Fitness membership? Check. Streaming account? Of course. Meal kit service? Sure.
How about your hotel subscription?
Whether for pleasure, work, or long-term lodging, hospitality operators are hoping on-demand stays could be your next must-have membership as the embattled travel industry tries to expand its reach.
InterContinental Hotels Group, Marriott and Accor are among the major names that have launched or are considering monthly payment plans, as hotels try to attract restless remote workers ready for a change of scene.
Hotels are seeking to capture new customers with a range of subscription services.
GoodLifeStudio | E+ | Getty Images
For monthly rates ranging from $1,100 in Singapore to $1,970 in Indonesia, InterContinental guests can already enjoy varying access to InterContinental’s workspaces, rooms and facilities under new “work from hotel” packages. Meanwhile, Accor told CNBC’s Global Traveler that it’s “looking at monthly subscription fees” as it considers repurposing rooms into private gyms and even recording studios.
Marriott, for its part, said it will be announcing plans in the coming weeks.
But it’s not just corporate workers that hotels are after. After watching the tremendous ascent of subscription giants like Netflix, Peloton and Spotify during the pandemic, more and more hotels are looking to subscription models to give them a way forward.
Last month, luxury travel group Inspirato claimed it became the first operator of its kind to go completely subscription-based, extending an existing all-you-can-travel model while launching a second at a reduced rate.
For $2,500 a month, the Denver-based firm lets subscribers stay at 300 accommodations globally with no nightly rates, taxes or fees under its year-old Inspirato Pass membership. Meanwhile, a newly-launched $600 monthly Inspirato Club option grants access to the group’s collection with nightly fees charged as extra.
Luxury travel operator Inspirato grants members access to its collection of 300 vacation homes, hotels and resorts for a flat monthly rate.
The company says there is no defined limit on stays, though the typical subscriber travels every six to eight weeks for an average of four nights, and 60-day maximum stays do apply.
The move marks a departure from the 10-year-old private club’s former reliance on hefty sign-up fees and responds to “increased demand for subscription-based services” in other sectors, co-founder and CEO Brent Handler said.
Indeed, last month, hotelier to the stars Andre Balazs also said he would turn Los Angeles’ iconic Chateau Marmont into a members-only hotel.
‘The Netflix of the hotel industry’
High-end brands are not alone in reaching for the monthly model, either.
In August, Panama-based boutique group Selina said it would rent 50% of its rooms for monthly rates of around $500. Elsewhere, Dutch chain citizenM launched two subscription services for its international network of 21 properties across New York, Paris and Amsterdam.
We saw that this is a once-in-a-lifetime opportunity to become the Netflix of the hotel industry.
Lennert de Jong
chief commercial officer, citizenM
For $600 per employee per month, a corporate subscription gives companies unlimited access to its signature hotel “living rooms,” plus three overnight stays and use of meeting rooms. A separate global passport subscription buys members hotel stays of up to 30 days per month for around $1,500, or $50 per night.
Lennert de Jong, citizenM’s chief commercial officer, said the deal — which is currently limited to 1,000 applications — is designed for flexible workers and travelers as an alternative to renting in big cities.
CitizenM’s New York Bowery Hotel is among the hotel chain’s several properties offering corporate and remote worker subscription packages.
“When you can work from home, you can really work from anywhere,” he said. “We saw that this is a once-in-a-lifetime opportunity to become the Netflix of the hotel industry and provide unlimited nights at a fixed price.”
Travel bans curb subscribers
Of course, the main hurdle for many of these players will be the travel restrictions that have pushed the industry to its knees in 2020.
Though some hotel subscriptions target locals, few will find that model scalable. And while the appeal for hotels of locked-in monthly revenues and greater customer data is apparent, the benefit for users may be less so.
It is not clear what the value proposition would be for this during the pandemic.
associate professor, Temple University
“It is not clear what the value proposition would be for this during the pandemic when globally, travel restrictions and consumer sentiment are variable,” Ceridwyn King, associate professor in the School of Sport, Tourism and Hospitality Management at Philadelphia’s Temple University, told CNBC’s Global Traveler.
“Further, this particular crisis and the way it essentially bought the global travel business to a dramatic halt almost overnight, may mean people are less inclined to lock into something,” she added.
Inspirato, for its part, had to persuade members to continue payments in March, April and May, at the height of lockdowns, in exchange for freezing fees in July, August and September. Handler said the company suffered little attrition during the period, reporting a renewal rate of 97% in June.
A time for experimentation
Nevertheless, the need for hotels to adapt is clear, and monthly travel payments could benefit both hotels and consumers.
Even before the pandemic, travel start-ups such as London-based BeRightBack were emerging to do just that. For the equivalent of around $65 per month, the subscription service grants customers three trips a year to 60 European destinations.
Now, guided travel company Trafalgar is hoping to lock in 2021 travelers with trips paid in monthly installments at today’s rates.
InterContinental Singapore has 12-hour daily access to its workspace area plus additional hotel facilities for a flat monthly rate.
InterContinental Hotel Group
Indeed, Robbie Kellman Baxter, a consultant at Peninsula Strategies and author of “The Membership Economy,” said now is a good time for hotels to try out such models.
“Changes in consumer behavior — social distancing leading to reduced travel and increased remote work, for example — create opportunities for new offerings and to establish new habits. Now is a great time for experimentation, since the friction … is low as customers look for new solutions,” she said, recommending hotels hone in on the needs of their core customers.
However, Kellman Baxter added that such transitions could take time to bear fruit: “You can’t speed up subscription profits — you have to play the long game.”
That may not be the quick fix the hotel industry needs right now.