As the pandemic slowly slips into the rear-view mirror, subscription travel is emerging as a new and interesting way for companies to extend greater utility to a subset of consumers who are very eager to pack their bags and experience the big wide world again.
For decades, the travel industry has operated on a fee-for-service basis, wherein travelers take it upon themselves to shop around before snapping up that airline ticket or hotel room for the best price they can find. But other industries have shown that better models do exist — and as the world finally opens up again, the travel segment is looking to memberships as a way of providing additional value to consumers while simultaneously encouraging them to get back outdoors.
They’re needed, too — because travel as a whole remains extremely subdued compared to what it was before the pandemic.
“I can tell you firsthand that going to some of these places, being in Venice again for the first time in a lifetime, it wasn’t crowded,” sticky.io’s Chief Executive Officer Brian Bogosian told PYMNTS’ Karen Webster in an interview.
It’s no longer crowded because the old way of selling travel — and then getting people out to the destinations — doesn’t work in the post-pandemic world.
“These cruise ships are going to have a tough time scaling to the volumes they had before,” Bogosian argued. “So there will have to be other means through which people can safely get to their destinations.”
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Travel memberships and subscriptions provide travel companies with those other means, Bogosian said. He spoke about the idea of having COVID-19 vaccination credentials stored on a QR code within a passport and how companies can leverage this information to provide consumers with new travel opportunities at lower costs as quickly as they become available.
“I have a QR code-based COVID credential in California, and this can be stored by my travel partner,” he explained. “This will make it a lot easier for travel firms to provide a seamless, opt-in experience for these consumers.”
The ability to offer safe travel in the post-pandemic world will likely enhance travel companies’ core offerings. Bogosian likened it to providers that partner with certain car-hire companies or hotels or offer deals around luggage limits and anything else that provides value. It’s really just another key value-add for travel memberships — but it’s one that he believes has the potential to steady a travel industry that has endured a very rocky 18 months.
“Consumers are pretty savvy, and they vote with their wallets,” he noted. “If you’re providing a full and comprehensive package and they can see they’re getting value and flexibility, there’s a tremendous opportunity for substantial material membership programs. They will go a long way toward stabilizing the travel industry.”
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Bogosian doesn’t believe that travel memberships will come at the expense of existing OTAs such as Expedia or even card providers like American Express. Rather, memberships will be able to extend into a lot of those existing services, he predicted. To be successful, travel providers must understand that no two offers can be the same, as there is no one-size-fits-all solution that will appeal to everyone.
“The key is how you bundle them, and how that resonates with the consumer you’re addressing,” he explained. “So it goes back to how much day-to-day data you have, and how well you know that consumer. Offers need to be customized for the person you’re dealing with.”
That means the key is to know who you’re dealing with. For travel providers, that involves gathering information about consumers and their preferences. Once you have that information, it becomes very easy to create flexible offers that offer value, Bogosian said.
“In any type of subscription offer, people must feel they’re getting loyalty points and value — otherwise, it’s going to be very easy to churn out,” he said. “If they recognize that they’re getting value, that will induce them to make some of these trips they’ve been considering for some time.”
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