Fintech is trending, and likewise for superapps in certain parts of the world. Getting into travel is too delicious to resist, but the world is not ending for incumbent travel competitors.
The UK-based fintech app Revolut, which claims 16 million users, branched out beyond financial services for the first time, and began selling hotels, homes, and guest houses.
The product, available in the UK starting Tuesday with rollouts across Europe and the U.S. on the agenda, comes with a 10 percent cash back offer on each transaction as Revolut becomes the latest multifaceted superapp wannabe.
CNBC, for one, hyped the seriousness of the launch, arguing that “the move marks a challenge to travel industry giants like Booking Holdings, Expedia and TripAdvisor.” Expedia, Booking, Tripadvisor, and Trivago, as well as Hilton and Hyatt, all made substantial share price gains on Tuesday — Revolut notwithstanding.
Investors don’t care about Revolut at this point, nor should they.
Let me be the first to inform you that executives at Booking Holdings, Expedia and Tripadvisor are not closing up shop, and will not toss and turn in their pajamas tonight because the Revolut app now has an accommodations section.
Still, the development is indeed interesting because would-be super apps are emerging, particularly in Asia, and these apps are getting into travel because they see it as a ripe opportunity. While fintech apps are getting into travel, travel companies, from Hopper to Booking Holdings, are trying out fintech.
The same kind of watch-out-Expedia talk came to the fore when Amazon trialed a hotel-booking feature a few years ago, and then scrapped it after a relatively short period. Amazon has made several unsuccessful forays into travel over the years, and currently offers domestic India flights with cash back in partnership with Cleartrip, but no online travel agencies have folded because of this.
Several super apps, including Grab in Singapore, sell travel. Grab sells stays supplied by Booking.com and Agoda, but it hasn’t been a game changer for Grab, which mostly offers transportation, delivery and financial services.
“Agoda and Booking.com certainly supply inventory to Grab and we are happy with the partnership,” Agoda CEO John Brown told Skift, without giving any sales numbers. “Grab is obviously expanding into a lot of areas and we’re happy to explore how we continue to work together.”
As any online travel official or hotels executive will tell you, selling hotels is a complicated business. Revolut is obviously aware that companies such as Booking, Expedia and Tripadvisor have a 20-25 year head start in the hotel business.
Japan’s Rakuten sells plenty of travel with cash back, and Expedia’s new headquarters in Seattle, Washington is still standing.
“As the world begins to cautiously open up, we know everyone is desperate to get away whenever they can — whether it’s to Margate or Mallorca,” said Marsel Nikaj, Revolut’s head of savings and lifestyle, in a statement. “We’ve built Stays to make it easy for people to find and book their perfect break in their ideal destination. After 18 months of endless restrictions and lockdowns, we want to give people more and make their money travel further.”
Revolut has been selling certain travel-related services, including lounge access and travel insurance.
It aspires to eventually launch flights, car rentals and experiences, the company said.
“It’s always exciting to see new players try to shake up the space, and 10 percent cash back seems generous compared to a more standard 5 percent offer, but ultimately this feels in the same vein as other travel-related financial promotions,” said Skift Research’s Seth Borko. “If anything I see the move aimed more at disrupting the market for other financial firms, like Chase and Barclays, than disrupting travel businesses.”
Founded in 2015, Revolut was valued at $33 billion at an $800 million funding round in July that was spearheaded by Softbank’s Vision Fund 2 and Tiger Global Management.
In its blog post, Revolut said it wouldn’t charge its customers booking fees for their travel purchases, but suppliers may do so.
