Subscriptions are now a part of almost every industry, including TV and tacos. Even services exist that allow subscribers to cancel their subscriptions. One industry, however, has been particularly slow: travel.
This could be changing.
The market for travel subscriptions is expanding and now includes low-cost flights, airport lounges and luxury accommodations as well as high-end credit cards.
Amy Konary, vice-president at the Subscribed Institute By Zuora, which is a think tank focusing on the subscription economy, says that subscription models can provide a lot more predictability in an industry that can be quite unpredictable.
Most travel purchases are transactional and one-off. Loyalty and benefits programs for airlines and hotels are meant to encourage loyalty, but only travelers who travel a lot (and pay a lot) can reap the rewards. This concept could be flipped by subscriptions, which offer these benefits in advance.
Konary states, “The subscription model allows you to get access to these premium perks by directly paying,” Konary said.
This idea will be embraced by customers. Travel companies are eager to find out.
SUBSCRIPTIONS ARE OFFICIALLY AVAILABLE
Alaska Airlines tried to enter the subscription market in March by launching its ” Fly Pass” service. For $49 per month, subscribers will be able to book one round-trip main seat flight for just one penny and $15 in fees. But here’s the catch: The catch?
Confused?
“Communication was the biggest challenge,” Alex Corey, Alaska Airlines’ managing director of product and business development, says. It’s been difficult for people to see that it might not be right for them. If my favorite store didn’t satisfy my needs, I would be like, “Hey, make it this way.”
Alaska’s subscription is not trying to be all things for all travelers. Instead, it focuses on a small niche: young Californians who have a lot of wanderlust and can adjust their schedules. According to Alaska, less than half of the subscribers are either Generation Zers or millennials.
Although it’s a niche product Alaska believes that it will appeal to certain types of West Coast travelers.
“Californians are 3.5 times more likely to travel within their state than residents from other states,” says Corey. This is why the airline selected California as its proving ground.
Alaska focuses on the lowest cost entry point, with a $49 per month starting to make a flight subscription affordable to nearly everyone.
Corey states, “We wanted to compete against an Uber ride or a tab.”
CATERING TO NOMADS
The luxury travel platform Inspirato, on the other end of the price spectrum offers a subscription service starting at $2,500 per monthly for vacation rentals and high-end hotel rooms.
This is $30,000 per annum for the chance to book luxury accommodations all over the globe. Although it might seem expensive for vacations, this is possible to make your travel budget more affordable for remote workers who want to travel the world as much as they can.
However, Inspirato’s subscription comes with many caveats and exceptions. Pass holders can only book one trip at once, and bookings are made on a first come, first served basis. Many rooms and homes are not available during peak seasons.
Selina is a subscription service for co-living and coworking that bundles the costs of accommodation, office space, and reliable Wi-Fi into a single monthly bill. It’s a great option for less-spent digital nomads. Subscribers have the option to bounce between Selina’s international destinations and enjoy surfing lessons, yoga classes, and other wellness activities.
Potential customers have one advantage that these services provide: simplicity. Instead of searching through hundreds upon hundreds of vacation rental listings online, subscribers only need to pay one monthly fee and can choose from a variety of verified options.
Konary warns that simplicity is not enough. Konary says consumers are wary about adding another month to their already long list of active subscriptions. They need to be sure they are getting a good deal.
Konary states, “As we become more familiarized with these models we have a high standard for what we expect in value.”
WHAT’S OLD IS NEW AGAIN
Subscribe to travel subscriptions. JetBlue Airways introduced the “All You Can Jet” unlimited flight pass in 2009, and it is still popular. Although the promotion was well-received, it didn’t result in a sustainable business model.
Existing subscription services for travel are already a success. For a fee, premium travel credit cards provide perks for travelers like airport lounge access. Clear and TSA PreCheck allow flyers to bypass the normal security lines.
A new wave of subscriptions will be available for travel, but with one major difference: specificity. New services offer niche offerings that cater to specific groups, rather than trying to be the Netflix for travel.
Some people don’t want to travel within California every month, or learn how to surf in Belize at a coworking place. These subscriptions can be a great way to travel, but they don’t have to be complicated. They could also consider MoviePass.
Corey states, “I think what we are doing is unique.” “I hope it’s successful.”
