Commentary

Can Paying Over Time Change The Travel Landscape?

Is there a substantial contingent of travelers who would choose to take a trip if they could pay it off over a specific period of time at a consistent rate? More, are there people who would spend more if they had a similar opportunity? A company called Uplift thinks so and believes that its Uplift Pay Monthly tool will drive significant incremental travel and travel spending.

The team running Uplift is impressive, headed by Brian Barth, co-founder of SideStep, which became the first travel metasearch platform way back in 1999. Uplift allows consumers to buy airline tickets and other travel products and spread payments over time, giving them access to trips they might not otherwise have been able to afford. 

On the industry side, the company claims that its solution helps suppliers drive marketing metrics, including incremental bookings, improved conversion, higher booking value, channel loyalty and ancillary. Uplift Pay Monthly is now available to consumers booking online with United Airlines, JetBlue, Southwest Airlines, American Airlines Vacations, Lufthansa and many others.

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Barth said the solution provides for 12 fixed monthly payments at low interest rates and allows consumers to pay with their favorite co-branded credit cards, earning points and miles just as they ordinarily would. He said that for a large chunk of potential users, the interest payments come to about 5% more than the cost of the trip. It can go quite a bit higher but Barth claims Uplift offers as inexpensive a loan as the average individual can get.

Using Uplift seems simple enough. At a certain point in the booking process on a partner site, consumers are offered the Uplift option. If they choose it, they enter information like their mobile number and the last four digits of their Social Security number; in some cases, they are asked for income levels. Within seconds, they know if they’ve been approved for a loan. Purchasers review their payment plan details, agree to the terms and then complete their purchase on the travel provider’s site. Customers can borrow between $500 and $15,000 per trip.

Barth said because of its data and technology, Uplift can approve customers “well down the credit spectrum.” He said about 40% of customers would not be able to afford the trip without Uplift; about 30% are more likely to take the trip because of the tool; and the remainder would have been able to afford the trip but spend more because of the plan.

How should marketers look at a pay-over-time option? Big question: Do you want to participate in a plan like this? Uplift says that it pays its partners upfront and keeps them on the supplier site without toggling back and forth so there seems to be little downside. Another question: Do you have to change your messaging when marketing to a demographic that might have been out of reach before?

Many investors think Uplift is onto something. The company recently announced that it had expanded its lending capacity to $200 million and closed financing of $90 million, including from Erik Blachford, former CEO of Expedia, who said the product would change the way consumers book and pay for travel. 

That’s a big promise. Barth points out that this is the way consumers buy cars, furniture and other big-ticket items. “People get it,” he said; “in fact, we have learned that we need to do less explanation than we expected.”

1 comment about "Can Paying Over Time Change The Travel Landscape?".
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  1. Ron Kurtz from American Affluence Research Center, May 21, 2018 at 5:01 p.m.

    Great business idea if the loan default rate is well controlled. Should be very attractive to many consumers (especially milennials), particularly for cruises and all-inclusive resorts. 

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