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Travel subscription plans from airlines and hotels are expanding

By Harriet Baskas

There are subscriptions for just about everything these days, including streaming services, pet toys, meal plans, even crime-solving kits, and every year there are millions more people willing to pay for them.

According to an international survey by Zuora Subscribed Institute, 78 percent of U.S. adults paid for subscription services last year. The financial services firm UBS predicts the subscription business will continue to grow by 18 percent a year, to $1.5 trillion by 2025. The travel industry has stayed on the sidelines for much of the subscription boom. But that’s changing. Airlines, rental car companies and a growing number of hotels and resorts are introducing or expanding their subscription plans to attract the work-from-anywhere workforce and the growing number of leisure travelers who want to go to more places and stay longer.

The industry is “jumping on the subscription bandwagon because it locks in customers and increases profits,” said trends expert Daniel Levin of the Avant-Guide Institute, a travel and trends consulting company. For the right travelers, subscriptions can offer “the one-two punch of lower prices and greater convenience.”

But subscription deals also come with restrictions and fees that can make them costly if travelers' circumstances change.

Last month, Alaska Airlines became the first major carrier to launch a subscription program. For a fixed monthly rate of $49 to $550 and a yearlong commitment, Flight Plan subscribers can take up to 24 round trips, depending on the plan, among 16 airports in California, Nevada and Arizona, including Los Angeles, Reno, Phoenix and Las Vegas. But flights musts be booked at required intervals or flights credits may expire.

One of those subscribers is Eli Cohen, a qigong instructor who splits his time between San Francisco and Palm Springs, California. He is well-acquainted with the way ticket prices can swing up and down on that route. When the cost of a round trip soared to $400 last month, he decided to subscribe. Now, “instead of $400 for one round-trip flight, I’ll pay $600 and get six flights for the year,” he said. “And I’m also looking at flying for vacation to Los Angeles and San Diego.”

Alaska won’t disclose sign-up numbers, but “we are tracking just ahead of our full-year projections,” said Alex Corey, Alaska Airlines’ managing director of business development and products. He also said 1 of 3 new subscribers hadn’t flown Alaska in at least three years and that most have committed to more flights than they had taken with the airline at any time in the past.

Henry Harteveldt, a travel analyst and the founder of Atmosphere Research, said, “There has never been a more compelling time for airlines to consider developing subscription products than now.

“The travel business is like the soda business. The only way for brands to grow their market share is by stealing customers from their competitors. And fewer travelers view themselves as loyal to airlines and hotel brands than in 2019.”

Alaska is still the only major carrier to offer a monthly plan. But smaller airlines, including Volaris, a Mexico-based low-cost carrier, and FlySafair, a low-cost South African airline, have had subscription plans for a while, and several other airlines in South America and Europe are expected to announce plans soon, said Iñaki Uriz, the CEO of Caravelo, a subscription platform for the airline industry.

This article originally appeared on NBC News

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