Skift Take
Even if you’re not interested in the Russian travel market, OneTwoTrip’s early traction with what it calls its “travel-as-a-service” design might have inspirational lessons for companies worldwide.
Sean O’Neill, Skift
Travel startup OneTwoTrip’s gamble with a business-to-business service in Russia and Europe might lure companies to check similar products worldwide.
The Moscow-based online travel bureau has established a “travel-as-a-service” solution. This name plays off the appeal of software-as-a-service services that sell access to cloud-based tools and enterprise applications through a membership model. OneTwoTrip’s Forma item lets banks, telecoms, and other companies offer travel to their clients, enabling those consumers to make cashback in their commitment programs and pay in installments. Banks can integrate it into their sites and apps to redeem commitment points on travel.
OneTwoTrip said it has actually registered more than 40 banks and fintech gamers with considerable consumer bases in Russia and Europe, consisting of Rosbank (managed by Societe Generale group), Gazprombank, Austria’s Raiffeisen Bank, Italy’s Unicredit, and the fintech Home Credit based in the Czech Republic.
Forma is basically a white-label travel agency– though if customers require client service on a trip, they speak with branded OneTwoTrip representatives (such as for rebookings and cancellations). Business make a commission on each trip bought via the option. The companies can either keep that cost as an earnings or pass it along to consumers via a cashback reward.
Cumulatively these banks and fintechs have issued more than 50 million travel debit and charge card. They have loyalty programs, incentivizing clients to use their cards for deals to build up points that customers can redeem for different services and products, including travel.
For banks, the advantage is monetizing their existing client bases and preventing needing to do the legwork of making technical and business connections to take a trip business or dealing with customer service issues.
The startup has been offering the service for four years. Forma now accounts for about one-third of OneTwoTrip’s revenue.
Before the pandemic, OneTwoTrip had annual sales of $500 million, though it decreased to reveal the current figures. It stated it had enjoyed a 25 percent substance annual growth in gross product value and a 32 percent growth in net income in between 2017 and 2019.
Banks and Travel Do More Together
Banks, fintech, and travel companies have actually been cutting more deals with each other lately.
Some banks have gone their own way in similar, parallel efforts without the aid of a celebration such as OneTwoTrip. Revolut, a global neo bank or fintech based in London, stated it prepares to release a travel offering.
In the past year, Capital One got Freebird, a business-to-business startup, and has been developing out the sale of some travel services, with a prepared launch of Capital One Travel, powered by Hopper, later on this year. The banking giant led a March $170 million funding round in the travel agency Hopper.
A number of years ago a fintech in Russia called Tinkoff created an online travel bureau by itself.
Mastercard, Unicredit, and Raiffeisen have incorporated numerous travel platforms into their services, and American Express has actually famously constructed its in-house.
Michael Sokolov is handling director for method of OneTwoTrip, revealed here prior to the pandemic. Source: OneTwoTrip.Michael Sokolov, OneTwoTrip’s managing director for strategy, promotes his company’s offering as letting a bank deal cashback to clients who buy travel through them as a marketing incentive to promote the bank’s brand.” What we’re doing is quite complex,” Sokolov said. “We require to incorporate with the partner’s commitment program on the back-end to guarantee a smooth procedure for redeeming reward points, given all suitable taxes, accounting, and redemption guidelines.”
The concept of white-labeled travel agency sales isn’t brand-new, though OneTwoTrip said it had put a few modern spins on it. For several years, airline companies and other business have outsourced the sales of vacation plans, rental automobiles, and other travel to third-party companies. Banks and airlines have actually let clients redeem loyalty points across brand names with tech aid from business like Points.com.
What’s brand-new is that lots of banks and fintech gamers are turning their apps into superapps to motivate consumers to use them for more than simply banking. OneTwoTrip said its service streamlines the supplier outsourcing and industrial challenges for these business. Rather than an affiliate model, OneTwoTrip is the merchant of record and has agents on hand to deal with any issues that might occur to journeys, such as a need for a customer to rebook for various dates.
OneTwoTrip Is a Pandemic Survivor
OneTwoTrip stated that it had actually raised $30 million in main proceeds from equity capital and personal equity financing considering that its launch a decade earlier this month. One key backer has actually been East-West Digital News, a Swedish endeavor firm formerly called Vostok New Ventures. Atomico is another.
< img src="https://skift.com/wp-content/uploads/2021/07/onetwotrip-virtual-card-july-2021-400x269.jpg"alt ="onetwotrip virtual card july 2021 "width ="400"height ="269"/ > An explanation of OneTwoTrip’s new virtual card. Source: OneTwoTrip.”We went through the pandemic without raising any extra capital or getting government help,” Sokolov said. “We recently returned to break-even on an EBDITA (revenues prior to devaluation, interest, and amortization) level.”
The startup, which has 319 full-time employees and professionals, may see more development at the intersection of financing and travel. Last week Reservation Holdings revealed a new Fintech unit that aims to make it possible for travelers to avoid bank and credit card companies’ forex costs.
OneTwoTrip in the previous year has issued 50,000 virtual payment cards that offer cashback and commitment points, with the support of a bank partner. The virtual card is embedded in its app and website, enabling customers to pay with its virtual as an alternative.