93/ Save Now, Travel Later
Everyone loves to travel. But an experience of a week or two can translate into months or even years of credit card debt. There is, however, another way to head offshore. Andrew Katzwinkel’s FOMO Travel offers a “save now, travel later” option that kills credit and the regret that comes from paying off debt.
People travel for different reasons. Some believe it “broadens the mind”. Others want to get away from it all. But the fly-now-pay-later approach can turn the experience sour, says FOMO Travel founder, Andrew Katzwinkel. The tourism entrepreneur knows all about travel debt – it is the reason he’s pioneered a savenow-and-travel-later solution.
“I had the personal pain point,” Katzwinkel says. “I couldn’t afford a holiday, so I put it on credit. I loved the holiday, but returned under a dark cloud. With the salary I was getting, it took over a year and a half to pay back the debt. I was paying hectic interest and had to say ‘no’ to a lot of other great experiences.”
Katzwinkel adds that he spent a long time kicking himself for not saving for the trip ahead of time.
FOMO stands for “fear of missing out”, an emotion that many people who’ve had travel debt – like Katzwinkel – can relate to.
He admits that he finds it difficult to save. “There is so much I like to spend my money on.” After researching the travel market, Katzwinkel came up with the idea of a service that encourages saving and rewards the saving with travel.
Users sign up to FOMO Travel and enter into a payment plan before embarking on a desired journey. It is basically a travel lay-by system. “Travel must be paid for upfront,” Katzwinkel says, and points to the problem with credit. “Why should you start paying interest on something before you even go on your travels? Sometimes more than nine months before?”
Tourism and travel is one of the world’s largest industries, according to global statistics portal Statista, which calculates that the industry contributed over $7.6 trillion to the global economy in 2016.
“The market is huge – from 18-year-olds to pensioners. Although 18- to 24-yearolds can’t always travel on credit, it’s great for them to go abroad. It exposes the youth to different cultures and is an important development phase for young individuals,” Katzwinkel adds.
“A FOMO Travel customer commits to paying a certain amount on a monthly basis. As the instalments are paid in, the money is put in an escrow account, which is secure and audited. You lock in the holiday today, and commit to the payments over a period,” he says.
Katzwinkel adds that FOMO Travel basically helps travellers create an advance payment plan for a debt-free holiday. When payment has been made in full, FOMO Travel pays the supplier and issues documentation.
He understands that sometimes life gets in the way, so FOMO has lenient cancellation terms. “Unfortunately the deposit is usually non-refundable, as we have to pay that over to the supplier in order to lock in the accommodation. But depending on advance notice, one can cancel or change up to 12 weeks prior to departure.”
FOMO Travel was launched in November 2016, after a year of research and establishing relationships with affiliates in the industry, such as hotel groups, tour groups and other travel agents. The response, Katzwinkel says, was “overwhelming” and the company has had to scale fast.
In March, FOMO joined the Singer Group, forming a partnership with Embassy Travel and Amazing Holidays. Through this partnership, Katzwinkel says that FOMO can offer world-class service at competitive prices.
Katzwinkel says that 12,000 people have already signed up to the service and FOMO Travel processed 100 bookings in the first six months of business. (A booking could be a family or a group.)
In a market burdened with debt, FOMO Travel, a service that teaches people to save for luxuries, is just the ticket.