The pandemic has changed consumer behavior in several ways, helping to fuel scattered experiments with subscription-based travel products. Hotel groups, car rental brands, tour operators, upgrade services, lifestyle membership clubs, and other travel companies are testing whether people are willing to treat travel like a Netflix or HelloFresh account, where temporary, on-demand access is more appealing than paying full prices upfront.
Exhibit A is CitizenM, the Amsterdam-based brand with 21 properties worldwide that debuted this month two subscription plans.
Its “global passport” offers travelers the chance to buy a block of nightly stays at any property at a discounted rate of $50 (€50) a night. Stays must last between 7 and 30 consecutive nights, and travelers must apply to be one of the roughly 1,000 participants.
CitizenM’s new corporate subscription offers flexible use of hotel facilities beyond the guest rooms. A business traveler can work in any lobby, reserve a meeting room, or stay for three nights with breakfast at any of the brand’s properties for $600 (€500) a month, or through a discounted annual pass.
The moves by CitizenM bring to mind one of Skift’s megatrends in 2020, namely, that subscription travel would be the next frontier of loyalty. The pandemic has hurt travel company revenues, prompting some to experiment with new models.
Skift looked earlier this month at brands like Inspirato and BeRightBack that aim to be like a Netflix of travel, with everything included. But hybrid and partial subscription models are more common.
Car Rental by Subscription
A case in point is car rental agency Sixt, which has a fleet of more than 280,000 vehicles worldwide. Sixt noticed this year that more consumers were taking longer trips as part of a broader extended-stay trend. So the company introduced this month in the UK and U.S. an all-inclusive, monthly car rental subscription called Sixt Plus.
Flat monthly payments cover car-related costs, such as liability insurance, tax, theft protection, and routine wear and tear. Consumers rent vehicles at rates starting at $459 a month in the U.S. and $512 (£399) a month in the UK.
Sixt’s move suggest a growing confidence in the subscription concept. The German-based company debuted in June subscriptions for customers in its home market, with rates as little at $409 (€348) a month. In August, executives forecast Sixt would generate up to 1 million subscription contracts worldwide over the next decade.
Tour Packages Bought by Fixed Payments
Tour operator Trafalgar said this week it had took a halfway step toward selling 2021 trips via subscription. The brand, owned by The Travel Corporation, has begun offering loans for travel packages next year that consumers can begin paying now in installments.
Trafalgar is using Uplift, the travel financial services startup, to add a “pay monthly” option for trips for customers departing the U.S. and costing at least $300. Customers make a downpayment of one-twelfth of the price and then pay off the rest in 11 installments. While not a standard subscription model, the concept helps test consumer appetites for paying for trips in monthly installments. Uplift said more than 300,000 consumers had bought trips through its installment loans across several travel brands.
Subscriptions for Co-Living
Hotel and co-working startup Selina rolled out in August a few subscription that make it simpler for remote workers to book extended stays at its properties.
One subscription, called Nomad Passport, lets travelers buy 30-, 60- or 90-night credits at discounted rates. Another, called Selina CoLive, lets digital nomads stay at any Selina property for a one-, three- or six-month stay. A corporate program lets companies buy passes for their workers. Each plan covers a seat in the co-working area at each property.
Subscriptions for Luxury Travel for Less
Manifest, a luxury lifestyle club, offers subscribers access to a list of getaway packages from cities in the southwest U.S. to domestic destinations via private planes.
The luxury lifestyle club lets up to 175 people in a handful of cities (Los Angeles, Denver, San Jose, Santa Barbara, San Diego, and Phoenix) pay an annual fee for access to custom trips.
“We hadn’t planned on opening Santa Barbara, San Diego, and Phoenix until January, but demand exceeded our expectations,” said Jeff Potter, the Manifest CEO and the former CEO of Surf Air, Exclusive Resorts, and Frontier Airlines. “We are planning to launch in other markets including Texas, Southeast, Northeast, as well.”
Manifest began accepting memberships this month. The yearly subscription is $2,500 a year. The dues let a customer take three guests with themself on a journey that’s priced separately at “preferred rates.” The company groups departures to get buying power for private planes and luxury properties.
“Everything in the itinerary is planned for, from the time you’re picked up to go to the private airport terminal to your return,” Potter said. “We’re making accessible rare indulgences like private aviation via an all-inclusive price.”
Travel Advisors by Subscription
Consumers who want help planning their travel during a pandemic can now buy an annual subscription for access to a “wellness travel advisor” from the service MyLifeWell.
The subscriptions, which debuted this month, come in different levels, starting at $299 a year, and cover a travel agent’s customization and booking of your wellness-themed trip based on your interests and guidance on how to travel safely during the pandemic.
Subscription Access to Hotel Deals and Upgrades
Upgrade Pack puts a twist on the subscription model with business-to-business plays.
In one model, London-based Upgrade Pack cuts deals with corporate clients, such as banks and credit card issuers who give its mobile app as a perk to selected customers.
The model makes Upgrade Pack free-to-play for airlines and hotels. More than 50 airlines and 1,300 hotel companies have engaged to provide upgrade inventory directly.
“We say engaged, rather than signed up, when it comes to our airline and hotel partners because we’re not selling to them,” said Louise Naqvi, head of marketing. “We don’t charge partners anything for being part of the platform.”
In another model, it has corporations give the app to their workers at one flat annual fee per employee. The business travelers can find their airline and hotel reservations through the app and request upgrades through it.
Meanwhile, Bidroom, a hotel booking platform based in Amsterdam, attempts to stand apart from traditional online travel agencies by being a cheaper distribution and booking channel for hotels. The startup doesn’t charge hotels a commission, which major online travel agencies usually charge in a range from 10 percent to 25 percent. Bidroom instead charges hotels an annual membership fee on a sliding scale based on how much revenue it delivers.
Once the pandemic hit, Bidroom waived all membership fees for hotels. That move helped it grow its total inventory of participating properties this year by 35 percent, said Michael Ros, CEO and co-founder.
Major chains such as Wyndham have recently joined. Bookings go through Bidroom rather than affiliate programs.
Bidroom charges consumers a $29 annual membership fee to receive access to hotel discounts of up to 25 percent compared with major online travel agencies. It has acquired travelers through partnerships, such as with Visa, the bank card issuer that offers Bidroom’s services as a perk to many of its cardholders.
“We’ve also added more value, meaning other benefits, to the membership during these months to increase retention,” Ros said. New discounted add-ons include tours and activities, car rentals, airport transportation, luggage storage, visa applications, co-working space, gym access, and private medical care. An example is a 15 percent discount voucher for use at a major car rental brand.
Similar subscriptions for access to travel discounts include eDreams Odigeo with its Prime product and MakeMyTrip with its DoubleBlack loyalty program. Those brands have extended the length of coverage for members who haven’t been able to travel in the past six months.
For examples of pure-play travel subscriptions, read Subscription Travel Models Offer Encouraging Pandemic Resilience to Inspirato and BeRightBack.
Photo Credit: A guest works at a CitizenM property in London. CitizenM
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More Momentum Building on Subscription Services in Travel, Will it Help Post-Pandemic? - Skift
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