Consumer financing: The ultimate companion for your online travel business.

Oct 04 2019 | PayPal editorial staff

Although travel can be expensive, people today are making it a priority and managing their budgets accordingly. In response, many travel businesses are offering consumer financing, allowing travelers to pay for purchases over time. Just like a solid packing list ensures you're ready for whatever adventures come your way while on vacation, following the checklist below helps ensure your travel business is prepared to take advantage of this opportunity to boost online sales and build customer loyalty.

Seize the opportunity that comes with a growing online travel industry. 

Today's travelers have the world at their fingertips—literally. Nearly 50% have booked and paid for at least part of a trip using their smartphone.1 With mobile technology leading the way, the global online travel market is expected to nearly double between 2017 and 2023, reaching $1.1 trillion in online sales.2

And we're not just talking about booking hotels and airfare; experiences are booming, too. The global tours and activities sector is growing faster than the overall travel market3 and is expected to hit $183 billion this year.4

Beyond these sectors, dozens of sub-categories, from rideshare services to pet-sitting apps to “smart luggage," have emerged to make travel convenient and enjoyable for the masses. The bottom line: there's no shortage of opportunities for online travel businesses to take advantage of consumers' desire to book adventures online.

Discover why travelers love being able to pay over time.

There's no way around it—vacations are expensive, especially for travelers with a family in tow. Still, consumers are making trips a top priority. Today, 74% of Americans put experiences ahead of products or things.5 With travel at the heart of these experiences, it's a common way for all generations to spend their disposable income. In fact, 57% of Americans say they're currently saving money for a trip.5 As a result, many online travel businesses are offering consumer financing as a payment option, allowing customers to book trips, activities, and other travel services online and pay for them over time.

Explore how consumer financing can help grow sales for online travel businesses.

As one of the largest providers of consumer financing, PayPal Credit6 has insights from over 135,000 travel businesses on how they are using consumer financing.

For starters, consumer financing can be an easy way for travel businesses to boost online sales by letting customers travel now and pay over time. PayPal Credit customers spend 1.6 times more on travel purchases than the average PayPal customer.7 What's more, the PayPal Credit average order value (AOV) is 1.5 times higher for travel businesses who promote PayPal Credit with a message or button on their online store than those who do not.8

Understand what travel means to Millennial and Gen Z consumers.

Millennials love to travel and are likely to spend more than other age groups on a travel experience. In fact, one in three are willing to spend $5,000 or more on a vacation.That's why it's also no surprise travelers in their 20s and 30s are more likely to take advantage of consumer financing. When Millennials use PayPal Credit to pay for travel purchases, AOV is 227% higher than what the average PayPal customer in this age group spends.10 Similarly, Gen Z PayPal Credit customers spend 119% more on travel purchases than the generation's average PayPal customer.10

Reach your final destination—higher sales and loyal customers.

Travel now, pay over time is a perfect companion for consumers who are eager to explore the world. It's also a great fit for online travel businesses looking to turn customers into repeat shoppers. When an online store extends the convenience of consumer financing, customers may be more likely to come back the next time they catch the travel bug. In fact, nearly 60% of customers who pay with PayPal Credit make three or more travel purchases per year.11 Businesses that take advantage of opportunities to help these shoppers reach their final destinations faster and more frequently embark on their own journeys toward higher sales.

The content of this article is provided for informational purposes only. You should always obtain independent business, tax, financial, and legal advice before making any business decision.

1 Travelport. Travelers say technology is key to their travel experience. November 13, 2018.
2 Market Research Future. Online Travel Market Research Report – Global Forecast to 2023. March 2019.
3 Phocuswright. Escaping the Sidelines: Tours & Activities Get Going. August 2018.
4 Phocuswright. The In-Destination Experience: Why We Travel. April 2018.
5 Expedia. Generations on the Move. January 2018.
6 PayPal Credit is subject to consumer credit approval.
7 Average order value of PayPal Credit transactions vs. PayPal transactions using 2018 PayPal internal data among travel retailers.
8 Average order value of PayPal Credit transactions with a PayPal Credit button and/or message vs. those without using 2018 PayPal internal data among travel retailers.
9 Travelport. U.S. Millennials Most Likely to Take & Spend More on Vacations This Year, Next. May 17, 2018.
10 Average order value of PayPal Credit transactions vs. PayPal transactions using 2018 PayPal internal data among travel retailers. Millennials defined as born between 1981 and 1997. Gen Z defined as born between 1998 and 2001.
11 Based on PayPal's analysis of 2018 internal data for travel industry businesses.

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