Challenger bank Revolut bets on travel rebound

Revolut, which has applied for a banking charter in the United States, has added travel booking to its list of expanding financial services.

The London fintech's customers will be able to use the new service — called Stays — to reserve hotel rooms initially, with bookings of flights, car hires and general travel experiences expected to be added later.

The move puts Revolut in competition with sites such as Booking.com and Expedia. Booking.com recently launched its own fintech business to support payments and other transactions for travel-related products.

Stays debuted Wednesday in the U.K. with plans to expand to the U.S. and other markets in the coming weeks. Revolut is launching the travel service at a challenging time for the sector, with the U.K. and its other core markets experiencing changing travel restrictions due to coronavirus variants. Revolut is adding incentives such as no booking fees and 10% cashback on bookings made through Revolut's app.

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The pandemic-related uncertainty has clouded the economic outlook for financial institutions that rely on travel payments, such as American Express. Companies are continuing to invest in travel payments in anticipation of a rebound, with Wyndham Resorts and Bakkt recently partnering on a travel rewards program that includes bitcoin as an option.

Revolut did not respond to a request for comment. "As the world begins to cautiously open up, we know everyone is desperate to get away whenever they can — whether it’s to Margate or Mallorca," Marsel Nikaj, head of savings and lifestyle at Revolut, said in a news release Wednesday. Revolut reports that in 2019 that its average consumer spent about $800 on accommodations and $300 on flights via the fintech's existing debit card.

Revolut, which has its roots in mobile payments, has been gradually adding financial services over the past several years and partnering with Visa and Mastercard to build an international merchant network. Adding travel booking is part of its "super app" strategy, which refers to fintechs using enrolled payment credentials as a springboard to stack other services — both financial and nonfinancial — on top of payment processing.

The company opened an office in California in 2020 and began the application process for a banker charter in California and federal deposit insurance in March. Revolut has established e-money licenses in several countries, primarily as Brexit hedge to support seamless processing for cross-border payments.