This spring Chase revealed that they would launch ChaseTravel.com this year. They are still on track and fleshing out more detail about what it will look like.
They’ve expected the product to generate $10 billion of sales in 2023 and $15 billion by 2025, making it the third largest travel agency behind Expedia and Booking.com. Already Chase generates 25% of total leisure travel spend on its cards.
To date Chase has been assembling the pieces,
- Buying cxLoyalty as a booking platform. That service used to run Chase Travel before the move to Expedia. Now, moving back, they’ve got their own platform.
- Buying The Infatuation which also includes Zagat, as a mechanism for offering robust advice to customers. They’re building out hotel recommendations alongside existing dining guides (the latter are actually quite good as far as these things go).
- Acquiring travel agents at Frosch International Travel.
- Launching airport launches in partnership with Collinson (the parent of Priority Pass runs The Club lounges through their Airport Dimensions subsidiary). Known lounges include New York LaGuardia, San Diego, Las Vegas, Phoenix, Boston and Hong Kong but they’re talking up current plans for a total of 9.
Chase sees an opportunity to capture more travel spend, and keep customers in their ecosystem. They see the same opportunity in the home and auto ecosystems. Meanwhile travel booking helps them capture their customers’ travel spend in terms of experience. They’ll capture the booking commissions (which could reach $750 million, not pocket change). And they’ll have even richer data to cross market to their customers – and to rent to other firms.
J.P. Morgan Chase is going up against American Express and now Capital One in the travel portal and lounge business. The problem is that nobody yet does online travel really well. Expedia hasn’t actually gotten better from a consumer standpoint in 20 years. Instead they spend a lot on advertising to bring customers to their site, and they sell those customers to hotels. They don’t actually add value to a customer’s trip, guiding them towards better experiences.
JPMorgan executives say they want to dominate on extravagant itineraries, helping customers book spas, dinners and experiences.
“More people are interested in being inspired right now, saying, ‘I want to have one of those social-media-type moments so tell me where to go,’” said Jason Wynn, the head of the new travel unit.
Travel is complicated and advice is missing. You go online and see schedules and price, or location and property features, but little to tell you whether to take that 45 minute connection in Chicago in winter, whether for your trip you should go out the night before or take the first flight rather than last flight of the day, and what kind of backup options you may have.
Google was supposed to disrupt travel search and booking but that’s been the next big thing in the space for over a decade. Whether or not banks deliver, having more competitors can only benefit consumers.
It’ll be exciting to watch but I remain skeptical because most acquisitions turn out badly and nobody has really done it yet because it’s hard. Chase has the resources but so does Google, and they have the AI programmers and personal data with which to do mass customization and personalization in a really unique way – yet they haven’t managed it (though Google Flights is quite useful). We’ll have a window soon enough.
(HT: @crucker)
