Travel Retailing and Indirect Distribution Models

This document is a research white paper that outlines the significance of indirect distribution in the travel retailing sector. It details how travel agencies operate under two distinct business models: the agency model and the merchant model. The agency model involves the travel agent facilitating bookings without processing payments, while the merchant model allows the travel agent to handle payments, becoming the merchant of record. The paper discusses the growing adoption of the merchant model, particularly in the context of the COVID-19 pandemic, which has prompted travel suppliers to reassess their distribution strategies. It highlights the benefits of the merchant model, including enhanced customer experiences, diverse payment options, and improved fraud management. Additionally, the document emphasizes the role of virtual cards in optimizing B2B payment strategies for travel agencies, ensuring that both suppliers and travelers benefit from these advancements. The paper concludes by noting the increased awareness of the advantages of indirect distribution and the merchant model in the travel industry.