Big Banks Chase a Much Bigger Piece of the Travel Market

25.08.2023 - 14:22 / skift.com / Dennis Schaal / Morgan Chase / Ariane Gorin

Big banks are making a bold statement in travel and will increasingly become the first place — at the top of the proverbial trip-planning funnel — where customers look to book their trips.

Depending on your perspective, major online travel agencies such as Expedia Group and Booking Holdings, which often power a piece of the banks’ travel offerings, are at times fueling the growth of formidable competitors at their own peril or are cashing-in on travel demand that they might not otherwise capture.

Both Expedia Group, which generated $788 million, or 21 percent of its total revenue, powering travel for banks, hotels and other partners in the third quarter of 2022, and Booking Holdings, which acquired hotel wholesaler Getaroom in 2021, are making strategic moves to expand their business-to-business partnerships.

Consider developments at JPMorgan Chase, which already counted itself among the top five U.S. consumer travel providers in 2022 on the strength of its travel and rewards programs. Expedia ceased powering flights and cars for JPMorgan Chase in early 2022, but still provides hotels. Ariane Gorin, president of Expedia for Business, said the JPMorgan Chase relationship is still a big partnership for Expedia Group despite recent developments.

JPMorgan Chase acquired luxury and corporate travel agency Frosch in 2022, after buying travel and loyalty company CX Loyalty Group a year earlier. With these deals, JPMorgan Chase now controls the customer experience as a full-service travel agency and has “full ownership economics,” according to Co-CEO of Consumer & Community Banking Marianne Lake. In essence, that means the company can claim the vast majority of commissions, among other factors. 

Lake forecast at an investor day in mid-2022 that Chase Travel would process more than $10 billion in travel volumes in 2023, and would reach $15 billion by 2025, if not sooner. The business was already cash flow positive in 2022 and expected to generate around a 5 percent net margin, she said.

The plan was to launch ChaseTravel.com for cardmembers, and to make it available to customers with Chase bank accounts thereafter. “The business will require little marketing expense as we leverage our existing customers and channels, reinforced by our loyalty program, Ultimate Rewards,” Lake said. 

Just think about that: With 66 million U.S. households and 5 million small business customers in the fold, JP Morgan Chase is looking at the potential of a $15 billion travel business by 2023, and the company envisions needing to spend minimal amounts on marketing.

Using the latest annual numbers available, 2021, for context, that $15 billion in gross bookings would have made Chase Travel nearly one-third the size of the 2021