The post-pandemic travel boom is creating a convergence of travel and fintech that investors should pay attention to | Tech US News

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The unprecedented travel demand that marked the first half of 2022 is expected to increase during the fall and winter months. More leisure travelers than ever are booking trips and globetrotting.

In addition, there has been a substantial increase in national and international travel and the formation of a new category of “blended” or “leisure” travel (business and leisure), replacing business travel. Now, people travel on vacation or visit family while simultaneously setting up business meetings, attending professional events and continuing to work remotely, or vice versa. Others make spontaneous decisions to extend a business trip for a weekend stay or invite a partner for a romantic getaway.

“Blissful” or “bleisure” travelers are looking for more security and ways to minimize the impact of travel disruptions. They need a lot of flexibility with cancellations and changes, for example extending or upgrading hotel stays or adding new destinations and travel partners, which creates the perfect environment for the convergence of fintech and the travel industry. This opens up considerable opportunities for investors to get excited about.

Travel and Fintech go hand in hand

The banking industry has long known the benefits of working with the travel industry. For example, JP Morgan recently announced that it is building a huge travel agency and Neobank Revolut now sells travel accommodation.

Since travel customers are now very interested in the high quality and convenience aspects of travel, there are even more ways in which banks, travel agencies and airlines can coordinate to create a better travel experience.

If the financial and travel industries could come to an early agreement on price offers, booking flexibility and bonuses for customers, this could not only streamline existing services but also improve the overall quality of travel, especially as companies specializing in travel have a deep knowledge of the market.

The partnership of travel companies and fintech could add a little to the agreed prices to cover risks for things like canceled flights or other unforeseen circumstances. However, most customers are willing to pay a little more for this service, so both banking and travel profit. Sometimes it might not even cost the traveler extra, especially if they were a long-time customer.

There are already startups taking advantage of the travel banking synergy

This new landscape has already seen several startups enter the scene. Some are new and some have been around for a while and hope to get more funding as the travel boom picks up.

Valencia-based Flywire solves payment challenges for travel companies by offering a one-stop shop to easily receive and manage payments, deliver invoices and statements, and collect commissions from multiple suppliers. Recently, a startup called WeTravel, which offers payments and other tools for the specific needs of group travel, raised $27 million. In addition to travel planning, the startup handles different payment processes, such as installment payments, working with multiple currencies and payment methods, and paying different vendors.

The market is full of investment opportunities

Fintech trends such as open banking, “buy now, pay later” and tokenization also work in favor of investors.

The ability to bring banking technology into the travel industry means that airlines, hotels and travel agencies are willing to invest in fintech products that offer high margins and easy add-ons to increase LTV.

The “buy now, pay later” trend is also very encouraging for the travel market. Flexible and easily accessible credit allows travelers to make higher-value purchases or say yes to upsells.

Many companies have already sprung up at the opportunity presented by the BNPL trend. Some of the most popular providers of this option for certain travel partners are Afterpay, Affirm, Klarna and Uplift. Affirm has partnerships with Delta Vacations, Priceline, StubHub and Alternative Airlines, a flight booking website. Uplift focuses exclusively on providing travel point-of-sale loans, with nearly 200 travel partners including United Airlines, Kayak, Southwest Airlines and Royal Caribbean.

Qantas has launched a ‘fly now, pay later’ partnership with BNPL supplier Zip, allowing customers to book domestic and international flights with installment payments that can also earn them loyalty points for Qantas through Zip’s own loyalty program , Zip Rewards.

The BNPL trend presents a great opportunity for business development. Investors who can connect with travel companies that prioritize responsible lending strategies are likely to be successful.

Finally, the post-pandemic world now expects frictionless payment for everything. Fintech companies that can offer simple payment solutions such as tokenization, last-mile digitization, and merchant-initiated transactions have enormous growth potential for the foreseeable future.

The confluence of fintech and travel means optimal investment conditions

With the post-pandemic travel boom continuing to grow, the travel industry and all of its ancillary industries are working overtime to manage the demands and deliver the level of travel experience that customers now demand.

Growing demand and the intensifying convergence of fintech and travel means there is an unprecedented number of innovations on the horizon, making this the perfect time for investors to start looking at the emerging companies coming to meet the needs of returning travelers.

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