IT complexity compounds soaring travel transaction failures

Peter Dinham
Wednesday, 05 August 2009 16:58

Business IT - Technology

A survey of the worldwide travel industry has found that 98 percent of travel firms have lost, on average, US$11.5 million a year through failed transactions such as reservations, bookings and traveller check-in.

Research commissioned by Progress Software Corporation surveyed 149 global travel businesses and found that 67% had noticed their transaction failures soar by almost a third, even though their transactions have only increased by 12%.

According to Progress, the survey suggests that the complexity of the IT environment is compounding the issue of failed transactions, with 85 percent of travel companies trying to reduce costs by delivering services through multiple channels.

However, says Progress, 97% said that this approach caused IT complexity and 52% of them rated that complexity “4” or “5” on a 5-point intensity scale.

“Understandably, the travel industry is trying to reduce operating costs to increase profit to compete in the challenging economy,” says Dan Foody, vice president of Actional products, but according to Foody, by embracing new and more cost effective channels, for example kiosks, “companies are actually increasing their IT complexity and reducing visibility of changing conditions and customer interactions.
 
“In turn, this is driving a rise in transaction failures which could actually waste money for the travel sector,” Foody said, adding that the survey indicated that businesses are not only losing money but they also face the loss of repeat business through customer churn.

Foody cautions that the concern voiced by the survey respondents regarding customer experience and customer churn suggests that the $11.5 million in lost revenues could be a conservative one, with many businesses unsure exactly how the customer experience is impacted by transaction failures “rendering themselves unaware of the true situation.”

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