The Vacation Industry Needs FinTech Companies With Deep Vertical Expertise

Today’s sharing economy and its respective business models are disrupting traditional industries like financial services and manufacturing and of course, creating brand new categories. And similar to most industries, the vacation industry has certainly not been immune to change. This particular market has faced some unique challenges throughout its evolution and it is interesting to dive a bit deeper to understand the drivers of change and predict how the industry will evolve in the coming years.

One of the most multi-faceted challenges the vacation industry and its respective companies have faced is how to evolve to meet the demands of two very different generations – baby boomers and millennials. Despite their contrasting mindsets and behaviors, the two most populous generations in the US (both around 69 million people, respectively) both love to travel, and they both wield a significant amount of influence.

Baby boomers, now free of their family responsibilities and set with a lifetime of savings, are avid travelers. According to AARP, 99% of boomers will travel for leisure this year and of that number, 50% will choose their destination based on cultural value.

About 30-40 years their junior, millennials are their own generation. They are obviously younger in age, digitally savvy, live on smartphones, demand good value for what they buy and would rather spend money on life experiences than acquiring material goods. They value and prefer the opinions of their peers and do not trust long-standing institutions (aka big banks), nor do they adhere to the way things have always been done.

Although they have very palpable differences in mindsets and behaviors, both generations are similar in their love for travel.

Let’s take a closer look at some key characteristics for each generation:

Defining the Baby Boomer Traveler

For boomers, it’s all about creating an experience.

  • They’re interested in checking items off their bucket list.
  • They enjoy shared experiences, often bringing their family and friends on vacation.
  • When it comes to travel, the cost is often not a determining factor for them.
  • They want to be able to book spontaneous weekend getaways.
  • They’re not exceptionally savvy at using technology, but they’re not afraid of it.
Defining the Millennial Traveler

As one of today’s most prominent consumer groups, millennials are not always the easiest customers to please:

  • They buy and lease goods differently than their parents did.
  • They demand and expect transparency.
  • They take the word of peer reviews over anything we could say about our own companies.
  • They want it all served up with a side of authenticity.
  • They expect a unique experience.
  • They expect that they will get more for their money.
The Vacation Rentals Marketplace

Despite some initial trust issues surrounding the notion of renting private homes to and from strangers, the speed with which companies like HomeAway and Airbnb have become credible and accepted ways for many millennials to travel is nothing short of astonishing. Growing from the size of a single San Francisco apartment in 2007 to an estimated value of 25.5 billion in 2015, the Airbnb phenomenon highlights the dissatisfaction of many millennials with traditional vacation models. And it makes it quite clear that bringing more power to the consumer is an irreversible trend.

According to a study by Elite Daily and Future Workplace:

  • Only 1% of millennials are influenced by advertising when it comes to trusting a brand.
  • A full 43% of millennials rank authenticity above content.

In other words, these young consumers prefer to read about your business somewhere other than from your own site.

Potential travel customers will reject properties based on negative opinions, and they will make their bookings based on favorable experiences – period. The vacation industry’s sharing economy means millennials can feel certain when they’re making a booking, and it’s this level of certainty that must carry over to the industry’s FinTech solutions.

The Challenge for the Vacation Industry

With over 150M people, with two very different ages and lifestyles, wanting to travel and use your product/service, the vacation industry and its respective companies and startups have both a significant opportunity and major challenge to make them both happy. And that is where FinTech comes in. Today’s FinTech companies have the same opportunity – to partner with vacation industry companies to develop, build and offer products and services that will meet the very different demands of these two generations.

Partnership opportunity

Long gone are the days when we visited a travel agent to help us choose our travel accommodations. When booking engines like Expedia and Travelocity emerged in the mid-1990s, vacationers were finally able to start saving time, saving money and avoiding inconvenience by booking their trips online.

With the technological shift, of course, came the customer review. Travelers could describe their actual experiences instead of vacationers having to rely on word of mouth. This began to figure prominently in the vacation buying process. No longer were consumers beholden to one-sided information from questionable hoteliers or indifferent travel agents: we had access to the real experiences, true opinions, and revealing photographs of other vacationers.

Those in the vacation industry had to adopt an entirely different approach – one that focused on customer service. It was also the beginning of businesses realizing how beneficial partnering could be.

The Rise of Mobile Technologies and Partnerships

Vacation industry companies and FinTech companies have been rapidly building and developing technologies designed to meet the specific needs of the vacation industry, its respective businesses and the desires of its travelers.

The response has been varied, pretty obviously, along generational lines.

  • Baby boomers are more resistant to paying through virtual means, citing horror stories and issues. You can’t say they don’t have a point.
  • Millennials expect that they will be able to pay through virtual means – they don’t like traditional payment methods.
  • Vacation Industries have to reach both of these polar opposite approaches.

To quell the fears of the baby boomers, tech companies have focused on security and fighting fraud. By adding sophisticated risk management systems and processes to onboarding and back-end processing, companies like YapStone can differentiate themselves by taking 100% or a sizable portion of the risk involved with processed payments, offering travelers, property owners, property managers and marketplaces alike the protection they demand.

Millennials take security for granted; for them, making online purchases is all about having the most enjoyable process. To accommodate this demographic, technology has been focused on creating easy-to-navigate, comprehensive platforms for users to make the most informed vacation decisions (in record time!).

With nearly 50 million adults using a mobile device to book their travel last year alone, the FinTech industry is having to step up to the plate in more ways than one. Today’s businesses need a trustworthy payment solutions provider, but they also need the advanced technology that makes it possible to meet the needs of customers across the mobile platform.

Travel and vacation marketplaces need to partner with FinTech companies with the deep vertical expertise to serve these diverse customer groups with functionality such as the ability to efficiently and cost-effectively process high ticket transactions, auto-onboard individual property owners and large property managers, offer expedited and check-in payments, split payments and global alternative payment methods.

Travel and vacation businesses are increasing bookings, conversion and generating superior financial returns by partnering with FinTech companies like YapStone that have this expertise. After all, the vacation industry is changing because of technology, so it makes sense that a healthy symbiotic relationship would form that benefits both parties.


Pleasing both the millennial and baby boomer demographics is no easy feat, but the vacation industry is making strides with partners that have deep vertical expertise. At the end of the day, it’s all about innovating the right technologies that are not only trustworthy, secure, and user-friendly for the baby boomers, but also provide a unique online buying experience, supported by unbiased data and customer reviews to delight the millennial audience. Customer collaboration will play a key role in the evolution of the vacation industry; successful companies will constantly listen to their customers, integrate feedback, and never stop learning in real-time.