Travelkoin

THE PROBLEM

PAYMENT

The travel industry is one of the most fragmented industries in the global market space. Unless it is
domestic travel, it almost always requires complex and expensive cross-border financial transactions
involving various counterparties. Multiple levels of transaction fees and middlemen cut significantly into
all travel suppliers’ bottom line.
All the largest travel suppliers in the world use a select few payment providers. They are very
expensive and entrenched in the industry. Companies just use them because “they are there”. They
charge annual fees ($150K / year) and transaction fees. Suppliers easily see 2 – 10% of the bottom line
go to transaction fees. 30 years ago, these companies were the best solution. This is no longer the case.
Our industry transacts to the tune of 7.8 trillion dollars per year and growing. Airlines, hotels and other
suppliers pay up to 780 billion dollars in fees. Airlines have to hold the risk of future bookings up to
45 days. Hotels working with OTAs have a similar problem. Because transactions are expensive, OTAs
and other suppliers try to keep costs low and extend payment terms. One supplier might make another
supplier wait 90 days before receiving payment. This is particularly hard for smaller suppliers without
much liquidity.
Payment is a B2B issue and it’s industry-wide. Talking to any travel supplier about this problem will give
you another use case and another reason for why the current system needs a fix.

LOYALTY PROGRAM

Another problem the industry faces is customer retention. Customers are unhappy with loyalty
programs. The programs are unclear, hold little value and expire long before they add actual benefits to
the regular traveler. Travel suppliers benefit tremendously from loyalty programs but customers aren’t
reaping any rewards. 99% of regular travelers will never benefit from these programs. They are only being
told they are never good enough over and over again.

Loyalty programs are doomed to fail every time because they do not have the best interest of their
customers in mind. 69% of users are unhappy with their loyalty program after one year and the average
person has at least 5 memberships to travel related companies and an average of 25 loyalty programs per
household. Why is this? It’s because companies treat loyalty programs as an afterthought instead of the
massive mobilizer it could be.
If you think about the membership cards you have in your pocket... what actual value do they give you if
you were to use all those earned points right now? Would you know how to calculate that value? Would
you know how many of those points had already expired? How quickly and easily would it be for you to
convert those point to real value? How close are you to reaching the target number of points required
before you actually get something of value? If you are a frequent traveler, how often do you find yourself
picking a route just because you don’t want your points or status to expire? There might be faster or
cheaper routes but you choose the one just because your need the points to keep the status quo. When
you finally have enough points racked up, how many rules and regulations and hoops do you have to
jump through to be able to use them to your liking?
Loyalty programs have been created to maximize company profits. It’s that simple.