TravelPerk launches flexible refunds to help businesses save on cancelled trips
Fresh from topping up its Series C with a whopping $60 million, business travel booking platform TravelPerk is launching a new product it hopes will make customers keep singing its praises by shaving further friction off of programming work trips.
The Barcelona-based SaaS startup has been on a mission to make booking business travel suck less since 2015 — bagging around $133 million in VC in the process. It’s now saying it wants to surpass the flexibility and convenience of consumer travel, which is the driving force behind today’s launch, according to co-founder and CEO Avi Meir.
“The offer is actually very simple,” he says. “We want to give business travelers unprecedented flexibility to cancel and get a refund on any booking — hotels, trains, Airbnb, cars and flights — without any hassle.”
TravelPerk’s new feature — called FlexiPerk — lets users cancel all legs and elements of their trip and obtain a full refund, minus a 10% fee added to each booked element (though TravelPerk says 90% is the minimum guaranteed refund; if it can get more it pledges to pass that back to the customer too).
Meir contrasts that with what he says is the typical choice for businesses saddled with legacy travel booking platforms: Paying over the odds for a flexible fare (he claims that on average these cost 60% more than standard fares), or being forced to go through “complex and time-consuming refund processes.”
So, basically, for a tenth of the price of the trip the FlexiPerk promise is full flexibility to cancel — even just a couple of hours prior to when you were supposed to leave.
Although — one restriction — users cannot pick and choose when they want to add a refund buffer to a trip.
Instead they have to sign up for a FlexiPerk contract, which requires seven days written notice to cancel. The contract commits them to paying the 10% fee on every booking component that’s refundable.
So, essentially, the product adds a 10% premium to the price of all booked trips for users not to have to worry if they need to move or cancel some of their travel.
Meir describes the process of getting a refund on a FlexiPerk booking as “super straightforward,” saying users can cancel from the app in just “two clicks.” Refunds are processed automatically by the platform.
“By automatically making every booking refundable, at a fraction of the cost, FlexiPerk solves [the cost vs flexibility] problem for good,” is the grand claim for the product — which TravelPerk also touts as “something no other provider has offered before.”
Though it’s perhaps better thought of as akin to paying for a separate business travel insurance product that will refund you if you need to cancel trips (though the latter likely with restrictions, based on the reasons for cancelling).
TravelPerk also claims there’s no fine print further complicating the product offer. Though there are a few variables to bear in mind, depending on the trip elements booked — so, for instance, you do need to have not already checked into your flight to get the refund.
“You can cancel for any reason up to two hours before your departure, or until you have checked into your flight, hotel stay or car rental,” says Meir. “For hotels, we require that refund requests come before 4 p.m. local time on the first day of the stay.
“There are no limitations to the number of cancellations a traveler can make. As long as you booked a trip as a ‘FlexiPerk Trip,’ you can cancel it. We do limit you to €5,000 per passenger, and €30,000 refund per trip.”
He says the goal is to serve businesses’ needs by removing the rigidity which has characterized legacy business travel booking platforms. And essentially they’re doing that by splitting the costs associated with refunds and cancellations via a universal 10% premium applied to all bookings.
“One of the biggest pain-points for business travel is the lack of flexibility. GBTA/Sabre listed it as the third most influential aspect of booking travel for EMEA travelers. Most of us throughout the company have seen first-hand the stress and expense of unpredictable schedules,” Meir tells TechCrunch.
“Additionally, FlexiPerk is a direct response to our customer’s wants and needs. As we’ve grown, we’ve been able to analyze more and more travel behaviour data, and the high amount of cancelled/rearranged trips (20%) along with the number of ‘Flexi’ fares booked, but never changed, stuck out. That’s where the idea for FlexiPerk came from.”
“Traditional travel has always been anything but flexible,” he adds. “From complex airline fee structures to unfriendly refund policies, the industry is built around the idea that travel plans will stay the same. But that’s just not how business works, particularly in the kind of fast-growing businesses that are our core market.
“Changes or cancellations are often unavoidable in a fast-paced organisation: in fact, our own data tells us that more than 20% of business trips booked are subsequently postponed, rearranged or cancelled.”
Data is key to TravelPerk being able to offer a fully flexible refund product, according to Meir — lots and lots of data fed into machine learning algorithms to determine the pricing structure for FlexiPerk.
“Our strategy has always been to first build the world’s largest business travel one-stop-shop, so that we process every business trip for our customers. Because we have trip data for millions of trips, we’re able to group them together, and to use machine learning to very accurately predict the risk of cancellation or change, while taking each ticket’s cancellation and change conditions/penalties into account.
“FlexiPerk is so significant because it’s only possible to deliver this kind of product if you’re selling literally millions of trips per year, and using machine learning to build an accurate model to price it correctly.”
Based on its own data, TravelPerk says that more than 20% of business trips are subsequently postponed, rearranged or cancelled.
So as its customers weigh up the cost versus benefits of signing up for FlexiPerk, the suggestion is they’ll make savings by paying the small added fee.
Indeed, TravelPerk claims beta customers have seen “significant” savings from using the product — saying on average they’ve saved 26% (versus paying for flexible fares and shelling out for last-minute cancellation fees).
The FlexiPerk product is launching today — as a wait-list for signups to what’s still a beta product.
This follows a period of closed testing with a handful of existing TravelPerk customers, including Sumup and Picnic. In supporting statements in a press release about the launch, the two praised FlexiPerk for saving their businesses time and worry related to travel fees and refund processes.
“Now we can book anything with the peace of mind that we’ll get our money back if plans change,” said Picnic people associate, Elise Baeriswyl. “Using FlexiPerk has meant that we can focus on continued innovation in the financial space, rather than worrying about the cost of changing our travel plans,” added Sumup’s head of ops, Matabato Kimani.
“We’re rolling it out to as many people and markets as fast as we can,” Meir also told us of FlexiPerk’s availability. “We expect to move out of beta later this year.”