Head at Travelpayouts, the largest affiliate marketing network focused on the travel market.
Since the start of Covid-19, the travel industry has been changing rapidly, adapting to the new reality by developing and expanding various solutions and products. The urge to adapt is real as the industry’s numbers are still recovering after the pandemic. For instance, in 2021, travels during the winter holidays were about half of 2019, but it is slowly recovering in 2022, according to the TSA.
To better meet consumers’ needs, travel companies are cooperating with services from other fields, including fintech solutions. As CEO of a travel company that has done the same, I’d like to go through the advantages and steps of taking this action.
There are now dozens of programs and apps for travelers looking to save money. Airline loyalty programs can be listed as one of the top solutions for saving money. What is more, they are actually genius fintech companies. The mile program cards have been driving customers’ loyalty for years.
For example, during Covid-19 when travel levels dropped, these programs helped validate that airlines had solid business with these loyal customers that can be borrowed against it. It helped them lower their own interest rates and stay afloat.
Developing and integrating fintech services can help diversify travel business.
For example, Air Asia has broadened the scope of its solutions recently by rolling out a financial marketplace that offers a wide range of products like insurance, investments and social fundraising through partnerships with various Indonesian platforms.
Meanwhile, Southeast Asia’s largest travel start-up, Traveloka, partnered with a Thailand bank to provide a “buy now, pay later” service for people in Vietnam and Thailand. The company has also started integrating “pay later” credit cards in Indonesia.
Such solutions are beneficial to its providers as well. Hopper’s CEO, Fred Lalonde, said that, due to fintech solutions, the company managed to double its revenue during the pandemic. Their products have a 52% average attachment rate for flight bookings, which increases to 70% when hotels are included. Lalonde underlines that these fintech solutions created a new spend of around 12% which, if applied to Hopper’s product set, could find a “total unrealized spend of $168 billion.”
Financial services are keeping a close eye on the travel market.
In addition to travel companies offering more fintech solutions, the opposite is true too. Financial services are also expanding to the travel market to offer cross-field services.
In 2021, Revolut launched Revolut Stays, which offers hotels, homes and guest houses in the UK and Europe. Consumers get up to 10% instant cashback on each transaction and travel insurance, which helps Revolut become a multifaceted “super app.”
CNBC called it “a challenge to travel industry giants like Booking Holdings, Expedia and TripAdvisor.”
Fintech solutions help address key customer needs:
1. Flexibility: We’re living in a quickly changing world where each moment counts. Anything that speeds up the purchase, allows you to make a cancellation or refund with ease is crucial, as these features increase user loyalty and help them to remove the barrier of making the first purchase.
2. Price-value ratio: This is of utmost importance, especially with ongoing inflation. Now people pay even more attention to how the price corresponds to the value of a product. It is important to do a thorough analysis of the pricing policy in the market and add new values for the same cost.
3. User-friendly intuitive services: No one wants to spend time reading manuals or figuring out how features work. Any purchase or subscription process should be simple and as fast as possible. If the user encounters difficulty, this deal can collapse.
Find the right partner for your company.
To me, it’s clear that partnership is a key. This way, travel businesses can integrate installment plans in partnership with banks, add loyalty systems and drive additional benefits with fintech. The rules of the new world make users pay more attention to additional benefits. And the integration of financial technologies in travel is a fresh, important trend for the user.
It may be difficult to find a one-size-fits-all when looking for travel brand partners. Ultimately, the individual features the brand offers that you believe your customers will benefit from the most should be your main criteria.
Implement fintech into your travel business.
Giving travelers a solution to these needs proves to be beneficial not only for customers but also to companies. Diversification, especially with fintech solutions, helps businesses stay afloat even when the market is fluctuating due to uncertainties.
Benefit has become almost the main criterion when choosing a product. In addition to the ratio of price and quality, it is important to provide flexible payment systems, implement cashback on purchases, bonuses, and make sure that the product really meets the “profitable” characteristic.
There is an ever greater demand for multi-functional services and user-oriented fintech solutions and the travel industry may need to adapt to keep up with these new trends. Partnerships with brands that embrace fintech focusing on profitability, convenience and speed can be essential to success in today’s travel industry.