The U.S. subscription economy is expected to double by 2025—and judging by the pace of new subscription programs being introduced across multiple industries, that forecast seems quite accurate. From fast-food to residential services to convenience stores, subscriptions are showing up everywhere. The travel and tourism industry is no exception.
Subscriptions are attractive to airlines, hotels, tour operators and other travel-related businesses because they build customer interaction frequency and secure loyalty. Subscription programs also create recurring, forecastable revenue and reduce unused inventory—maximizing the returns on existing capacity. The model is beginning to transform an industry that has been historically defined by more transactional customer relationships and a history of boom-or-bust cycles.
Recent successes demonstrate that consumers are also rapidly warming to subscriptions in new areas. In fact, more consumers are even beginning to expect them. They recognize that subscription programs unlock a level of exclusive services, discounts and other special perks.
Travel loyalty programs have typically been built around miles and points, but there are many innovative new paid programs that have recently been introduced:
- Alaska Airlines Flight Pass
For a subscription fee starting at $49 per month, the new Flight Pass subscription program allows travelers to fly roundtrip to multiple destinations within California, Nevada and Arizona at significantly discounted rates.
- Inspirato Pass
The $2,500 per month luxury travel and lifestyle subscription provides members with access to more than a million trips inclusive of nightly rates, taxes and fees, and the company continues to innovate and improve on its successful program.
- Ultimate Travel Club
This new UK-based startup provides members with the ability to book lodging, flights, cars, cruises and even theme parks and restaurants, at trade prices with no markup for £99 per year.
- Priority Pass
Three different membership tiers ($99, $299 or $429 per year) provide access to more than 1,300 airport lounges globally. Several credit cards now offer a priority pass membership as a free benefit.
- MyCitizenM Plus
Hotel chain CitizenM offers subscribers, for $12/month, a host of exclusive benefits including 10% off any stay, late checkouts, premium-view rooms, guaranteed reservations and early access to sales.
Inspirato Pass Demonstrates Demand
Launched in July of 2019, the Inspirato Pass was an innovative twist on luxury travel, and despite COVID-related travel restrictions in the following years, the company announced some very impressive results as of the end of 2021.
Active subscribers continue to grow and have surpassed 14,000. Annual recurring revenue from the program increased 49% year-over-year to a record $135 million. The company has recently expanded its portfolio of branded luxury vacation residences through the launch of Inspirato Real Estate and just launched further improvements to the Inspirato Pass—expanding the trip list from 150,000 options to over 1.5 million and adding the flexibility to hold multiple Pass reservations simultaneously.
The Inspirato Pass is a great example of subscription innovation in the travel industry. No doubt, many more innovations are on the horizon from other travel industry companies.
Rebar and the Growth of Subscription Services
While subscription programs can add significant value, implementing them isn’t simple. Factors such as pricing and bundling, enrollment, redemptions, renewals, payment collection, and more need to be carefully planned and executed. Not only can these factors affect the initial success of subscription programs, but not considering them for the long-term can stifle growth.
Rebar Technology brings a combination of expertise, strategy, technology, execution and support to help travel and tourism organizations develop and launch innovative subscription programs that create recurring revenue, enhanced bookings and powerful customer loyalty. Let us put our subject matter expertise and our decades of experience in subscription billing to work for you. Contact us to learn more.