The travel industry makes millions of vacations and trips possible every year. New apps and websites have allowed travel businesses to evolve and accommodate travelers in new ways.

As valuable as the travel industry is, travel merchants face challenges in qualifying for merchant services. Factors such as economic ebbs and flows make the travel industry high risk to banks.

What Businesses are in the Travel Industry?

The travel industry includes air, water, rail, and road sectors. These businesses can also be considered as under the tourism industry. Small travel businesses have a more difficult time with payment processing and managing chargebacks.

Lodging: Bed & Breakfasts, Hostels, Motels, Hotels, Timeshares.

Travel Agency: Consultations, Accommodations, Planning, Personal Assistance, Event Planners.

Rentals: Car Rental, Bike Rental, Equipment Rental.

Guided Tours: Escorted Tours, Ship Tours, Adventure Tours, Translators.

Travel Social Media: Photography, Blogging, Influencer Pages.

Entertainment: Amusement Parks, Museums, Hikes, Shows.

Your travel business can be as common as a hotel or a specialty like blogging. Not all travel companies will have the same kind of barriers to payment processing. However, most businesses in the industry are considered to be high risk.

Why is the Travel Industry High Risk?

High Ticket Prices

High ticket items refer to products and services that are on the expensive side.

The travel industry sells high ticket items such as lodging reservations, airline tickets, and car rentals.

Any business that has high ticket prices faces a high risk status. Refunds and chargebacks are more challenging to deal with when the total costs are pricey.

Frequent Cancellations

Most travel services require reservations. Companies can do everything that they can to make sure customers keep their reservations, but cancellations are inevitable.

Cancellations then require refunds. Some businesses decide not to charge until reservation dates approach.

Customer service and refund policies must be robust for travel businesses. A missed refund can lead to a dispute and a chargeback. Additionally, customers may forget to cancel a reservation or ask for a refund. They may still file a dispute without consulting the company first.

This high rate of cancellations is a large risk factor. Unresolved disputes and refunds can quickly spiral into a pile of chargebacks.[

Electronic and Phone Payments

Travel services such as agents, tours, and lodging require customers to pay over the phone or online. As common as card-not-present transactions are today, there is still a risk factor that comes attached.

Fraudulent companies posing as travel services make an impact on the industry as a whole as well. Traditional banks don’t always have the experience and tools to determine if an online travel business is legitimate. This can hinder other travel companies from obtaining payment processing services.

Third-Party Processing

Third-party processing platforms offer package deals for travelers. This can include flight tickets, lodging, rentals, and more. These websites allow customers to pay all at once and let service providers contact other businesses for them.

In the case of cancellations and other complications, these travel agency platforms must correspond with each service a client initially paid for. This makes for a complicated business model that may not always get refunds back in time from the businesses they sell for.

Emergencies and Weather

Personal interferences cause customers to cancel. However, emergencies and severe weather impact large amounts of travelers. This requires travel businesses to issue mass refunds.

Emergencies are out of businesses’ and travelers’ control. Unpredictable circumstances bring banks unease when they consider who to provide for.

Revitpay’s Solution for Travel Businesses

A high amount of chargebacks in your travel business may be causing you unnecessary frustration. Revitpay specializes in high risk merchant services, including credit card payment processing. We give you access to high risk merchant accounts, fraud protection, chargeback management, and more.