Article

Trip stacking: What does it mean for payments?

Thomas Helldorff | VP Airlines Travel and Hospitality, Worldpay from FIS

April 06, 2022

The travel industry is moving forward with a renewed sense of optimism and new ways of adapting in a post-pandemic world. 1

The lessons learned over the past two years are still just as relevant as they were at the beginning of the pandemic, but now that train doors, hotel rooms and airport gates have reopened to travelers, new approaches are needed.

Choice and flexibility are returning to the market, and travelers are embracing them. A third of consumers expect to travel more this year.2 But securing a holiday is a very different process to what it once was.

What is “trip stacking”?

To combat uncertainty, many customers have adopted the tactic we now call “trip stacking.” Trip stackers may book multiple trips, hotel stays or flights all on the same date, just in case one or more of them is canceled.3

While this does provide an extra layer of flexibility, not every travel company will be pleased. Airlines, for example, are hit hard by trip stacking, as last-minute changes can mean empty seats, wasted resources and frustrated forward planning.

As this trend evolves, it is important to ensure your online payment processes are simple, and that your refunds process works for both your business and your trip-stacking customers.

Why travelers are booking for plan A, B and C

In the wake of the Delta variant, 33% of US travelers had to completely cancel travel plans and 22% had to change plans.3 And though many restrictions have been lifted, travelers and travel companies alike are still feeling the effects of the pandemic.

This means holiday makers have had to become savvier. One travel booking app reported that sales of its “cancel travel for any reason” add-on went up by 54% over a 12-week period in 2021.4

This isn’t deterring all potential travelers, however. According to recent Worldpay research, travel is expected to attract the third highest amount of customer spend this year.5 Let’s look at three key travel market trends, how they’re changing travelers’ expectations and what airlines can do to respond.

Expectation 1: Flexibility

Flexibility continues to drive decision making in travel. In fact, 57% of travelers expect bookings to be flexible.6 84% of US travel marketers are aligned on offering flexible booking options, but 31% are not set up to offer these options yet.6

To build more flexibility into offerings, travel companies should start by reviewing cancellation policies and payment processes, ensuring that customers can pay – and change plans – according to their preferences.

Expectation 2: Transparency

Trip stackers will be seeking clear and visible terms and conditions around canceled travel.

41% of travelers are more likely to book with an online travel agent that demonstrates it offers some form of consumer protection.7 Furthermore, 48% would be more likely to book if they saw a digital security logo.7

These facts combined go to show that travelers are discerning and will explore their options carefully before booking. Ensure you give them all the information they need upfront including clear details on when and how customers can expect refunds.

Expectation 3: Easy refunds

If travelers are trip stacking, it is likely that they expect to request a refund at some point in the customer journey.

Where possible, you should ensure that your online payment processes allow for automated, frictionless refunds. Compared to manual processing, automation could save your business time and money and provide a better experience for customers.

In the case of airlines – where adapting to trip stacking might tighten up booking policies to minimize overbooked flights – refund policies should be clear. Again, customers expect transparency in when, how and if they will receive refunds. Ensuring you offer the experience they expect could help boost satisfaction and reduce the risk of chargebacks.

Do expectations align with business goals?

Some operators see trip stacking as “gaming the system,” with the potential to leave seats or rooms empty at late notice. Others accept the practice and could, in fact, benefit from increased bookings.

However, we can’t ignore the potential impact. Airline revenue management systems, for example, learn from historic data to make forecasts for fares and availability. Trip stacking has the potential to break or obscure these patterns, making it harder to forecast effectively. This could lead to real business impact, as well as fewer affordable flights for customers.

But whatever your business offers, one thing remains clear: meeting the customers’ expectations is a high priority.

Balancing expectations and payment reality

To minimize the potential impact of trip stacking, businesses could seek to speak directly to customers, remaining transparent and providing them the flexibility they demand.

Should providers wish to dissuade customers from trip stacking, they could request an initial, non-refundable deposit for travel, followed by an automated, incremental payment to cover the remainder of the cost. If they ultimately canceled travel, a swift refund could be issued, alongside options for alternative travel.

For providers that allow trip stacking, instalment payments could enable travelers to safely spread the cost of holiday bookings, which could encourage them to spend and book more.

Finally, protecting your business from friendly fraud is now crucial, as trip stacking could lead to an increase in chargebacks if a simple refund process isn’t put in place. A solution like Dispute Solutions Suite could allow you to deflect chargebacks and protect revenue.

Go farther with Worldpay

With travel spend likely to grow over the next year,5 it’s time to adapt to new trends to ensure you’re winning vacation spend. Clarity, simple refund processes and instalment options could help you achieve this.

Talk to us today to discuss how we can help you meet traveler expectations while helping you protect vital revenue.

1. WTM (2021) Industry Report: Industry execs optimistic travel recovery will be under way in 2022. Available online at: https://hub.wtm.com/press/wtm-london-press-releases/industry-report-industry-execs-optimistic-travel-recovery-will-be-under-way-in-2022/ [Accessed 03/02/22]

2. Worldpay from FIS (2021) Generation Pay 2021 Report. Available online at: https://worldpay.globalpaymentsreport.com/en/ [Accessed 31/01/22]

3. Koebert, J. (2021) More than half of Americans have changed or canceled travel because of the Delta variant. Finance Buzz. Available online at: https://financebuzz.com/covid-travel-survey-delta-variant [Accessed 02/02/22]

4. de León, C. (2021) Fall Travel Trends: Have You Heard of ‘Trip Stacking’? (You Will). The New York Times. Available online at: https://www.nytimes.com/2021/09/03/travel/travel-trip-stacking.html [Accessed 31/01/22]

5. Worldpay and Savanta. (2022) Research for Generation Pay 2022.

6. Boyce, N. (2021) 151M next-gen travelers will reignite the travel industry. Google. Available online at: https://www.thinkwithgoogle.com/consumer-insights/consumer-trends/trending-visual-stories/next-gen-travel-data [Accessed 02/02/22]

7. Worldpay from FIS (2020) Power Your Payments: Travel. Available online at: https://offers.worldpayglobal.com/payments-travel.html [Accessed 02/02/22]