to participate in the process.
It is in this context that Voxel Group has now presented the first real applications under the new B2B payment standard, the technical specifications for which were released this week by HTNG, the association leading technological innovation in the industry. In the latest edition of the #baVelDigitalSummit, Voxel brought together representatives of Mastercard, Melià Hotels International, Logitravel, Apaleo, Xanderpay and Ingenico to present the benefits of the new solution for all the stakeholders involved.
During the talk, 75% of the industry players in attendance believed that the reduction of credit insurance caused by Covid-19 will seriously impact their business in the coming months.
As the president of Voxel Xavier Ginesta said, “although the OPA’s baseline was to correct the inefficiencies in the travel industry’s B2B payment channel, we now realize that what is really important about this new standard is the capacity it has to generate trust among the different players in the travel sector, by providing traceability, automation and optimization of all the payment related processes.”
Bedbanks and hotels have so far borne most of the risk of the operations and in the new post-COVID19 scenario the trend will be for prepayment of operations, together with reasonable refund conditions up to a few days prior to check-in, said the Logitravel and Melià representatives. “We are changing and developing other ways to invoicing the customer“, assured Jesús Pons, CFO at Logitravel Group. On this line, Gaspar Llabrés, Credit & Insurance Senior Director at Meliá added that “the important matter now is in the collection“.
The Payment Manager, the OPA’s tool
For this model to work, a technological tool is required to guarantee the execution of the different terms as agreed—dates, conditions, methods of payment, etc.—and this tool is the Payment Manager, the equivalent of the channel manager in the reservations channel, and the centrepiece of the Open Payment Alliance.
More than 90% of the audience thought that using the Payment Manager as a trusted third party, in combination with pre-paid rates and proper refund policies, is the key to foster trust amongst trading partners and mitigate B2B payment risks
The OPA today
In the last two years, Voxel Group has led the proof of concept process and pilots with firms in the sector that have already validated the model, and after the announcement of the technical standards by HTNG, is now launching the Early Adopters program to accelerate the deployment of the OPA. To do this, Voxel has reached an agreement with Mastercard whereby the financial services multinational will sponsor the integration costs of the first companies to join the program and use B2B payments with virtual cards.
For Chiara Quaia, Vice President of Business Development of Travel Industries at Mastercard, “the simplest and most effective B2B payment method is to use existing virtual credit card products to manage the end-to-end process for all players involved in the ecosystem”.
Another essential player in the implementation of the new standard for B2B payments in the travel industry, the PMSs have received the Voxel Group’s proposal approvingly, as demonstrated by the representatives of the top ten international PMSs who attended the baVel Digital Summit dedicated to the OPA. “Because of the current situation, hotels need to streamline their processes and solve the inefficiencies at the hotels front desk“, highlighted Benjamin Schmidt, Co-founder of the PMS Apaleo.
The event had more than 150 live followers. If you missed it, you can watch the session again here: