Crypto for Business Travel
Although there are many of us within the travel industry who choose to characterize ourselves as technical Luddites, I tend to see things a bit differently – especially on the business travel side. When was the last time you checked your briefcase (ok, backpack) for your agency-issued printed ticket? How many of us are now using virtual payment systems vs. the old plastic charge card?
The next big stretch for those of us in the business travel community (once we get this NDC thing settled) may very well be the acceptance of cryptocurrency. Mark Frary of Business Travel News Europe has an interesting perspective. The following is an excerpt from Mr. Frary’s article:
One of the companies making it possible for travel companies to work with cryptocurrencies is BitPay. Its vice president of marketing Merrick Theobald says accepting crypto is attractive for merchants in the sector.
“The benefits of cryptocurrency are outstanding; there is nothing faster, better or cheaper than digital transactions on the blockchain,” he says. “It can be done in minutes, locally or cross-border, and there are a lot of protections for the merchant. It is a push payment, so there are no fraud chargebacks. That in itself would convince me that if I were a merchant I would offer crypto immediately.”
It is not just merchants that crypto payments appeal to.
“Cryptocurrency has taken off with younger demographics – millennials and Gen Z-ers; they are always on technology and cryptocurrency, being a digital payment, is ideal for them.”
Corporate Traveller entered into a partnership with BitPay in April 2019 to “spearhead cryptocurrency payments in the business travel sector”, becoming the first TMC to accept them.
“The reason we started offering this method of payment was twofold: we saw a gap in the market and in response to a client request,” says Nicola McShane, VP global PR & communications at parent company Flight Centre Group.
Since the company started offering crypto as a payment option, it has generated further expressions of interest from clients.
In July 2022, Kuoni Business Travel announced it would start accepting crypto payments with the company’s Andreas Schneider saying that clients were “becoming increasingly modern and innovative.”
Alternative ambitions
Online travel agent Alternative Airlines began accepting crypto payments in 2018. Sam Argyle, the company’s managing director, says, “Alternative Airlines has always offered a range of payment options at checkout and it felt natural to move into cryptocurrency. We work with three payment partners: Lisbon-based Utrust, owned by Elrond; crypto.com [which is Hong Kong-based and known for its huge spending on Formula 1 advertising]; and CoinGate from Lithuania which specializes in accepting niche coins.”
The company says crypto payments currently account for three per cent of its total order volume and this is growing fast.
“We have some ambitious goals,” says Argyle. “We expect that figure to be close to 30 per cent by 2025. The last few months have been more restrained given the market but we do think long term this is going to grow rapidly as cryptocurrencies become more mainstream and understandable.”
”One of the biggest attractions of cryptocurrency business for the company is that purchases are typically three times the value of transactions made using other payment methods,” says Argyle.
“It tends to be affluent, sophisticated consumers and typically they are buying long-haul, high-yield premium products: business and first class. We also see retention rates that are four times what they are in the rest of the business. This says to us that they are happy with the experience and also that there is a gap in the marketplace for people offering cryptocurrency payments for flights.”
For B2B payments, Argyle thinks it will take longer. “As a business, if we were to hold cryptocurrency to pay other businesses you would need to ask ‘How do we hold it, account for it and transfer it?’ Longer term there will be growing B2B use.”
Suppliers lead the way
Although the TMC take-up has been limited, a growing number of suppliers are joining the crypto party.
Air Baltic became the first airline in the world to accept bitcoin back in 2014. At the end of 2021, the airline said that the number of bookings made using crypto had increased 44 per cent year on year and that more than 1,000 customers had used them as a method of payment.
LOT Polish Airlines started accepting crypto a year later but there hasn’t been a flood of airlines rushing to offer the same payment option. This may be about to change.
In September 2021, BitPay inked a deal with UATP, the global network for air, rail and travel agency payments.
At the time, UATP’s CEO Ralph Kaiser said, “Crypto payment stands to be a market changer in the industry; this partnership creates the opportunity for the airlines to attract new customers and to be a first-mover in this very exciting space.”
BitPay's Theobald said: “We are seeing more and more airlines jumping onboard through the UATP relationship.”
One of the next carriers to join the party through the UATP partnership will be Vueling, which will become the first low-cost airline in Europe to accept cryptocurrencies.
Some private air charter companies have been accepting cryptocurrencies for years, according to Theobald.
“A few of them only accept cryptocurrency if it is after hours or on weekends. They won’t fly you somewhere if they are still waiting for a wire payment to confirm and that could take days. We are also seeing luxury hotels starting to accept cryptocurrencies. We have done exceptionally well with luxury products in general,” says Theobald.
The hotel groups that are doing so are generally high-end leisure properties, such as Pavilion Hotels & Resorts, Soneva and the Kessler Collection. Dubai’s FIVE Hotels started accepting crypto payments when it opened its first property outside the UAE, in Zurich, earlier this year. Others seem certain to follow as the potential for the market is recognized.
Widespread investment
Some reports suggest there are 300 million people holding currency in cryptowallets around the world. There is also an increasing number of companies operating in the sector.
“There are more and more companies getting into cryptocurrency,” says BitPay’s Theobald. “There are hundreds of thousands of them around the world right now and many prefer to pay with cryptocurrency to support the work they are doing.”
Cryptocurrency seems unlikely to replace other forms of payment any time soon, not least since existing methods such as corporate cards and lodge cards are so well established in the sector. Theobald is confident things will change though.
“I don’t see Bitcoin or paying with cryptocurrency replacing credit cards in my lifetime but will it take a hold of the travel industry – absolutely. Checks are still around even though we thought they would be replaced. It is the same thing with credit cards,” he says.
Currently there is around $1.1 trillion in cryptocurrency that is being held by business and recreational travelers. Although we are not quite there yet, we need to keep our thumbs on the pulse of the emerging
Mark Altman
Forte Business Travel Solutions
516-624-0500 x5072
maltman@travelsavers.com
Source: BTN Europe, Business Travel News Europe, https://www.businesstravelnewseurope.com/. Article, Crypto A No-Go? By Mark Frary. Click here for a direct link to the article.
