The state of travel supplier payments going into 2025
The next decade of the travel industry will be defined, among other things, by a rise in cross-border trips. In response to this trend, travel companies will be eager to scale to accommodate travellers from more markets. However, doing this comes with its fair share of challenges.
For example, handling more cross-border transactions opens travel companies up to issues related to payments around efficiency and risk. It’ll also disproportionately impact small to medium travel businesses, such as tour operators, already competing with established travel companies and grappling with significant technological changes.
In this article, we’ll explore the supplier payment challenges travel companies face and touch on some of the trends likely to improve the supplier payment process in 2025 and beyond.
Key supplier payment statistics to know
90% of travel executives are prioritising upgrades to payment and financial operations systems
66% of travel companies are seeing their profit margins impacted by outdated or complicated payment systems
38% of businesses say they receive most invoice payments outside of the payment terms specified
The average time to receive payments after the invoice due date is 40.3 days
75% of travel companies earn over one-quarter of their revenue from cross-border payments
88% of travel companies frequently make payments to suppliers in foreign currencies
Supplier payment challenges
Travel businesses face several challenges when it comes to paying their suppliers:
Cash flow
Travel companies tend to operate on relatively thin margins. As a result, they rely on timely payments from customers and suppliers. With almost 40% of businesses saying they receive most invoice payments outside their specified payment terms, late payments act as a big roadblock to healthy cash flow.
Payment reconciliation
With many travel services and packages involving multiple suppliers in a single trip, reconciling invoices and making payments is a time-consuming challenge. This is further complicated by many businesses experiencing significant payment delays, with the average time to receive payments after the invoice due date being 40.3 days.
Manual processes
Many SMEs still rely on manual payment processes, which are inefficient and error-prone due to the heavy reliance on manual data entry and reconciliation and, in some cases, paper-based invoicing. 56% of businesses still rely on paper-based processes for their accounts payable operations.
Cross-border payments
Cross-border payments present a significant challenge for travel providers due to fluctuating currency exchange rates, differing supplier payment preferences and transaction fees.
These challenges are significant hurdles for businesses of all sizes across the travel value chain. Fortunately, several key trends are emerging that promise to address these enduring supplier payment pain points.
2025 supplier payment trends
Digitisation continues to change supplier payments for the better. However, there is still some way to go to improve supplier payments in the travel space. Here are some key trends to look out for in 2025:
Cross-border payment innovation
More payment platforms are offering multi-currency accounts, making it easier for travel companies to make fast and affordable cross-border payments. Cross-border payments will become more streamlined as travel businesses of all sizes embrace multicurrency accounts to hold and manage their funds. This, in turn, will strengthen relationships with their suppliers, who value speed and flexibility when it comes to cross-border payments.
Payment automation
Travel providers are also increasingly interested in payment automation. Automated Clearing House (ACH) payments are becoming more common for recurring transactions, reducing the time spent manually managing payments.
Similarly, travel companies use payment automation tools to reconcile payments to reduce payment errors and save time.
Robust security measures
Travel businesses are acutely aware of the fraud risks associated with travel payments. As a result, they’re increasingly reliant on robust payment security measures, such as 3DS2, PCI DSS payment gateways, chargeback management systems and biometric authentication.
Additionally, implementing advanced fraud detection platforms and real-time transaction monitoring will only become more critical in proactively identifying and responding to potential threats.
Payment flexibility
Flexibility isn’t just a priority for consumers—suppliers also have payment preferences. To cater for a wide range of preferences, travel companies offering various payment options will be best placed for success with consumers and suppliers. This may include enabling real-time, local or mobile wallet payments.
This flexibility not only improves the payment process, but helps providers to build a much stronger relationship with their suppliers.
Eager to find a solution for the supplier payment challenges you’re currently facing? You’re in the right place. Discover how Trust My Travel’s pay-as-you-process travel payment solution allows you to pay suppliers on time, every time.
