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How Subscription Models are Helping Accelerate Post Pandemic Recovery in the Travel Industry

Couple with luggages walking through outdoor airport space.

While the pandemic had an immediate impact on the travel industry, another less visible consequence was its effect on loyalty programs. Travel restrictions changed the way many consumers worked and vacationed meaning they had fewer opportunities to earn points/miles within their favorite programs. In contrast, demand for subscription-based products and services has grown significantly since March 2020. In fact, the subscription sector was one of the few that experienced growth.

Now, as the travel industry begins to recover, loyalty programs are leveraging this new consumer trend to engage with their members.  Subscription models are proving popular with consumers who are keen to start planning their next trip away and would like to take advantage of a cost-effective and convenient way to reach their travel reward goals.

This month, we partnered with United Airlines MileagePlus to introduce Miles by the Month to their members which leverages our Subscription loyalty solution. This latest benefit lets MileagePlus members easily save for their next vacation. Customers can choose to earn an additional 3, 5, or 8K miles each month and benefit from a guaranteed discounted rate and also receive bonus miles, worth up to 25%* of their selected annual miles plan in quarterly installments. United Airlines is the second North American carrier to implement our subscription-based service this year.

Providing the option to plan and budget for vacations on subscription will be particularly appealing to Gen Z and Millenials. In a recent survey by GetYourGuide.com as reported by Forbes* travel was the highest-ranked activity consumers were looking forward to post-pandemic, with significant numbers of respondents already in the planning stage for future trips. Of those surveyed, 60% of Gen Z and 48% of Millennials indicated that they are looking to book domestic getaways, with 51% of Gen Z respondents setting their sights on international trips. 

In terms of how much they would budget towards future travel experiences, Millennials ranked highly. Over half of respondents in this age group shared that they would be open to paying extra for someone to arrange experiences for them while on vacation, plus their average daily budget on travel experiences was higher when compared to Gen X and Z respondents. As well as being keen to travel in the near future and maximize their experiences while away, Millennials have grown up with on-demand subscription-based services and are accustomed to making purchases in this format. Take up of subscription-based products we have recently introduced over-indexed among members within the 30 to 39-year-old age group. 

With no slow-down in consumer demand for subscription-based products and services, together with growing consumer interest in reinstating deferred travel plans, we predict that this type of member benefit will only continue to increase in popularity. Read more about the Subscription trend and other top trends shaping the loyalty industry.

*https://www.forbes.com/sites/lealane/2021/08/31/new-survey-despite-the-delta-variant-american-generations-still-eager-to-travel/?sh=40e2830131eb

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