On the rise in travel purchases on online platforms

07-07-23

With summer on the horizon, people are looking for their next holiday destination to get away from it all, and to do so, according to fintech company EBANX, tourists are turning to online platforms to buy their next trip. In 2022, it was recorded that in Latin America 53% of travel sales were made through online platforms compared to 47% that were made offline, and it is estimated that by 2023 the volume of virtual tourism purchases will reach $70 billion.

The study also found that despite the fact that 72% of Latin American adults do not have a credit card, nearly 70% of online travel purchases were financed with this credit product, among other reasons, because of the payment flexibility it offers. Providing the possibility to split the total cost in instalments can be a decisive factor even more than the price, and even for sellers it can increase the average value of purchases by up to 6 times.

"Digitalisation is here to stay and now more and more aspects of our lives are taking place in the virtual world, tourism has been no exception as online platforms are increasingly being used to purchase travel. While the progress that has been made in the industry is evident, there are still areas of opportunity such as payments: it is essential to enable more and more financing options that adapt to the needs of consumers who now demand the ability to split the total cost of a trip into different payments," says Raul Cordero, senior manager of Strategic Payment Alliances for EBANX.

According to Americas Marketing Intelligence, credit and debit cards were the most used financial products in Latin America during 2021 to buy a trip with 70% and 9% of the volume respectively, however, other alternative payment methods such as electronic transfers, cash-based payments, digital wallets and BNPL (Buy Now Pay Later) are beginning to appear on the scene for that segment of the population that is not necessarily banked or does not have a card. The adoption of APMs (Alternative Payment Methods) continues to grow, and in Mexico they already represent 34% of e-commerce volume.

Thus, companies in the tourism sector must adapt to new technologies and market needs in order to be competitive and provide tourists with the flexibility they require.

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