Revolut’s new super app, ‘Stays’, could threaten the profitability of leading travel brands across Europe and the US, says GlobalData. The leading data and analytics company notes that the app has beat leading brands in the move towards end-to-end booking solutions, which comes right at home with travel-hungry customers looking for deals online.
British-based digital banking app Revolut’s new service allows users to book travel accommodation and receive up to 10% in cashback. It is Revolut’s first non-financial or insurance product launch.
Johanna Bonhill-Smith, Travel & Tourism Analyst at GlobalData, comments: “Revolut’s app allows travelers to book accommodation ranging from B&Bs to luxury lodges, as well as offering payment end solutions and currency exchange rates without fees. The online travel space is dominated by large industry brands such as Booking Holdings, Expedia Group and TripAdvisor. Booking Holdings has been working towards its end-to-end booking solution as a ‘connected trip’ for some time but it has not yet come to fruition. Revolut may have seized a market opportunity at the right time.”
Stays is part of Revolut’s wider goal to help users spend “more smartly” when travelling, it said. It comes as coronavirus travel restrictions start to ease in some regions. Revolut is what’s known as a “super app,” which offers multiple services through one interface. The trend has gained traction in Asia, popularized by companies like Grab and GoTo in Southeast Asia and Alibaba and Tencent in China.
“After 18 months of endless restrictions and lockdowns, we want to give people more and make their money travel further,” said Marsel Nikaj, head of savings and lifestyle at Revolut.
Various factors are likely to aid the app’s success, with the most important factor being the high demand for travel. GlobalData’s Poll found that demand is highest for domestic trips (43%) in 2021. However, travelling to a different continent (37%) and other countries in the same continent (29%) is also high.
Even though international travel restrictions threaten international travel’s recovery in 2021, the domestic market will continue to prosper. Since the app covers all market bases, this is not likely to interfere with Revolut’s popularity.
Revolut gained popularity with travellers in its early days by offering cheaper and easier foreign exchange services than mainstream banks
Bonhill-Smith continues: “Revolut already has a large existing customer base. It currently has 16 million global users and was recently valued at $33bn in its last funding round, demonstrating its competitive stance within the marketplace.”
After booking through ‘Stays’, customers will be awarded up to 10% cashback. Price and value currently play the largest role in booking hotel/accommodation for 47% of respondents, according to a survey by GlobalData. Therefore, any form of saving and ‘value for money’ will be welcomed by consumers, and could make booking through Revolut more attractive.
Bonhill-Smith adds: “Throughout the pandemic, consumers have been spending more time online. GlobalData’s Q2 2021 consumer survey revealed 35% of respondents are more frequently spending time online and 12% have started doing this over the last three months as a result of the COVID-19 pandemic. This means consumers are more confident in making transactions online and may be more inclined to use a server that holds end-to-end solutions in the booking process, which bodes well for Revolut’s new venture.”