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At Money 2020, YouLend joined forces with Booking.com to delve into the innovations in travel financial products. The discussion was packed with insights from Jakob Pethick, CCO at YouLend and Christel Karsten, Director of Fintech Strategy at Booking.com, who highlighted the company's FinTech Unit and its mission to streamline financial products for travelers and hotel partners.
Key Highlights
💡 Reducing Financial Friction for Hotel Partners
Booking.com’s FinTech Unit has been pivotal in addressing the challenges of travel payments. Their research has revealed that hotels often struggle with cash flow despite having access to traditional bank financing, which is typically limited to instruments like mortgage loans. Securing working capital financing is particularly challenging due to the lengthy process and extensive documentation required. Smaller boutique or home properties are frequently seen as high-risk due to their seasonal business nature, making it even harder to obtain necessary funds.
💡 YouLend and Booking.com Partnership
Booking.com's collaboration with YouLend aims to address seasonality and cash flow challenges faced by hotel partners. With the partnership currently in the UK, early feedback is promising. Hotels have appreciated the quick application process and flexible repayment options tied to seasonal revenue flows. This collaboration exemplifies how embedded finance can provide tailored solutions for specific industry needs, with success stories from the partnership so far:
Small B&B in Devon: A small, owner-operated B&B in Devon, with part-time employees and an annual turnover of approximately £200,000, needed financing to refurbish their kitchen area. This upgrade allowed them to open a public-facing café, enhancing their service offerings and increasing their revenue potential.
Multi-Site Owner in Manchester: A multi-site owner managing 20 rooms across Manchester and nearby areas, with an annual turnover of around £500,000, required financing to cover payroll before the high season. Many bookings were paid on arrival, creating a cash flow gap that needed bridging to ensure smooth operations and staff retention.
💡 Looking Ahead
Booking.com plans to expand the reach and integration of these financial products, leveraging data and insights for a smoother application journey. Meanwhile, YouLend is focused on refining core offerings and exploring new markets to support diverse sectors with innovation in our products including offering both fixed and variable repayment options to better cater to the unique financial needs of our partners.
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