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Travel landscape overview
The travel industry continues to regain health as consumers make up for lost vacations and corporate 20%
travel reignites. With restrictions removed across geographies, travelers are now more easily making work
and leisure journeys and travel figures are back to pre-pandemic levels in almost every regard.
Research from the Mastercard Economic Institute shows that global leisure travel remains robust. About Growth in tourists
285 million people travelled internationally during Q1 2024 only, a 20% increase compared to the same who travelled
period in 2023. internationally in
Q1 2024 up to
285M
The value of the indirect channel
Historically, greater emphasis may have been placed on the direct booking channel by many travel
suppliers such as airlines. However, the growth of the indirect channel is clear, and it is important to
1.5T$ recognize its value so that all potential opportunities can be captured.

Increasingly, consumers are now turning to travel agencies for logistical support, providing consumers
with expertise in local geographies and providing them with peace of mind.
Anticipated This trend is reflected in YoY double-digit growth for online travel agencies (OTAs). Overall, the OTA
revenues market is anticipated to generate revenues of around $1.5T by 2027 and are now estimated to own 40% of
generated by the the overall travel space. It is essential that travel suppliers embrace their relationship with OTAs,
OTA market by leveraging their footprint, expertise and marketing expenditures. By embracing the indirect channel, travel
2027
suppliers can maximize sales potential which has never been more important.

Travel agencies re-booting of B2B payment practices
In the past, most travel agencies acted as intermediaries, relaying the consumer’s payment
information to the airlines, hotels, tour operators and small suppliers that comprise an individual’s
itinerary. But as the network of suppliers expands, this “pass-through” model has become riskier and
more frustrating for agencies and consumers alike. 2X
That’s why a growing number of travel agencies are adopting the merchant of record model with a
reported growth of 34% vs 2019. As the MoR, the travel agency collects the customer’s payments for growth rate for global
all services booked through them, authorizes the transactions and then pays the individual suppliers agents acting as MoR as
tied to the booking. The MoR model enables travel agencies to own the end to end consumer compared to the overall
experience, capture additional cross selling opportunities and provide consumers with local OTA market
payment methods and other options such as Buy Now Pay Later installment methods.
Migration from the pass-through to the MoR model is massive and OTAs acting as MoR posted 43%
CAGR from 2020 to 2022, doubling the overall OTA market growth in the same period (20% CAGR).

Considerations in choosing a B2B payment solution
Rebooting B2B travel payment strategies to meet challenges of the new travel landscape can seem daunting. The path forward
is to integrate single-point control and digitization into operations by transitioning to the merchant of record model, powered by
virtual card technology.
Not all VCN solutions are equal
Virtual cards are the future of travel payments, advancing the
B2B payments should be at the core of merchant of record payment model and delivering benefits
your strategy across the travel value chain. Mastercard has taken the proven
technology and adapted it to the specific needs of the travel
Tas should build an operationally B2B resilient industry, based on sector expertise and customer feedback
structure, with flexibility to support various
products and markets, and that will boost revenue There’s power in partnership
and protect valued relationships with customers The travel ecosystem has never been more connected, and the
and suppliers around the globe while supporting
growth and expansion ambitions. future health of the sector relies on mutual growth. TA B2B
payment strategy should support flexible products and services
Payment program should not hold TAs back, but
instead propel them towards surpassing goals. and help foster greater collaboration among travel buyers,
suppliers, financial partners and technology partners