Five years after the start of the pandemic, the global tourism market has roared back to life. Demand for air travel has surpassed pre-pandemic levels, and the industry is celebrating modest year-over-year gains. Travelers are returning — but with a new mindset, balancing a passion for exploration with a more cautious approach to spending.

Yet this impressive recovery masks a growing and increasingly sophisticated threat. Fraud is thriving throughout the global travel ecosystem, with scammers exploiting new loopholes and technologies at an unprecedented pace. The travel industry remains a high-risk target, particularly in the flight and hotel sectors, and the financial and reputational risks for merchants are higher than ever.

In the United States, this dynamic is particularly complex. While more than half of Americans plan to travel more in 2025, they are also planning to scale back on expenses. This shift in consumer behavior is creating new vulnerabilities that make the travel sector an even more attractive target for fraudsters.

Our research, based on a deep analysis of transaction data from travel merchants, has identified several key challenges fueling this fraud epidemic. Lingering consumer behaviors from the pandemic, for instance, have led to ongoing chargeback chaos, as some travelers continue to request refunds or other compensation — sometimes under false pretenses. Loyalty programs, once a core driver of customer retention, have also become a goldmine for fraudsters. With 63 percent of Americans planning to use reward points this year, the liquidity of these points makes them a prime target for sophisticated bots and phishing scams, contributing to an estimated $1 billion to $3 billion in annual global losses. These scams not only lead to significant financial damage but also severely impact brand reputation and customer trust. The inherent high-risk nature of the travel sector also suppresses bank authorization rates, leading to costly false declines that eat into merchant revenue and hurt customer satisfaction.

The fraud landscape is no longer about simple stolen credit cards. Our research shows that fraudsters are now masters of deception, hiding within legitimate booking patterns. Airline ticket transactions, in particular, are getting riskier, with a 14 percent rise in risk year over year. We’ve observed that high-volume periods are especially vulnerable, with fraud threats in August doubling year over year. Fraudsters are 80 percent more likely to book last-minute flights than legitimate customers, betting that the flight will take place before a chargeback can be processed. Phone orders are also a high-risk channel, being 2.5 times riskier than e-commerce transactions and accounting for up to 10 percent of fraud costs despite their smaller revenue share.

In this new era, fraudsters are also employing cunning new schemes. We’ve seen them use “flight obfuscations,” purchasing a low-risk decoy flight alongside a high-risk one to evade detection. We’ve also observed fraudsters purchasing tickets months in advance — a low-risk signal — only to immediately change the flight to a much sooner date, paying the change fee with the same compromised card. Without advanced technology, this second transaction can go unnoticed until it’s too late. The rise of “buy-for-you” (B4U) services on the dark web and encrypted social media channels further complicates the issue. Fraudsters use these services to resell tickets bought with stolen payment information at steep discounts. In a time of economic uncertainty and rising travel costs, this creates a black market for cheap tickets that attracts customers who are aware they are using a non-legitimate service. This further fuels the fraud cycle and puts a strain on the entire industry.

In the hotel sector, fraudsters are similarly targeting high-value opportunities. While luxury five-star hotels are the riskiest, the four-star segment can be an even bigger financial drain, accounting for the highest share of potential fraud costs. This is driven by fraudsters targeting luxury experiences to resell at steeply discounted rates, appealing to value-seeking consumers.

With the stakes this high, travel merchants can no longer afford to rely on outdated, rules-based fraud prevention. A new approach is needed — one that is both dynamic and proactive. Merchants must follow the full customer journey, from pre-planned bookings to last-minute purchases, to gain the full context of each transaction. They must also optimize approvals based on identity; machine learning can be used to accurately gauge risk at the order level. This allows merchants to maximize approvals for good customers while filtering out fraudulent bookings, boosting revenue and customer satisfaction. Finally, merchants can increase efficiency by automating chargebacks, allowing their teams to focus on more strategic and complex disputes.

Travel merchants have done an incredible job recovering from the pandemic. Now, the next frontier is protecting that success. By adopting fraud prevention technology that leverages wide network data and AI-driven insights, they can address these specific issues head-on, ensuring peak sales events are safer and more successful for themselves and their valued customers.