So far the company is making good on its plans to innovate the corporate travel space. But offering refunds on this scale is a big promise to make.
The travel management company has now released a product called FlexiPerk, which allows users to cancel and get a refund on any booking made through the service, for any reason. This marks a break from the rest of the corporate travel industry, where changes to travel plans typically cost significant amounts of money either in changeable booking prices or cancellation fees.
“We wanted to provide a service that solves one of the biggest pain points in business travel, which is the lack of flexibility when it comes to cancellations and travel changes,” said Avi Meir, TravelPerk’s CEO.
The new product is an opt-in service, available to TravelPerk users. There is a 10 percent fee for all bookings made with a FlexiPerk account, but it gives travelers the option to cancel at nearly any time and receive 90 percent of the total payment back. Typically, businesses that want to change travel plans have to pay inflated “flexi-fares,” or else deal with a tedious cancellation process.
Providing they have not yet checked in, users can cancel flights up to two hours before departure, and they can cancel hotel reservations until 4 pm of the first day of their stay.
The product has been in testing with a number of different companies, which have reported average savings of 26 percent from using the service, according to TravelPerk. The product has not yet been officially rolled out, but starting Thursday, companies that wish to use the service can sign onto a wait list.
There are not many examples of travel companies that offer a similarly flexible cancellation and refund policy, though they do exist. India’s online travel booker MakeMyTrip has a Double Black loyalty program, which charges members an annual fee and offers full refunds for bookings made on the site.
The main reason these services are so rare is that they can expose a travel management company to financial risk. TravelPerk is only now in a position to offer this product because it has spent the past several years gathering data on when and why travelers cancel bookings, according to CEO Meir.
Since TravelPerk’s launch in 2015, the company has focused on improving its user experience and expanding its booking inventory, with the aim of getting close to 100 percent of a company’s bookings to happen through the TravelPerk site.
The more travelers that choose to use TravelPerk, the more data the company can collect, which gives TravelPerk insights into what variables can help predict cancellations. Coupled with machine learning, this data has allowed the company to develop a method of pricing the service in a way that makes sense financially.
“That’s why we needed to wait four years before we built this product,” Meir said. “We needed to collect enough data to build this model that predicts cancellations accurately enough. If you don’t have this data, and you don’t have the machine learning technology, then I think it’s very difficult to build something where you can price it in a reasonable manner.”
That being said, Meir acknowledged the product was not developed as a revenue generator, but as a way to drive loyalty. Companies that want to use the FlexiPerk service must first have accounts with TravelPerk.
“Loyalty and repeat bookings are supposed to increase, not revenue,” Meir said. “It’s supposed to make our travelers happier and in consequence prevent companies from churning.”
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Photo credit: TravelPerk is now offering a service to allow corporate travelers to receive full refunds for cancelled bookings. 182031