00:00How is business travel? Has it come back post-pandemic to the extent that we would have liked it to come back?
00:06Yeah, hi. Nice to meet you.
00:09The good news is travel is doing pretty well as an industry.
00:12It's mostly fully recovered since the pandemic.
00:16Business travel is finally reaching its pre-pandemic levels and starting to grow.
00:20Leisure travel has been, you know, it's surpassed the pre-pandemic levels probably in 2023.
00:25So travel outlook is still strong.
00:27I mean, people are still spending on travel despite any lingering concerns in the greater economy.
00:33We just did a survey this year and travelers said they spent just as much as travel on the 2025 holiday season as they did in 2024, for example.
00:44How are people spending? What are they doing?
00:47Is it still the experiences that people are looking for here?
00:51People are spending, I would say, there's probably one trend that is shifting and has really accelerated post-pandemic,
01:01which is people are using their credit card and loyalty programs more and more when they're booking travel.
01:08Obviously, that is partially to offset the cost.
01:10Those things lower the cost.
01:12Our business is really growing around that.
01:14For instance, we power travel rewards and loyalty for probably about 10 banks around the world, including Capital One here in the U.S.,
01:22other banks around the world like Commonwealth Bank of Australia, Nubank in Brazil, the world's largest neobank.
01:28And we're building these like integrated travel rewards and loyalty experiences directly on the banking website or banking app.
01:37So when people are using their credit cards, they can earn and burn points and kind of access all of these great travel products,
01:43like some of which you were showing on your screen.
01:45And that's a trend that's just really accelerated.
01:47Something like 20 percent, 25 percent of online travel in the United States now is being booked directly through a credit card loyalty program.
01:56And that's just like much, much higher than it was maybe 10 years ago.
01:59How much do the banks play into that?
02:01You mentioned banks in Brazil and outside the United States, but how much are customers, you know, booking their travels through banks in the U.S.?
02:10You said 25 percent of travelers, but how would you increase that figure?
02:15Well, I think it's been growing year over year.
02:17It's the fastest growing segment of online travel.
02:19So online travel is growing about 5 to 6 percent year over year, which is about 2x the average GDP growth rate.
02:26And most of that growth is actually coming through this banking credit card loyalty segment.
02:31And there's some simple answers and reasons for that.
02:36Fundamentally, the banks are offering really compelling value propositions and rewards to customers that kind of make these experiences some of the best places to book travel.
02:45All right. So to go back to my new bank example in Brazil, new bank is offering its customers 0 percent APR free installment financing for up to 12 months for all trips booked in new travel.
02:57So that's very compelling.
02:59I think the average APR rate for installment financing in Brazil is 35 percent elsewhere.
03:05So that's a good example.
03:06When you look at Capital One, if you have the Venture X card here in the United States, you can earn 10x points when you book a hotel on Capital One travel.
03:14That's functionally 10 percent back for your next trip.
03:18You know, that makes a difference when travel is such a large category.
03:23Dakota, just in my own household, I think this is part of this is generational.
03:28Like the extent I go to is I have a Chase card that's branded with United because I'm captive to United here in Newark.
03:35OK, so that's about it. My daughter's got 27 different scams going any which way.
03:41She's got it on spreadsheets about points here, points there, what she needs to do.
03:45Is it a younger generation more aggressively, I guess, using points and trying to manage and capitalize on them?
03:54The short answer is yes. I mean, the statistics are pretty clear.
03:57Gen Z is the generation that uses loyalty programs and credit card programs to book travel at the highest clip of any generation by a lot.
04:08Yeah. So how are they doing that? I mean, how do you keep track?
04:12And all these partner airlines and all these, you know, alliances between different airlines and so on.
04:17Does that happen in the hotel industry, too? And, you know, who ultimately benefits from all of this?
04:22I think ultimately the consumer benefits because it's the bank is functionally funding or offsetting the cost of their leisure trips.
04:31You know, the average person is taking four trips per year. It's it's over 10 percent of their total income humans are spending on travel.
04:38So anything to make that more affordable, I think, just benefits the consumer, benefits the economy, benefits the local regions who are receiving the tourism revenue and the tax revenue.
04:48And ultimately it benefits the suppliers. Right. The airlines and hotels, the banks are making it easier for for travelers to go to their hotel and to, you know, book a ticket on their airline.
04:59It is hard to keep track, but I think a lot of people spreadsheet, you know, can afford one or two premium credit cards.
05:07You know, there is a limit to how many of those you can have in your wallet and, you know, just choose the best one.
05:12And it's a it's a great place to book. Are they are the travel is the industry.
05:18Are they embracing this? How do they view it? Is it is it some way to grow their business?
05:25Yes, I think in the United States is furthest along of any country in the world.
05:29You've seen this for years and years. Right.
05:30You can look at the earnings reports of the major airlines in the US and a huge percentage of their their income and especially their profit is related to the loyalty program and selling the points to the co-brand credit card issuing partners.
05:45So that that's a fundamental part of the airline business that keeps it going, keeps it profitable.
05:51Hotels more and more, especially with the large chains, are doing those co-brands and leaning into their points program, too.
05:56So the interoperability between the airline and hotel points programs and the credit card programs is a huge part of that.
06:03And then I would say the US is very far ahead. And then what we're seeing as in our business, we're doing a lot of global partnerships.
06:11We're seeing a lot of other countries have been, you know, a lot of companies in other countries have been tracking what these American credit card issuers are doing, what the American travel suppliers are doing.
06:21And they want to share in some of that success, too.
06:23So they're they're not as far ahead, but that's where we come in and we kind of can bring them the latest technology, the most innovative technology in the space and help them kind of achieve those results in their markets for the first time.
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