A lightbulb moment in an airport business class lounge led Craig Unsworth on a path to providing loyal travellers with discounted upgrades on flights and hotels.

Bill Boyle
Senior Editor

Tell us about your company – how was it founded?

I founded Upgrade Pack, along with Urchana Moudgil, to transform  the way airline and hotel upgrades are attained by the most valued customers and employees of the world’s most innovative companies. I was inspired when I was sat in business class on a flight to New York surrounded by empty seats. I honestly thought to myself, why don’t airlines send out a last-minute email to people on their loyalty plans asking: “Who wants a last-minute half price upgrade to business class?”. But I quickly realised I already knew the answer. Airlines don’t want to cheapen their brand. It was at that point I knew there was a gap in the market for a new loyalty mechanic, while using innovative tech to give airlines and hotels controlled distribution of unsold seats and suites, all without them having to cheapen their brand.

What is your business model?

We operate as a closed marketplace, enabling our clients (banks and credit card issuers) to give their best customers live discounts of around 20-30% on flight and hotel upgrades. We don’t actually take any profit from the transaction; our revenue model is based on a cost-per-user subscription funded by our client for their customer. An important additional aspect of what we offer our clients is the opportunity for additional revenue, through incremental spend on upgrades purchased by their customers using their affiliated bank or credit card. Our travel partners also earn revenue from the sale of premium inventory that would otherwise go unsold.

What’s the technology under the hood?

It’s really simple. Our tech connects directly to APIs of our airline and hotel partners, providing the user with a cost that has a live discount built in. At the same time, we’re able to offer discretion to airlines and hotels because we’re a closed marketplace for members only. What most people don’t know is that there’s little difference between what you’d pay for an economy or premium economy ticket and what a discounted business ticket is selling for. It’s just that most people can’t access them. With Upgrade Pack they can.

 

What sets you apart from the competition?

The market is flooded with last-minute tickets auctions and point-based routes to upgrades that are often a let-down for customers.

With ticket auctions, the customer is unaware of their success until the very last minute and with point-based rewards customers must rely on having a load of points loaded up to secure an instant upgrade. Some of the more customary travel-based rewards being offered – such as lounge access and concierge services – range in quality and actually incur cost for many of the banks that offer them each time their customer uses them. I wanted to avoid all of that with Upgrade Pack. That’s why all costs are fixed and predictable. No other travel reward provides travellers with instant, always-discounted upgrades.

What was your smartest move?

As a tech-based startup, most people are surprised when I say that Upgrade Pack is based in Richmond, in ‘leafy’ South West London. But this was actually a very smart and tactical move we made for the business and employees. Quality of life, fresh air, a reverse commute, and a destination our clients and partners love visiting.

We’re also part of a great burgeoning tech ecosystem with neighbours including PayPal, eBay, Notonthehighstreet, Reed Exhibitions, Haymarket, Sabre and Graze – but in a much more collaborative and neighbourly way than I’d ever felt in the heart of Shoreditch and so on. We also pay half the rent per square foot than we would otherwise have paid – which allowed us to open on day one with an office big enough for our first three years of hiring. It’s made such a difference to be in our own space.

Where did things get tough – what was your biggest setback?

Setbacks so far have been minimal thanks to having a great co-founder, a strong network and a strong investor cap table. The key challenge for us at this point is about achieving scale and speed. We are launching in six countries in 2019, so the immediate challenge is managing our early stages of growth while establishing ourselves in each of those territories – and the requirements by region (particularly when working with financial services clients). Fortunately the above mentioned factors together with a strong board and a growing and talented team means we are in a good position to meet that challenge head on.

Where do you want to be in five years’ time?

We’ve made more progress in six months than most companies would in a couple of years, which I’m extremely proud of. Right now, five years’ time is too far ahead for us to think about, but we’ve a very clear plan for the end of our first, second and third years. We mark our first year of operations in June, and we’re on track to have launched in the UK, US, Canada, Singapore, Hong Kong and Switzerland by then.

What is the most exciting new financial tech you have seen in the last year?

One of the areas that really caught attention during 2018 was the emergence of PaaS among fintechs. While some banks haven’t been able to adapt to the opportunities as fast as they’d like, many are now investing in platform-based models where they can. Platforms help create an ecosystem that integrates customers, partners, services and devices together, meaning all can promote the creation and exchanging of services and all parties can gain value. As PaaS brings more customer choice to the industry, banks will need to differentiate themselves to stay relevant in an increasingly disruptive marketplace. One way for banks to differentiate in 2019 is through their reward programs.

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by IBS Intelligence
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