Banking giants are launching online travel platforms to leverage pent-up travel demand in the United States
The demand for travel-related activities has surged significantly in the United States, after plunging substantially over the last two years amid the global pandemic outbreak. The ongoing vaccination efforts along with the slowdown in the Covid-19 infection rate have accelerated the travel demand. With consumer willingness to travel domestically and internationally, many players in the online travel segment have ramped up their offerings to drive the growth of their business amid pent-up travel demand.
Looking to leverage this pent-up travel demand among Americans, banking giants are launching new online travel platforms in the United States. For instance,
- In August 2022, Citi, an American multinational investment bank, announced the launch of a new online travel booking platform. Notably, the online platform allows travelers to buy travel with Citi ThankYou points and cash. Launched in partnership with Booking.com, the Citi Travel platform will be managed by Booking.com. The Citi Travel platform will replace its current booking platform, which is operated by another provider and is available for booking only until the end of 2022. The platform will allow travelers to book flights, hotels, and car rentals. For every booking made through the platform, travelers will earn bonus points, which can be redeemed during future reservations.
- In May 2022, Chase, another consumer banking firm, announced that the firm is planning to launch a travel platform, ChaseTravel.com. Notably, the launch of the travel platform is part of the firm’s strategy to capitalize on the projected growth in the travel sector over the next few years. The ChaseTravel.com platform is exclusive to 66 million Chase cardholders and banking customers. The launch of the platform will be backed by its acquisitions of travel loyalty and rewards service provider cxLoyalty and luxury and corporate travel agency Frosch.
Notably, a number of other banking institutions have also made a move into the travel sector during the pandemic outbreak. For instance,
- In October 2021, Capital One re-launched its travel site and acquired firms such as Freebird and Lola. Furthermore, Capital One also invested in the online travel booking platform Hooper in 2021. Bancorp, another banking institution in the United States, acquired TravelBank, a travel platform backed by Will Smith, for US$200 million in November 2021.
This growing interest from banking institutions in the online travel sector shows that these players are looking to control their own destinies rather than relying on third-party travel agencies to boost their credit card transaction volume and value.
Amid the growing demand for travel among Americans, which is expected to further accelerate over the next few years, travel platforms are also entering into strategic collaborations to further improve value offering for travelers in the United States. For instance,
- In September 2022, Amadeus, the travel platform, announced that the firm had entered into a strategic alliance with Uplift, a travel-focused buy now pay later provider. Notably, the strategic collaboration comes at a time when more consumers are demanding flexible payment options for their travel-related activities. Through the strategic partnership, Amadeus will bring the BNPL payment option to its Xchange Payment Platform, which is used by travel firms and airlines. This collaboration is expected to assist merchant partners of Amadeus to drive booking volumes and growth from the short to medium-term perspective.
With all of these banking institutions entering the online travel booking segment, PayNXT360 expects the competition to further intensify over the next three to four years. Furthermore, PayNXT360 expects pure-play online travel booking platforms to innovate with their product and service offerings from the short to medium-term perspective to provide more value for their customers in the United States.
Amid the pent-up travel demand in the United States and in other countries across the world, PayNXT360 expects more banking institutions to launch their own travel platforms over the next three to four years. This will subsequently accelerate the growth of the online travel industry from the short to medium-term perspective.
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