Consumers demanding financial services from travel providers
Appetite among consumers to take out financial services from the travel and hospitality brands they love is taking off, according to new research from Solaris in conjunction with YouGov and the Handelsblatt Research Institute. The ‘World of opportunities: embedded finance services boost the tourism industry’ study compiled the views of 2020 consumers in Europe.
The research set out to discover consumer attitudes to taking out financial services from well-known travel brands, especially when travelling.
The study found overwhelmingly that one in five consumers (20%) can imagine using financial services from a major travel platform or leading hotel chain. In the travel sector specifically, customer confidence was particularly behind travel agent TUI, with 74% of consumers saying they would use financial services from the brand, just ahead of Booking.com (71%) and Trivago (60%). Half of consumers also stated they would approve of using such services from online accommodation booking website Airbnb, with 31% saying they would use an Airbnb credit card.
When analysing additional features that providers could integrate, demand was highest for health insurance, with 43% of consumers selecting this ahead of travel cancellation insurance (42%) and 31% citing motor insurance abroad.
Jörg Diewald, chief commercial officer at Solaris commented: “For both travel providers and booking platforms, offering financial services can be an attractive tool for growing their customer relationships – inbound data from financial products enables continuous improvement. They can deepen customer relationships, simplify transactions through seamless integration of financial processing, and open up new business areas. We are talking about billions of customers who can be addressed very well by the respective providers as the intended target group.”
When it came to assessing how credit cards are used by consumers when travelling abroad, 38% declared them as their preferred payment method, with the highest usage among 35 – 44-year-olds at 39%. Although the use of digital wallets continues to grow, physical credit cards remain the payment tool of choice at checkout, being used by 76% of people domestically but rising to 85% of people when travelling abroad.
56% of all respondents would like to see additional features such as cashback or bonus points for rewards as well as upgrades integrated into financial services from travel platforms and hotel chains. Cashback from international retailers (ALDI, LIDL, Albert Heijn) is particularly popular, and 37% would use it.
For many brands from the tourism industry, this is very good, because the interaction with the physical credit card is always a reminder of the respective brand. This creates a defining impression of the trustworthiness of a brand that offers a co-branded credit card.
26% indicated that the ability to receive multiple products from one brand is a key factor for further use of such digital products.
