EDITOR'S COMMENT
• It is an interesting time for the distribution market as Airbnb, Booking, Expedia and Hopper compete for bookings and host acquisition, and that space is set to get even more fragmented when JP Morgan launches its own full service travel agency.
The global investment bank and financial services company is not new to travel - the firm has participated in numerous transactions and advised on IPOs - but JP Morgan is now taking a different direction into the market.
In recent months, JP Morgan Chase [the consumer and commercial banking business of the company] has been increasingly aggressive in its acquisition strategy to strengthen its new travel arm, namely the Frosch luxury travel agency, a booking system and a restaurant review company. It will also launch a new website to entice even more customers.
Similarly to Booking.com and Hopper, JP Morgan is seeking to control the entire shopping and purchasing experience and it sees travel as the perfect route to go down to capture the entire spend of the trip, including accommodation and car rentals, excursions and more. After Hopper went down the 'homes' route in January, JP Morgan will now consider expanding the network of brands with which it partners to drive loyalty, from hotel behemoths to a range of short-term rental brands and extended stay options.
Loyalty and rewards are key motivators behind JP Morgan's decision to broaden its offering in travel. The firm wants to convert travel customers into "lifetime" members of its Chase rewards programme so they ultimately spend more money with the bank, and Chase can provide highly targeted offers to fend off competition from other large credit card issuers.
As JP Morgan says it can capture $15 billion in bookings by 2025 to become the third largest global travel agent, it's clear we are on the verge of a major shake-up the distribution market.
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