Growth vs. Risk in the Travel Industry

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Online travel bookings are flying high
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In 2014, global digital
bookings were already

But by 2020, they’re
projected to reach

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Travelers’ expectations are rising

Today’s travel companies win by providing...

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  • Convenience
  • Simple, streamlined checkout
  • Mobile-friendly experience
  • Last-minute bookings
  • Flexibility
  • Innovative products
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Of U.S. travel sales were
made on mobile in 2017

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Of mobile hotel bookings are
made within 1 day of a stay

“Consumers want authenticity, personalization, removal of friction, and on-demand functionality in their travel experiences.”
2017 Travel & Hospitality Industry Outlook

How do you deliver outstanding experiences without inviting fraud?
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Cost of payment fraud to the airline industry each year

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Of travel agency revenue is used to manage fraud

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Of businesses worry about preventing fraud without turning away good customers

Today’s travel companies are worried about…

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  • Account takeover
  • Payment fraud
  • False positives (customer insult)
  • Risk of moving into new markets
  • Staying ahead of changing fraud tactics
  • Delivering on travelers’ high expectations
How fraud happens in travel

Online bookings are a hot target for fraudsters because they:

Often involve third parties

Fraudsters can pose as travel agencies to scam real travelers.

Are intangible

Bookings don’t need to be picked up, or resold like a physical item.

Are high-ticket items

The average price of a fraudulent booking is $283-$588, so a fraudster's payoff is lucrative.

Are perishable and happen fast

A booking can expire in mere hours, so companies are racing against the clock to detect and block a bad purchase.

Signals of travel fraud

How can you tell a legitimate traveler from a fraudster?

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A legitimate traveler will probably…

  • Do multiple searches, spending time comparing a bunch of different options.
  • Return to the site several times, or forward a suggested itinerary to a friend.
  • Take hours to complete a purchase from initial thought to final order.
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Fraudsters behave differently. They might...

  • Buy tickets close to the departure date.
  • Change their tickets close to the departure time.
  • Purchase tickets with multiple stopovers, but other legs of the journey are canceled.
  • Use a single card with multiple travelers connected.

Common tactics used by travel fraudsters

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  • IP masking
  • Fake email addresses
  • Account takeover

The average price of a fraudulent travel booking

Machine learning can separate fraudsters from real travelers

It’s only when you apply behavioral analysis on a large scale, looking at all of a user’s activity and all activity of users across the travel industry, that you can get an accurate picture of whether someone is truly who they say they are.

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At Sift Science, we have over 16,000 signals we look at to identify fraud. Here are just a few examples:

  • Account age
  • Time until event
  • Seat selection
  • Order size
  • Destination
  • Buyer location
  • Device type / ID
  • Fare class

Sources: Statista, eMarketer, Zozi, IATA, Phocuswright, Sift Science

Download our ebook on Fraud in the Travel Industry

Read this Ebook to find out:

  • Top fraud challenges faced by travel companies
  • The pros and cons of common approaches to preventing fraud
  • Why innovative travel companies are employing machine learning to fight fraud

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