NewsWire: 2/5/21
- Restaurants and travel agencies are turning to subscription models to help them weather the pandemic. Subscriptions offer these businesses desperately-needed cash flow, and in return consumers get access to exclusive services and perks. (Bloomberg)
- NH: Most of the news coming out about the travel business has been negative. Last week, I brought up the gloomy prospects for hotels. (See “Hotels Brace for an Uncertain Future.”) But as the industry struggles, there’s one corner that’s thriving: private travel clubs.
- The phrase “private travel” probably conjures up images of first-class flights and ultra-luxe vacations. Actually, it covers companies that offer a wide range of services for different budgets. High-end clubs, like Exclusive Resorts, Inspirato, and Marchay, cost five to six figures a year and offer personalized itineraries, concierge service, and access to private residences. Others, like Prior and AllCall, offer trip planning services and don’t cost much more than a Netflix family plan.
- With the pandemic putting a premium on health and safety, the value proposition of members-only travel has soared. People are eager to sign up if it means that they can trust that their rooms have been sanitized and they won’t run into any unexpected travel restrictions. It also helps that America's affluent currently enjoy brimming bank accounts. Despite the slowdown in travel, Inspirato’s bookings are up 30% YoY, and other luxury clubs report that 2020 was their best year ever.
- The desire for the familiar has also given a lift to timeshares, which are seeing fewer new customers but higher spending and longer bookings from current owners. Since bottoming out in April 2020, the share price for Wyndham Destinations (WYND) has surged 165%.
- The subscription model has been a lifeline for travel agencies, which have relied on the steady income to weather the pandemic. Other hard-hit industries have begun offering subscriptions as well: Table22, which is basically Patreon for restaurants, has partnered with dozens of restaurants offering subscribers access to perks like cooking classes, meal and drink deliveries, and first-dibs reservations once they reopen. Unlike with travel, these subscriptions are more a way for people to support their favorite chefs and restaurants--but they’re also usually linked with white-glove service and priority treatment.
