Fintech to Help Smaller Hotel Brands Like Selina Launch Rewards Cards

Large hotel chains have long used co-branded payment cards. But smaller hospitality brands can now create payment cards to boost guest loyalty. The arrival of financial technology, or fintech, startups — which are more flexible than traditional banks — is bridging the gap.

Selina, a chain of more than 130 premium hostels and hotels, has begun trialing a Selina Visa Card. Large banks have rarely bothered with hoteliers that small. But neo-bank Imprint was eager to work with the company.

“About 20 percent of our customers will visit Selina again within a year,” said Elad Nir, chief marketing officer. “We wanted a tool to further engage with our community.”

Selina belongs to a wave of companies seeking to compete with the incumbent hotel giants. Names include Casai, CitizenM, Generator, Graduate Hotels, Life House, Limehome, Loge, Numa, Placemakr, Proper, Sonder, and The Guild — none of which offer a rewards card today.

Selina plans to go public this year by merging with a blank check company in an expected $1.2 billion deal. Given that transaction and a spate of hotel openings, the company doesn’t expect to fully roll out its loyalty card marketing to all properties until the end of the year at the earliest.

A Rewards Card Aimed at Gen Z and Millennials

Selina mainly caters to customers in their twenties and thirties. So it opted for a debit card instead of a credit card. That let it avoid the credit checks, lofty interest rates, and fees that might otherwise deter early-career customers.

The cards — built by Imprint and issued by First Electronic Bank — offer a $25 sign-up reward and generate points for purchases. They apply points by default to future Selina bookings by syncing with Selina’s two-year-old loyalty program. Plus the card offers 5 percent cash back on Selina stays.

The company sees it as an additional marketing tool.

“When we’re opening a new location, we can let the first week only be bookable by people using our rewards card,” Nir said. “It generates great FOMO [fear of missing out]. We want to manage the community using our rewards card by offering exclusive promotions, newsletter content, and events.”

The company praised how Imprint’s cloud-based product syncs with Selina’s operational systems, such as its customer relationship management software from Salesforce and its revenue management (or rate-setting) software from Duetto. The aspiration is to build a single record for each customer no matter which system the customer interacts with, whether it’s a call center, a marketing campaign, or a rewards card.

Broader Opportunity for Rising Hospitality Brands

Smaller hotel groups tend to have smaller-sized staffs for managing loyalty and marketing programs, especially as they emerge from the pandemic. But Imprint claimed that its service is adequately lightweight.

“A neobank can do all of the financial services products that an American Express or a Citibank when it partners with a travel brand,” Murphy said. “We can often launch in under a month.”

Imprint claimed that hotels with as few as 10 locations could benefit from having a rewards card as long as there’s at least about a fifth of the customers are repeat users.

The Selina hasn’t fully tested its card in the wild, so the verdict is still out.

But it seems plausible that a wave of fintechs could challenge incumbent banks when it comes to travel rewards cards — echoing “the financialization of travel” that was one of Skift’s travel megatrends of 2020.

“Big banks traditionally don’t build the greatest consumer-facing technology,” said Daragh Murphy, co-founder and CEO of Imprint.

“That’s a real pain point for smaller hotel brands to stand up a program with a legacy bank,” Murphy said. “Their tech is usually older. So it may not plug in well with your loyalty program. The consumer experience may also be janky, for lack of a better term.”