After years of reduced activity, international air travel has restarted, and people are eager to take to the skies once more. In 2024, there will be more than 4 billion travellers worldwide, reaching pre-COVID-19 levels. In Asia Pacific (APAC), travel is anticipated to quickly recover, with travel search volume rising by 50% year over year in Q4 2022.
However, airports and airlines are now finding it difficult to keep up with the recovery after cutting employees owing to the protracted slowdown in travel demand. Since the summer of 2022, we have witnessed airports and airlines in Europe struggle to meet the rising demand, which has resulted in dissatisfied passengers and an increase in flight delays and cancellations.
Flight cancellations and delays annoy travellers
In Australia, during the fiscal year that ended in June 2022, the average on-time arrival rate for airlines was just 77%, while the average departure rate was 76%, and the annual cancellation rate was 8.3%.
There is little doubt that flight cancellations and delays will increase the volume of insurance claims, which unintentionally causes longer wait times and low Net Promoter Scores (NPS), which have historically plagued the airline business. The average NPS for the aviation industry in 2020 was -1, which is 13 points lower than the average for all industries.
The travel sector is still anticipated to be on track to recover to profitability in 2023 despite decreasing consumer satisfaction, as they continue to cut losses resulting from the COVID-19 pandemic’s effects on their business in 2022.
Travel companies may increase traveller confidence by providing embedded security
Airlines are bearing the burden of irate and frustrated travellers as stories of flight delays, cancellations, and misplaced luggage scream for media attention. There are choices easily available, nevertheless, to assist passengers in controlling their travel hazards.
Although trip protection is nothing new, more passengers are now looking for protection from their preferred travel companies to defend their interests. In the Embedded Insurance Travel Report, which Momentive.ai and Cover Genius commissioned, it is revealed that 45% of travellers worldwide prefer to purchase insurance directly from their travel agency, airline, or travel provider.
The ability to offer clients “Cancel For Any Reason” (CFAR) protection should encourage travel companies to act as intermediate agents and close any protection gaps that passengers may experience. Travellers can book their flights through CFAR with the assurance that they will get a full refund if they need to cancel for any reason, including illness, a disruption in public transport, or bad weather.
Travel companies can use embedded protection to provide their customers with customised solutions that can address these issues in advance of better resourcing and operations anticipated for the rise in demand. Giving customers the proper protection at the moment of booking may help businesses create additional auxiliary income. The addition of a straightforward baggage protection or flight delay option for clients can ensure that travellers are immediately compensated should there be any baggage delay or disasters as airlines struggle with lost and delayed bags.
You eliminate the cumbersome second step of looking for and buying third-party travel insurance after purchasing airfare by providing your consumers with incorporated protection during the booking process.
Source: traveldailymedia