Is There Untapped Potential in Hospitality Subscriptions?
At first glance, a travel subscription seems like a consumer dream – unlimited travel, discounted travel or travel perks? Where’s the sign-up sheet?
Obviously, leveraging appeal for travel subscriptions is more nuanced than that – especially with an abundance of free-to-join loyalty programs available at nearly every turn for leisure travelers and road warriors.
But the lesser-used model is starting to garner interest across the industry – including in the hospitality sector with programs launching in recent years such as Ennismore’s Dis-loyalty late last year, Citizen M’s mycitizenM+ in 2022 and Inspirato Pass in 2019.
“The surface of paid loyalty for travel has only just been scratched, as it accounts for less than 1% of global sales,” said Mike Putman, CEO of Custom Travel Solutions, a platform focused on loyalty. “The future looks positive, driven by an increased demand for personalized travel experiences and the convenience of having access to recurring benefits.”
But subscriptions have been slow to catch on, according to David Feldman, founder and managing partner of Catchit Loyalty, a strategic solutions firm.
“I would say that there is an increased ‘interest’ from brands in subscription programs or subscription offerings,” said Feldman. “I’m not sure that we have seen that translate into actual more subscriptions live in the marketplace ‘yet.’”
And some say travelers’ lifestyles now leave them more open to a subscription model.
Travel subscription solutions provider Caravelo, which primarily has worked with airlines but is looking to expand, sees social behavior triggering more subscriptions as travel becomes more integral to travelers’ lifestyles, said chief product technology officer JoseLuis Vilar.
The real value benefit … [is the] fact that members of premium programs typically have higher customer lifetime value.
David Feldman — Catchit Loyalty
Hospitality subscriptions’ “lifetime” value
The advocates of subscription programs are playing a long game.
“The real value benefit … [is the] fact that members of premium programs typically have higher customer lifetime value,” Feldman said. “These customers maintain your customer base. So it’s not just the membership fees, although, of course, they absolutely do generate revenue, but these customers themselves are also more valuable.”
“The subscription model offers the opportunity to leverage enhanced customer loyalty, stable revenue streams and resilience against market fluctuations,” added Custom Travel Solutions’ Putman. “The loyalty landscape has never been more ripe for programs that offer tailored solutions and benefits that offer a sense of belonging.”
What those programs look like varies – and plays into a travel brand’s audience.
“This is a relatively old concept, which started as a club or community of like-minded travelers paying a membership fee in order to get certain benefits,” Putman said. “As technology has evolved, the concept now enables the aggregation of multiple types of travel services and benefits in just one portal but also increases the possibility to tailor the subscription to certain niches.”
At CitizenM, for example, the hotel brand’s hospitality subscription MycitizenM+ has “all the perks of a loyalty program without the complications of levels and points to collect,” said chief brand officer Robin Chadha, who said some 25,000 members are enrolled in the program.
“During the pandemic, the team spoke to hundreds of these guests about what they find valuable and inspiring when they travel,” said Chadha. “This also coincided with a time when the concept of workplace was being reassessed within society. Consistently, the feedback was having ‘peace of mind’ and a ‘feeling of recognition’ [as] the two most sought after elements. This is what inspired the hotel group to create this membership community.”
For an annual fee of $120, MycitizenM+ subscribers receive a 15% discount on the lowest public rate offerings, guaranteed rooms as long as they are booked 48 hours in advance and other perks such as late checkout.
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Categories: Trends