18 Jul Your travel business will take off with a pay-over-time option
The travel industry needs to respond to the shifting demands of its customers, from discovery to check-in. This new generation of travelers requires convenient and mobile-first technology.
Preferred features in this tech setup include alternative payment methods that fit the lifestyles of today’s travelers. Offering a pay-over-time option, like Affirm, will change a consumer’s travel booking behavior and open the door to new, modern customers. Travel merchants may be missing out on a large portion of customers who don’t have access to credit or don’t want traditional credit products.
Affirm’s travel partners, including Orbitz, Expedia, CheapOAir, Priceline, and Fareportal, have seen dramatic results after implementing Affirm. A performance analysis of the of 25 Affirm travel brands during 2018 showed that, after implementing Affirm, businesses saw an average of:
- 90% increase in average order value
- 5% increase in conversion
- 21% 12-month repeat purchase rate
- 80% increase in booking windows
Pay-over-time options provide an opportunity to capitalize on the changing landscape of travel. Below are five ways installment payments can enhance your business.
Millennials dream of international travel and would rather pay for a flight than buy a house. Millennials took an average of 3.5 vacations in 2017, and 35% of them intend to take more vacations this year. The millennial travel market is valued at over $200 billion. But acquiring and maintaining this group as customers will be difficult when a third of them don’t have a credit card, and two-thirds have a strong fear of debt.
Unlock these customers with a modern alternative payment method tailored for the experiences millennial travelers want. By giving them the option to split up expensive travel purchases over time, an option like Affirm can open the doors for people who don’t want to use credit cards.
Become the one-stop shop for all travel purchases
Consumers follow a specific cadence when booking travel: flight first, hotel next, then activities and meals. They tend to buy these items over several weeks while preparing for a vacation. For many travel merchants, the goal is to be the one place where those consumers will eventually buy every aspect of their travel experiences.
Offering a pay-over-time option can encourage consumers to come back to your business for all their travel needs. With Affirm, travelers can be pre-approved and reminded of the amount they are allowed to spend, encouraging repeat purchasing with your brand. They can even continue to add ancillary purchases to their loans for 21 days after an initial purchase.
Spark brand loyalty
The first step in checkout is the most significant drop-out point for customers, usually due to a price concern. The abandon-cart rate for travel sites is 82%. A partnership between your business and Affirm offers a solution to work within a customer’s budget and communicates a customer-first approach.
By offering a pay-over-time option, you are proactively responding to your customer’s needs and creating an engaging touch point. For example, Affirm customers have a higher lifetime value when compared to non-Affirm shoppers, with 21% repurchasing with Affirm. Customers love our simple and transparent process. We only ask for five pieces of information, offer a real-time decision, and have no hidden or late fees. The halo effect from Affirm can produce strong loyalty for your brand.
Break down the price barriers for adding ancillaries
Travel expenses add up quickly, and consumers no longer buy just a single flight or hotel room. They have to purchase a seat, a meal, luggage, and sometimes a balcony room or Wi-Fi. These ancillary purchases drive up the final amount and can be daunting to would-be customers. The thought of paying a premium to upgrade can seem out of the question when all the customer sees is the lump sum at the end.
Offering a pay-over-time option means these upgrades become a few dollars a month instead of an extra $100 at checkout. The better experience becomes more realistic to consumers when they can pay for it over time, increasing average order value and giving your travelers the trips of their dreams.
Increase the booking window
Booking flights and other travel expenses early is a win for both the consumer and the provider. Travelers get a better deal, and businesses are able to more accurately predict their revenue. But it can take time for shoppers to save the funds for an expensive flight. They must spend a few months stockpiling, and by then the price may have doubled or even tripled.
A pay-over-time option allows travelers to buy their flights earlier and pay in smaller installments they can afford over a few months. With Affirm, some merchants report consumers booking 80% further out from their travel date, allowing travel businesses to avoid risk, uncertainty, and having to drop their prices to sell empty seats.
Affirm is modernizing consumer credit and changing the way people book travel, and we can help your business take advantage of these opportunities. We partner with 2200+ retailers and dozens of travel brands to boost their conversion rates and average order values. Our simple and transparent process improves customer satisfaction, driving up repeat purchases and brand loyalty. Through advanced underwriting we reach those overlooked by the traditional credit system. With a lightning-fast, mobile-first UI, we’re built to seamlessly integrate with your checkout flow and make purchasing quicker, simpler, and more consumer-friendly.
Read our travel ebook for more details on the benefits discussed above, as well as a secret shopper survey and testimonials from our travel partners.
Want Affirm on your travel site? Contact firstname.lastname@example.org