Blog: The journey to improved travel business productivityPosted on 22 May 2017 by Synden Grieve
In the price-sensitive travel industry it is remarkable how many businesses continue to place themselves, willingly or not, at the risk of foreign exchange fluctuations and manual data entry.
The knock-on effect of such an exposure affects all aspects of the travel business model impacting, as it does, on regulatory obligations and the payments process. This exposure is not necessary. An efficient payments process can go a long way to managing the pitfalls of foreign currency fluctuations. This process can, in turn, improve business productivity.
Travel companies can protect profits and maintain reputations with an efficient payments process that includes a commitment to an FX hedging strategy that meets regulatory obligations. Here are just three tips to implement a robust systems overhaul:
1. Utilise FX hedging tools
Currency exchange fluctuations are an unfortunate reality for the travel industry. Insulating your business from the whims of the FX market is extremely important. You can, for example, be affected by geopolitical matters outside of your control that impact upon FX markets, e.g. Brexit. McKinsey & Co state that when done well “the financial, strategic, and operational benefits of hedging can go beyond merely avoiding financial distress by opening up options to preserve and create value as well.” As the travel industry is extremely price-sensitive it is one that is exposed – on a daily basis – to the risk of FX fluctuations. This risk will, if not addressed properly, adversely affect margins and profits. Travel companies, therefore, require a coherent and robust policy on FX hedging.
2. Reduce errors and risk in the payments process
Errors are commonplace when, for example, a manual data entry process is used. It is also slow and people lose focus. It doesn’t need to be so. There are multiple pieces of software available that travel businesses can integrate at a convenient price point. This is a systems change that has considerable upside. An integrated, automated payments system can improve efficiency, accuracy, and cost-effectiveness. A trusted payments partner – typically one that integrates with all major ERP systems and accounts systems – can make a radical difference to how a business functions.
3. Treat data as if it is your own
Travel businesses processing payment data must implement the highest of standards to protect their customer’s valued data. This is non-negotiable. In the face of multiple high-profile data hacks a trusted data protection plan is expected of businesses. In reality, customers demand it. Tackling hacking and fraud is of paramount importance. Today, the management and the protection of payment data are ever-present concerns for clients and stakeholders alike. There is help at hand: seek out companies that have received awards such as the ISO 27001 certification. These certifications show who you can trust and are critical in the safeguarding of both client and business data against potential data comprising threats. A travel business that integrates a robust information security management system ensures that – as per the ISO official site – the “quality, safety, service, and product reliability has been safeguarded to the highest level.” Integrating with an ISO 27001-certified payments solution ensures that:
- Client and employee information is protected to the highest level
- Risks to information security will be effectively managed
- Regulatory obligations are met, and
- The brand, and reputation, of the travel business is protected
Great services, enhanced
A combination of these three approaches will protect travel businesses from risk, improve productivity, and enhance reputations.
As a result of this three-pronged approach to improving internal systems costs can be controlled and the front-end service greatly enhanced.
Written for the ETAG website by Anna Hay from Fexco