Travel payments continue to shift toward digital wallets, especially among younger travelers. More than half of Gen Z and millennial travelers booked their most recent trip on a mobile device, while a third used a laptop or desktop computer.
In contrast, less than half of Gen Xers booked their last trip via mobile, and only 28% of baby boomers did so. As these cohorts age, digital wallets are expected to play an even greater role in the travel industry.
These generational differences, as captured in a recent study, Rise of the Digital Wallet, from travel platform HTS, extend to other areas of travel shopping as well. While most travelers check at least two websites or apps before making a travel purchase, a quarter of Gen Z respondents reported checking five or more before spending their money.
This presents a challenge for travel companies looking to build customer loyalty. One solution is to offer bonus features to travelers who make payments using a mobile device. Delta, for example, allows travelers to earn additional Delta Sky Miles when they link their loyalty account to a digital wallet. Alaska Airlines has taken it a step further by offering its own digital wallet, which can be used to redeem discounts, as well as gift and credit certificates.
New Ways to Leverage Digital Wallets
Digital wallet usage is expected to double between 2023 and 2028, with projections reaching 1.4 trillion digital wallet transactions worldwide, according to Visa. The travel industry has been adapting to this trend in several ways.
JetBlue has added Venmo as a payment option, a move widely seen as an effort to attract younger travelers. More than a quarter of Venmo’s users are between the ages of 18 to 29. Venmo has also rolled out a feature called Venmo Groups, which allows users to split and manage expenses within the app—especially useful for those sharing costs with friends and family on big-ticket items like travel.
Earlier this month, Club Quarters introduced mobile room keys within digital wallets across all its properties in the U.S. and the UK. Meanwhile, Google Wallet is rolling out the ability to store a U.S. passport on a mobile device, though the TSA still recommends travelers carry their physical passport as well.
