Win customers, post-Brexit, with the right payment strategy - Slides from the WEX travel webinar

Win customers post-Brexit with the right payment strategy

WebinarNovember 3, 2016

Your hosts

Sean O’NeillEditor in Chief & ModeratorTnooz

Gene QuinnCEO & ProducerTnooz

Your presenters

Lee JacksonHead of European New BusinessWEX Europe

Martin AlcockDirectorThe Travel Trade Consultancy

Poll no. 1Where are you located?

Poll no. 2Which industry segment do you represent?

CONFIDENTIALANDPROPRIETARY 6

Overviewofwhatwe’recoveringtoday

Brexitareasofimpact

WEXWhitepaperobjectivesandfindings

Areconsumersstilllooking,bookingandtravelling?

Whatdoesthismeanforpayments


Background2015

TheUKtravelindustryhasbeenprojectedtogrowbyaround4%ayearthroughto2017,however,theindustryisfacingsomemajorchallengeswhichthreatengrowth,includingterroristattacksinpopulartouristdestinations,theongoingrefugeecrisisthatiscreatingtensionwithinEurope,andtheUKreferendumvotetoleavetheEU.

WEXEuropeWhitepaperMay2016


Background2015

TheU.K.isnowEurope'slargesttravelmarketwith€59billioningrossbookingsin2015,ofwhich€33billionwasbookedonline.Itshighonlineadoptionrateofnearly57%issecondonlytoScandinavia's63%.Asthesetwomarketsreachsaturation,Germany,Italy,andSpainwillbecomethenewgrowthleadersinonlineadoption.

Phocuswright


WEXWhitepaper

Post-Brexit:ConfidenceRemainsTheKeyToSuccessInTheTravelIndustry,howhasBrexitimpacted:

Thefrequencyoftravelabroad

Spendingontravel

Long-haultravel

Popularityofdestinations

Factorsimpactingplans


WEXWhitepaper

Smalldecreaseinthenumberofconsumersplanningtotravelabroad2ormoretimesinthenext12months.

25%arenowplanningtotravel3ormoretimes,comparedto35%previously.

Averageamountperpersonhasdroppedby11%.


WEXWhitepaper

Pre-BrexitMaysurvey,46%ofconsumerswereplanningatleast1long-haultripinthenext12months.

FollowingBrexitthishasincreasedto51%.

Slightdecreaseinthenumberoftripsplannedbythosetravellinglong-haul– 1.9tripscomparedto2.1perpersonpreviously.


WEXWhitepaper

Capacity- Spainisthedestinationthatmostconsumersplantovisitwith47%.

25%concernedwithitbeingbusyandovercrowded.

WesternMedhotspots,PortugalandItaly,alsofeatureinthetop10inbothourpre- andpost-Brexitsurveys

ConsumersintendingtovisitGreeceandtheGreekislandshasincreasedto40%(from17%previously).

Croatiaisadestinationtowatch.


WEXWhitepaper

Egypt,TunisiaandTurkeythetop3destinationsthatconsumersdonottointendtovisit.

MiddleEasternandNorthAfricancountriesdominatethelistofdestinationstoavoid.

AlongwithcountrieswherecrimesagainsttouristshavebeenwidelypublicisedintheUKpress.

BrexitisnotkeepingconsumersawayfromEuropeandestinations.


WEXWhitepaper


BrexitImpact:Confidence


BrexitImpact:Confidence


BrexitImpact:Currency

1.5

1.4

1.3

1.2

1.1Oct Dec Feb16 Apr Jun Aug

EUR per 1 GBP 24 Sep 2015 00:00 UTC – 23 Sep 2016 13:47 UTCGBP/EUR close: 1.15495 low: 1.15236 high: 1.42962

1Y



1.5

1.4

1.3

1.2

1.12012 2013 2014 2015 2016

EUR per 1 GBP 24 Sep 2015 00:00 UTC – 23 Sep 2016 13:47 UTCGBP/EUR close: 1.15495 low: 1.15236 high: 1.42962

EUR to GBP is not new territory

5Y


US$ to GBP is unprecedented in the past 5 years USD per 1 GBP 25 Sep 2011 00:00 UTC – 23 Sep 2016 13:56 UTCGBP/EUR close: 1.29470 low: 1.28897 high: 1.71607


1.65

1.55

1.45

1.35

1.252012 2013 2014 2015 2016

1Y

Poll no. 3What is your current booking volume

looking like? (travel sellers only, please)


BASEDONASAMPLEOF70TTCCLIENTS

Touroperators

Source:TTCanalysis

22%Averageprojectedrevenueincreasefor2016/17


Consumers

Aretheylooking?

Aretheybooking?

Aretheytravelling?


Consumers:Aretheylooking?

Source:GoogleAnalyticskeywordsearch

HolidaySearches

100

1.55

1.45

1.35

1.25Apr’14

120

100

Jan‘14 Oct’14Jul‘14 Apr’15Jan‘15 Oct’16Jul‘15 Apr’15Jan‘15 Oct’16Jul‘15

• Verysimilarholidaysearchprofile

• TherewasanoticeabledipinJune2016

• BymidSeptember2016,searchvolumeshadrecovered


Consumers:Aretheybooking?

Booked Notbooked

Summer2016SeasonSeasonalmostfullysoldbytheendofSeptember• BookingsareUP4%• RevenueisUP1%

KeyTrends:• FamilyholidaysUP• Shortbreaks(6nightsorless)UP – Consumerstradingdown?• SpainBalearicsandGreeceallshowingDOUBLEDIGITPERCENTAGEGROWTH

• Longhaulalsopositive,UP7%• TurkeyDOWN22%• EgyptDOWN70%


Consumers:Aretheybooking?Winter2016/17Season

Booked

Notbooked

Winterholidayseasonisusually40%soldbytheendofSeptember.• BookingsareUP17%

KeyTrends:• Shorterduration6nightsorlessUP30%• BigincreaseinSelfCateringUP30%

Booked

Notbooked

SUMMER2017SEASONNextsummerisnormallyaround15%soldbytheendofSeptember.• BookingsareUP5%

KeyTrends:• FamilybookingsUP12%• Shortbreaksof6nightsandunderUP58%


• InAugust2016,UKresidentsmade9.1millionvisitsabroad,anincreaseof6% comparedwithAugust2015.

• Inthelast12months,UKresidentsmade68.4millionvisitsabroad,anincreaseof7% comparedwiththepreviousyear.

Consumers:Aretheytraveling?

Source:OfficeofNationalStatistics

UK residents’ visit abroad

UK residents’ visits abroad % change from year earlier Expenditure (£ million) % change from year earlier

Non-seasonally adjusted

Aug 2016 9,120 +6 6,070 +10

June to Aug 2016 23,010 +5 14,590 +7

Year to date 2016 47,940 +6 29,180 +9

Latest 12 months 68,440 +7 41,430 +9


ReasonsToBeCheerful ReasonsToBeFearfulEnquiries andbookingsseemtobeholdingup sofar.Winter16/17 andSummer17

bothmadestrongstarts.

Consumerconfidence hasdroppedbutnottoomuch.

Oilprices shouldstaylowfortheforeseeablefuture.

Airlinecapacity cutscoulddrivepriceincreasesin2017.

CurrencyhasweakenedagaininOctober.GBP:EUROaround1.11andGBP:USD

below1.30.Thiswillmakepricingfor2017achallenge.

Westilldon'tknowwhatBrexitwilllooklike.

Prosandcons

Poll no. 4As a result of Brexit, what changes have you

made to spending for marketing and staff costs? (travel sellers only, please)


ImpactforPayments

Supporteasiercontractingtoextendsupplierbaseandaccessnewdestinations

Extendsuppliertakeupthroughextendedoptionsforacceptingpayments

Rapidresponsetochangesinresortdemand


ImpactforPayments

Moredemandforcashflowassistancetosupportbookingcampaigns

Morefocusonsuppliercreditlinesandcreditcontrol

Supportingthecashflowchallenge


ImpactforPayments

Paymentsolutionsneedtoallowfulltreasurycontrol

Supplierswelcomeeasypaymentswhenacceptingnewpartnersfordistribution

Managingcurrencyfluctuation

Poll no. 5Are you adjusting your payment strategy in the

next 12 months? (travel sellers only, please)

Q & A

Thank you!WEX Travel whitepaper:http://bit.ly/2fiphmz

Send your questions and comments to [email protected]

Replay and presentation will be available on www.tnooz.com

Win customers post-Brexit with the right payment strategy

WebinarNovember 3, 2016