Risk Rundown:
Travel

Current fraud landscape

Five years post-pandemic and the global tourism market has made an impressive recovery. Demand for air travel surpassed pandemic levels by 2024, and travel globally is continuing to see modest gains YoY. According to the American Express 2025 Global Travel Trends Report, travelers across the globe are approaching trips with a mix of passion and practicality.

In the United States, however, things are getting more complicated. While more than half (56%) of Americans plan to travel more in 2025 than they did in 2024, they plan to scale back the expenses. And the US is projected to lose 12 billion dollars in travel revenue for 2025, due in part to a decline in international visitors.

Meanwhile, fraud is thriving everywhere in the global travel ecosystem: scammers continue to find new loopholes and schemes to take advantage of industry vulnerabilities and outdated technology. Travel remains a high-risk industry for fraud — particularly the flights and hotels sectors — with financial, operational, and reputational implications for travel merchants.

Key challenges

To conduct this industry analysis, Riskified’s research team examined transaction data from travel merchants, including those providing flights (such as airlines and online travel agencies (OTAs), hotels, bus and train transportation, and car rentals.

• Global expansion: New routes and accommodation locations bring in new travellers with localized purchase behaviors that impact payments and fraud detection.
• Chargeback chaos: Old habits are hard to break, including those consumers learned during the pandemic to receive compensation for cancelled travel plans, sometimes under false pretenses. Those lingering expectations and behaviors continue to create chargeback headaches for travel merchants.
• The loyalty dilemma: Travelers love their reward points, with 63% of Americans planning to use points to travel this year. But fraudsters also like loyalty programs, thanks to the liquidity of points and the varied and easy ways to cash out.
• Low bank authorization rates: The travel sector’s high risk exposure suppresses authorization rates, leading to false declines that eat into merchant revenue and customer satisfaction.

On the radar: Top trends

Riskified’s research team has identified increases and received reports of these fraud tactics targeting travel merchants, including:

Fake OTAs

Fraudulent OTAs, also known as “buy-for-you” (B4U) services, are fake business domains managed by dark web professional fraudsters widely available across social media platforms. Using stolen credit cards or loyalty points, by abusing coupons, or via other illicit means, these services make bookings on behalf of legitimate customers, who in turn, pay far less than market value. Scammers pocket the payments, and travel merchants lose revenue since these otherwise legitimate customers are paying a lot less for the tickets as a result.

EVIDENCE OF “B4U” SERVICES ON THE DARK WEB

Loyalty points theft

Travel points are a goldmine for fraudsters and a frequent topic of chatter on fraud-related corners of the dark web. Reward point fraud has increased dramatically over the last decade, with many estimates ranging between $1 billion and $3 billion in global fraud losses annually. Loyalty account credentials, including username and password combinations, are readily leaked online, often for just a few dollars. Fraudsters use bots and phishing scams to efficiently hack accounts at scale and empty them of points or miles, which they sell for cash, redeem for gift cards, use B4U schemes or transfer the miles out to an account that they own to use for personal travel.

Risk trends

This section examines the common yet distinct risks Riskified sees within segments of travel transactions, providing insights into how fraudsters exploit the high-value markets.

Flights and hotels exhibit a substantially higher risk profile compared to traditional physical goods industries and other digital products. Land transportation is the least risky subsector of travel, but it is still riskier than most industries.

Flight bookings

INDUSTRY RISKINESS COMPARISON

Based on Riskified’s analysis of travel transaction data through 2024, airline ticket transactions are getting riskier, with flight bookings seeing a +14% rise in risk YoY.

Further insights based on Riskified’s analysis:

• Fraud threats doubled YoY in the month of August, making it both one of the top travel months and the riskiest for bookings.
• High-volume months are prone to higher fraudulent activity, as fraudsters aim to get lost in the high-season crowds.
• Last-minute transactions (booked within a week of departure) are consistently riskier compared to plan-ahead orders. A fraudster is 80% more likely to buy a last-minute ticket than a good customer, likely because they know vendors are in a rush to fill upcoming flights. Last-minute bookings also decrease the chance of a chargeback submission before the flight departure.
• Phone orders are 2.5x riskier compared to the ecommerce and m-commerce flight purchases. Although phone orders represent a smaller share of revenue, they can drive up to 10% of fraud costs.
• International flights are a lucrative target for fraudsters in part because their average order value is nearly 3.5x higher than tickets for domestic flights. For airlines, this means the wrong decision on an international flight payment can have an outsized impact.

INTERNATIONAL DEPARTURE BY RISK LEVELS

High-flying fraud MOs

• Flight obfuscations: In this scheme, fraudsters purchase two flights in one order, one with a high-risk profile and the other with a low-risk profile (usually avoiding geo mismatches) as a decoy to silence vendor alarm bells.
• Post-purchase flight reschedules: Fraudsters purchase tickets months in advance (advance purchases are typically characterized as less risky) and then immediately change the booking to a much sooner flight date, paying the change fee with the same compromised credit card they used for the initial booking. Without technology to correlate the fee payment to the new flight, the second transaction can escape scrutiny, and the fraud would often go undetected until after the flight has already occurred. (Often, when the cardholder receives their credit card statement and files a chargeback.)

Hotel bookings

Riskified research exposes how fraudsters target luxury hotels, looking for high-quality experiences with high demand:

While 5-star hotels are the riskiest, the 4-star segment can be a bigger profit drain. Four-star hotels are riskier by +20% compared to other categories and comprise the highest share of potential fraud costs.

HOTEL RATINGS POTENTIAL EFFECT ON RISK LEVELS

Why the emphasis on luxury? The average travel consumer seeks the best value, maximizing quality while minimizing cost. This makes luxury hotels, which prioritize customer experience and satisfaction, an attractive target for dark web sellers, who see greater opportunities to offer steeply discounted rates for these high-end experiences.

EVIDENCE OF DARK WEB SELLERS TARGETING LUXURY HOTELS

Land transportation bookings

June to August are traditionally the peak season for train and bus bookings, with volume higher by about +30% compared to the rest of the year. Fraudsters, who aim to mimic legitimate buying behavior, double the fraud attempts during these busy months, making July and August +40% riskier for fraud.

Proven strategies

Automate chargebacks

Applying automation to some or all of the travel booking chargeback management process increases efficiency more effectively than any other action. Automation can be applied in a tiered strategy, such that lower-value or more straightforward chargebacks can be automated, while more complex, sensitive, and higher-value cases can be handled with the expertise of agents. Automation also frees teams to focus on more strategic and challenging disputes that might have previously gone uncontested.

Follow the full journey

A typical consumer’s summer holiday or business trip can involve multiple vendors across multiple borders, and travel merchants need data visibility across the entire journey to properly assess risk. Context is essential, from pre-planned, advance bookings of flight and train tickets to more ‘suspicious’ last-minute purchases.

Optimize approvals with identity-based solutions

Travel merchants can counter low bank authorization rates by maximizing approvals. Leverage intelligent automation and machine learning to accurately address risk and calibrate friction order-by-order and within the context of the whole journey to maximize profitability and customer satisfaction. Use detailed market intelligence or a network to link orders and more easily distinguish between trustworthy travelers and abusive bad actors.

Riskified’s dynamic technology examines patterns at a network-wide scale. By using machine learning to gauge which checkout pathway is right for each booking’s risk level — whether to authorize, decline, or judiciously deploy additional verification where it’s absolutely necessary — travel merchants can more precisely filter out bad orders and maximize good bookings.

Partner with Riskified

Riskified works with more than 50 leading merchants and OTAs in the travel industry and processes roughly half a billion travel transactions each year. Travel merchants trust Riskified to manage the high fraud risk of their industry and drive growth.

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