by WEX Travel
Americans are notorious for not using their vacation days. Of those Americans who do take time off, most stay within the US; with fewer than half of Americans having passports, they lack the travel documents needed to travel abroad.
Despite those relatively small numbers in the past, there is an increasing trend towards increased overseas travel. In fact, 2015 saw more Americans traveling abroad than ever, with an eight percent increase compared to the previous year. That increase is likely to continue, due to both general trends and generational trends.
Economic, Technical, and Political Factors Increasing Travel Abroad
The opportunity to travel to Cuba has opened a new, "unspoiled" Caribbean destination to Americans. Airfares are affordable and the growth of home sharing has expanded the available accommodations. International travel is made less scary through the apps that offer navigation and translation assistance. Globalization also means more international travel for business purposes.
Generational Factors Increasing Travel Abroad
Both Baby Boomers and Millennial travelers have personal motivations for traveling internationally. The generations differ in their reasons, as they do in so many other ways.
Baby Boomers' Reasons for Traveling Abroad
Baby Boomers who retire have the leisure time as well as money for travel. The AARP notes that nearly all of them plan multiple trips. AARP also reports that close to half will include an international destination.
One reason for including those international destinations is that as they get older, Boomers want to check places off their bucket list. They also want to bring their families with them to share unique experiences.
Millennials' Reasons for Traveling Abroad
Millennials' travel is also driven by the desire for unique experiences and exploring different cultures. They crave authenticity, whether through eating typical local cuisines or using public transportation. They're highly influenced by their social networks, relying on recommendations and the images others post in order to select their destinations. Travel to international destinations gives Millennials exciting images to post on their own feeds.
Impact on Online Travel Agents: Opportunities and Challenges
For online travel agents, the increased interest in international travel means additional opportunities for sales. You can spur sales by providing additional information about overseas destinations to travelers and including exciting images of international locations on social media.
The increase in international travel also means online travel agents will interact more with overseas suppliers. You may need to negotiate contracts with more hotels and track more details.
Managing payments can become more complicated, as different locales have different standards for invoicing and provide different levels of detail. The need to convert currencies adds additional opportunity for error as well as introducing pricing risks. The international payment methods add fees and can take time for settlement. Manual reconciliation of these payments is time-consuming.
Virtual payments or Virtual Card Numbers (VCNs) help alleviate the processing issues, as well as saving costs on international payments. Through a VCN, the travel supplier charges the amount due either in their local currency or US Dollars. WEX's VCN supports billing in 21 currencies, allowing you to pay your supplier in local currency and settle with WEX in that currency too which avoids FX fluctuation risks as well as fees that are commonly charged for currency conversion and/or cross-border transactions. In addition, WEX VCNs offer the ability to pay suppliers in over 45 currencies, avoiding unnecessary currency conversion or cross-border fees, while settling with WEX in US Dollars.
Because you can set start and end dates for the cards as well as transaction limits, the chance of duplicate or erroneous billing is reduced. Detailed transaction information and reporting makes reconciling straightforward. Since the VCN is used just once, you can easily associate it to the transaction for validation.
With Americans traveling abroad more in search of relaxation and adventure, there's a world of opportunity for online travel agents to meet their needs. With the right payment methods, you can sell that overseas travel and pay your suppliers without needing a vacation of your own!