Ebook

The State of Online Travel Fraud

Still Riding a Wave of Growth

When Expedia launched in 1996, few people believed it would grow into the travel behemoth it is today. The idea of booking cars, hotels and flights online seemed far fetched. In 2017, the company took $88 Billions in gross bookings.

Expedia’s growth mirrors that of the online travel industry at large. Digital travel sales worldwide are expected to reach $817,54 Billion worldwide by 2020, a number fueled by review sites, e-commerces of travel company websites, and third party ecommerces acting as ticket brokers and resellers.

Travel Industry Challenges

The proliferation of these third party online stores does mean competition is fiercer than ever. With razor-thin margins, travel companies must remain agile while adapting to an ever changing consumer landscape, whether it’s to cater to the rise of mobile payments, personal recommendations, or new travel destinations. In fact, even Amazon could not remain competitive in the online travel market, dismantling their Amazon Destinations programme in 2015.

Moreover, online travel companies are increasingly becoming targets of fraud. While every vertical faces fraudulent attacks, online travel fraud has its unique set of challenges. In this detailed report based on SEON’s expertise as a fraud prevention tool for a number of renowned travel companies, we will examine these idiosyncrasies, dive into the analytics, and explore the best solutions currently available to fight, deter, and reduce fraud.

  • Projected digital travel sales volume by 2020: $817,54B.
  • Percentage of digital sales in the whole travel industry: 50%
  • Percentage of airline and hotel bookings through mobile: 27%
  • Estimated yearly cost of fraud for the travel industry: $859M

Fake Credentials – Real Consequences

In the UK alone, more than 4,700 passengers were resold tickets bought by scammers in 2017 – losing an average of £1,500 per person. Talk about a ruined holiday. And worse – that’s an increase of 25% year on year – which means scammers ran away with £6.7 million that year.

Europol, The European Union Agency for Law Enforcement Cooperation, therefore launched an operation designed to catch and prevent travelling on illegal tickets. The GGAD, or Global Airport Action Days, detained 195 individuals in 2017 to dismantle organisations benefiting from illegal travel tickets. However, identifying victims from criminals remains challenging for law enforcement organisations. Unsuspecting travelers are detained, but rarely charged with any crimes.

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