The travel industry is on a strong rebound post-pandemic, experiencing a notable resurgence in activity and revenue.
And despite the rise of digital payments methods, Richard Wazacz, CEO at foreign exchange company Travelex, tells PYMNTS that the continued use of cash as the primary payment method for cross-border travel is fueling the increase in travel industry revenue.
“Cash is seen as a trusted mode of payment when you travel across borders,” Wazacz said. “A lot of payment methods are still very domestic or national-based, and consumers who rely on cash have the confidence that it will always work wherever they are in the world.”
Read more: Cross-Border Travel Will Keep Cash Alive, Says Travelex CEO
Aside from the confidence it gives travelers, Wazacz said cash offers a tangible means to track expenses, particularly valued by budget-conscious individuals grappling with cost-of-living challenges worldwide.
“If you’ve got $100 in your pocket, you know how much money you’ve got left,” he said, adding that it’s a clarity often lacking with electronic payment methods.
However, he highlighted a growing demand for a blend of cash and digital solutions, prompting the recent introduction of Apple Pay and Google Pay digital wallets to Travelex’s array of offerings.
Additionally, the company’s prepaid cards facilitate flexible currency exchanges without added fees, with Wazacz reporting a significant uptick in the sale of these travel money prepaid cards — from 1% to between 15% and 20% over the past 20 months — at Heathrow Airport, Travelex’s largest U.K. location.
“There’s a real appetite and desire for it,” he pointed out, while underscoring Travelex’s philosophy that “cash and card is the right way to serve customers’ needs when they travel.”
Digitizing Cash Access and De-Risking Currency Movement
The digital transformation continues to revolutionize various sectors, prompting even legacy brands like Travelex to embrace and integrate digital solutions into their offerings to cater to today’s tech-savvy consumers.
At Heathrow Airport, for instance, the company is currently piloting a self-serve kiosk initiative, which, compared to traditional ATMs, can accommodate larger transactions while still providing the option for counter service to address more complex needs.
Drawing parallels to the evolution of self-service in other industries such as self-check-ins at airports and self-checkouts at supermarkets, Wazacz emphasized the importance of providing choice and flexibility to meet diverse preferences and needs, ultimately enhancing the overall travel experience.
As he noted, “the self-serve kiosk is a platform for interaction and an opportunity to increase our ecosystem, eventually enabling people to do different things in different ways.”
Wazacz also highlighted ongoing partnerships with online travel agencies (OTAs) like Kayak and Expedia to offer foreign exchange (FX) cash as a solution earlier in the travel planning journey.
Essentially, a customer booking a holiday in November for the following summer will have the option to lock in exchange rates at the time of purchase, with the flexibility to reverse that decision if the currency rate at the time of travel proves more favorable.
According to Wazacz, this option serves to de-risk currency movements, providing customers with valuable cost-saving opportunities while ensuring a seamless and risk-free travel experience.
“When you purchase a flight ticket, you buy travel insurance and can also purchase your car and hotel in advance,” he pointed out. “[Similarly], we believe that there is a market where some customers would also value locking in or reserving the currency rate at that point of purchase.”
Business-Leisure Travel Shifts
With several markets worldwide poised for a record-breaking year in travel, Wasacz noted a significant shift in the business-leisure travel mix that will influence the dynamics of the travel ecosystem.
He cited recent reports by airlines like British Airways, which have observed a decrease in business class bookings alongside a surge in economy and economy plus bookings, indicating a notable increase in leisure and non-business travel compared to business travel.
“This [trend] clearly has impacts on the ecosystem because business travelers and leisure travelers behave differently and have different needs,” he explained.
Despite this current shift, he said there will be a gradual recovery in business travel as organizations balance the benefits of technology with the value of in-person meetings and face-to-face interactions.
He further highlighted the growth of point-to-point travel and reduced dependency on hub connections as another significant trend, particularly in China, where large regional airports now provide direct flights to multiple international destinations.
Overall, Wasacz said the trajectory this year points toward continuous growth and transformation in the travel industry, with “customer’s appetite for cash [remaining strong and] undiminished.”
