Chargebacks in Travel & Hospitality: How to protect your Margins

Chargebacks in Travel: How Agents and Hotels can protect their Revenue

At Antravia, we know that chargebacks are one of the most persistent financial headaches in travel. On the surface, they look like a simple dispute between a customer and their card issuer. In reality, they are a slow-moving cash flow drain, a profit risk, and in some cases, this could tip your business from a healthy booking business and one in constant recovery mode.

In the U.S. alone, the travel sector has one of the highest chargeback rates of any industry. According to Verifi’s dispute data, some OTAs and high-volume agencies experience annual chargeback rates of 0.7% to 1.5% of transactions, which is a level that can trigger extra scrutiny from merchant acquirers and even higher processing fees. For smaller agencies and hotels, just a handful of disputes can wipe out monthly profit.

At Antravia, we are updating our dedicated white paper on payment control in travel, which will include a deep dive into chargeback trends, prevention strategies, and dispute win rates by sector. This blog is an advance look at some of those insights.

1. Understanding the Chargeback process in Travel

In accounting terms, a chargeback is a forced reversal of a card transaction by the card issuer, removing funds from your merchant account and returning them to the cardholder. Unlike a voluntary refund, a chargeback is initiated without your agreement, and often without you having had a chance to resolve the customer’s complaint.

In travel, disputes often arise from:

• Service not provided — e.g., a cancelled flight, closed hotel, or itinerary changes.

• Dissatisfaction — the cruise cabin was smaller than advertised, or the tour didn’t match the brochure.

• Fraudulent use — stolen card details used to make a booking.

• Double charging or billing errors — often the result of system glitches or split payments not matching invoice records.
  
  

The process is not instant. A typical Visa or Mastercard dispute can take 30 to 120 days to resolve, tying up funds in the meantime. For high-ticket items such as river cruises or long-haul holidays, that can mean $5,000 to $20,000 per case sitting in limbo.

2. Why Travel is a Chargeback Hotspot

Travel bookings are unusually vulnerable to chargebacks because:

• They are future-dated transactions — the time between booking and delivery increases dispute windows.

• Many bookings are made online and without signature.

• High-ticket sales attract both opportunistic disputes and fraud attempts.

• International payments and FX differences complicate dispute evidence.
  
  

Hotels and agents often assume that simply having a signed booking confirmation will win a dispute. Unfortunately, card schemes place heavy weight on the cardholder’s claim unless you can prove not only that the booking was valid, but that the service was delivered exactly as promised.

3. The Accounting impact of Chargebacks

From an accounting perspective, a chargeback is not just a temporary reversal and this affects multiple parts of your financial reporting:

• Revenue recognition — If you booked the income in the month of sale, you will need to reverse it, which can distort monthly performance figures.

• Cash flow — Processing fees and withheld funds create mismatches between bank cash and P&L earnings.

• FX losses — If the transaction was in a foreign currency, you may lose on exchange rate changes between the original booking and the dispute resolution.
  
  

A $10,000 river cruise booking charged in euros at $1.10 may be worth $9,090 USD at the time of booking. Six months later, when the dispute is decided, if the exchange rate is $1.05, your refund may cost you an extra $476 in FX loss and this is even before accounting for fees.

4. Prevention is better than cure

Winning chargebacks is possible, but prevention is far more cost-effective. Key steps include:

Clear contracts and documentation

• Include full cancellation policies, delivery terms, and refund timeframes in the client’s confirmation.

• For hotels, ensure all OTA listings match the property’s real offering as often misleading photos are a dispute magnet.
  
  

Real-time communication

• Update clients immediately on itinerary or service changes. A surprise at check-in is more likely to lead to a dispute than a change advised weeks in advance.
  
  

Secure payment systems

• Use PCI-compliant gateways that support 3D Secure 2.0, which can shift liability away from you in cases of fraud.

• For high-risk bookings, especially one-way tickets or last-minute reservations, consider additional ID verification.
  
  
  

5. Managing disputes like a Pro

If a chargeback does land on your desk, you have a narrow window to respond which is typically 7 to 14 days. To improve win rates:

• Maintain booking logs with client names, travel dates, and proof of service (check-in slips, boarding passes, signed waivers).

• For cruise or tour bookings, retain supplier confirmations showing the guest travelled.

• File all correspondence — emails and messages can demonstrate that the client was informed and agreed to any changes.
  
  

According to Chargebacks911, agencies and hotels that maintain structured dispute files achieve up to 40% higher win rates than those who only respond ad hoc.

6. Building Chargeback-Resilient Payment Models

The upcoming Antravia white paper will explore in depth how payment architecture can reduce chargeback risk. Early findings show that:

• Merchant of Record (MoR) models tend to have better dispute control because they centralize payment handling.

• Split payment flows between agent and supplier create blind spots where neither party can fully prove delivery.

• Hotels and agencies that reconcile daily and match card transaction IDs to booking IDs can respond faster and more successfully.
  
  

7. When to fight and when to walk away

Not every dispute is worth pursuing. In some cases, the cost of evidence gathering outweighs the disputed amount. However, you should always track:

• Chargeback reason codes

• Win/loss ratio

• Total annual cost (fees + lost revenue + admin time)
  
  

This data should be reviewed quarterly as part of your accounting and risk management process. If a specific route, supplier, or booking channel produces a disproportionate share of disputes, it’s time to adjust your sales strategy.

Final Word

Chargebacks are not just a customer service issue, as these impact your financial controls. Agencies and hotels that treat them as part of their broader accounting and payment strategy, rather than isolated events, not only protect revenue but also build credibility with banks, processors, and clients.

The travel sector’s high exposure makes mastering chargeback prevention and management a core business skill. At Antravia, we help travel companies design systems that integrate payment security, clear contractual terms, and real-time financial tracking, reducing dispute rates and improving win outcomes.

Our forthcoming white paper on payment control in travel will provide even deeper analysis, including real-world dispute case studies and sector benchmarks. For now, if your agency or hotel is seeing more chargebacks than you would like, it’s time to treat them as a strategic priority especially before they become a profit leak you can’t plug.

References for - Chargebacks in Travel: How Agents and Hotels Can Protect Their Revenue

1. CLIA – 2024 Global Cruise Passenger Data
   “A record-setting 34.6 million ocean-going cruise passengers sailed globally in 2024, a 9 percent increase over 2023.”
   Source: Travel Weekly – https://travelweekly.co.uk/news/travel-agents-and-airlines-experience-surge-in-chargebacks
   Source: CLIA – https://cruising.org/resources/2024-global-source-passenger-market-report
   

2. Verifi – Chargeback Rates by Industry
   Travel and hospitality saw average chargeback rates of around 0.89 percent.
   Source: SwipeSum – https://www.swipesum.com/insights/chargeback-rate-by-industry-and-business-type
   

3. Chargeflow – 2025 Industry Chargeback Trends
   Travel and hospitality chargeback rates surged 816 percent (from 0.1 percent in 2023 to 0.916 percent in 2024), with average dispute cost per case around $450.
   Source: Chargeflow – https://www.chargeflow.io/blog/chargeback-statistics-trends-costs-solutions
   

4. Chargeback Gurus – Consumer Behavior Insights
   Nearly 60 percent of consumers admitted to filing a chargeback without contacting the merchant first. Average handling cost per chargeback: $25–$30.
   Source: Chargeback Gurus – https://www.chargebackgurus.com/blog/the-impact-of-chargebacks-on-the-travel-and-hospitality-industry
   

5. Wikipedia – Global Merchant Chargeback Outcomes
   Only 21 percent of chargebacks result in decisions favoring the merchant. Merchants dispute only around 60 percent of chargebacks, with a 41 percent win rate for those disputed.
   Source: Wikipedia – https://en.wikipedia.org/wiki/Chargeback
   

6. Chargebacks911 – Cruise Chargebacks
   Explains the unique chargeback risks for cruise operators and how a “no-refund” policy may not be enough to prevent disputes.
   Source: Chargebacks911 – https://chargebacks911.com/cruise-chargeback