I mentioned a travel subscription in my 2021 Outlook video. Yes, the idea is that you can pay a flat subscription fee for, say Arik and Air Peace in Nigeria, and fly as much as you want locally [that does not exist in those airlines as I write]. Is that a nice idea? Some are already on that redesign: “Costco has partnered with WheelsUp to offer a yearly private jet subscription”.
The pandemic wreaked havoc on the travel industry in 2020: international travel all but halted for many countries; airlines filed for bankruptcy protection; traditional tourist hotspots have become coldspots. In response, the travel industry has been forced to rip up big chunks of its playbook and start fresh. One idea gaining traction? Travel subscriptions. Costco has partnered with WheelsUp to offer a yearly private jet subscription for $17,499.99. Tripadvisor is launching a yearly subscription service called Tripadvisor Plus for $99, which offers access to travel deals and other perks.
The idea is not really bad. It all depends on the price. If the price is fine, many will go for it. For the airlines, they will have a more predictable revenue model, and that could be a good thing for them. Largely, even during lockdowns and pandemic, the revenue is locked for good!
Yet, there is risk for airlines: people can just buy the subscription and decide to be sleeping on air. After all, Nigeria remains the only place I know where people found peace, doing a wedding reception in a rented aircraft in the mid air, as a sign of affluence! So, some will tour if you give them an open annual subscription.
So, it comes down to the right equilibrium point. Yes, finding the optimal pricing point would be the secret sauce in this latent business model.
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