JetBlue has a strong brand and plans to curate the short-term rental inventory it offers with the backing of its own customer service abilities rather than relegating that to a partner. This expansion is worth a try, but will come with brand risks.
JetBlue plans to offer short-term rentals with the help of a partner not named yet, possibly by the end of the year. The airline plans on offering the accommodations under its own brand, and would handle the customer service in-house instead of leaving that to the partner.
Andres Barry, president of JetBlue Travel Products, a subsidiary of the airline, detailed the plans Tuesday at a Morgan Stanley conference for the carrier to expand beyond its current non-air portfolio of JetBlue Vacations, travel insurance, car rentals, ridesharing and cruises, and into short-term rentals.
Barry said the pandemic slowed JetBlue’s plans after announcing at its 2018 investor day that the airline’s incremental operating income from products beyond flights could be $100 million in 2022.
Unlike most airlines that offer hotels and other non-air products, Barry said JetBlue would carefully curate the short-term rentals it offers, leveraging its own customer data and meeting JetBlue standards. JetBlue would put its own brand power behind the product, and handle the customer service itself rather than letting the partner do it.
“The typical model in this world is you buy a product, and then if you have a question, call the partner,” Barry said. “And what we’re saying is, no, no, we’re slowly but surely taking over the servicing. So if there’s anything that you have a question on or make a change, it’s all handled through JetBlue.”
Toward the end of 2020 and into next year JetBlue plans to “get more into short-term rentals and cruises and spaces like that where, well, we may not be providing the hard product, but we’re providing the service and we’re selecting the products for our customers that we think meet their standards and then ensure that they’re getting good value for money in service,” Barry said.
He mentioned that Airbnb and Vrbo were among potential partners for the short-term rental service.
Whether it is ridesharing, cruise or short-term rentals, Barry said it is unclear which elements of JetBlue’s non-air offering would get the most pick-up from its customers, many of whom take fairly long vacations when they book JetBlue flights.
Speaking of the $100 million incremental operating income goal that the airline articulated in 2018, Barry said, “But on the whole, the $100 million number felt like if we — if we get even like 4 percent or 5 percent of JetBlue customer base to really invest in buying all their travel through us, we see a path to that sort of profit bottom line number.”
So like Tripadvisor, Booking Holdings, and Expedia, JetBlue’s vision is for a subset of its customers to buy their entire trips through JetBlue.
It would be the connected trip, JetBlue style.
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Photo credit: A passenger walks past a JetBlue advertisement at Logan International Airport in Boston, Massachusetts January 6, 2014. JetBlue plans to expanding into short-term rentals. Bryan Snyder / Reuters