It's as good a time as any to test new revenue models, but this may just be a financial buffer until demand comes back.
They say a caffeine kick gets the creative juices flowing, but for one company it was a chain of coffeehouses that sparked an idea.
Meanwhile Mint House, which offers business travelers apartment-style accommodation, will start a similar service in the first quarter of this year, Skift has learned.
Subscription packages offer unlimited stays for a set fee; STAY, for example, calls this new scheme “All You Can STAY”. There’s more flexibility and freedom for business travelers, but subscriptions may tie companies into longer contracts, so they’ll need to make the most of them for any return on investment.
Waking Up to New Ideas
STAY claims its subscription scheme is the first of its kind for the serviced apartment sector. “We looked at Pret A Manger, it spurred some ideas to brainstorm,” Sam Ghosh, its vice-president of operations, told Skift. “In our case, we try to tailor-make everything, in terms of working environments and stays.”
As well as accommodation, STAY customers can use eight LABS office spaces across London. They also get a grocery pack, Uber credit, virtual concierge and gym access.
However, it currently has just one property, STAY Camden, with 169 apartments. But the program will extend to its Kings Cross property in London, which opens later this year.
Mint House’s subscription program will apply to 21 properties across 12 U.S. cities, including New York, Miami, Austin, Denver and Nashville. It will be targeted at “business travelers, digital nomads and loyal Mint House extended stay guests,” the company told Skift.
“More than 80 percent of our guests are currently working remotely while they stay with us, so we’ve been focused on making our suites ideal for remote work. A subscription model gives our guests a chance to hop between Mint House locations, continuing to work remotely, but changing their city or property every month,” a spokesperson added.
It also plans to roll out a new loyalty scheme this year.
While travel companies are increasingly turning to subscriptions in the wake of the pandemic, the corporate sector is taking its first steps.
CitizenM recently started offering corporate subscriptions, where a business traveler can work in any lobby, reserve a meeting room, or stay for three nights with breakfast for $600 a month, or through a discounted annual pass.
It says that while it can’t comment on the number of subscribers so far, it has seen uptake across the U.S., UK, Netherlands, Switzerland, Denmark and France, with customers from the technology, banking, retail, finance and insurance sectors signing on.
An Antidote to Dynamic Pricing
Mint House and STAY claim an annual subscription fee can unlock significant savings, and from a procurement perspective there are potential long-term gains for company travel managers.
Subscriptions go against the grain of dynamic and continuous pricing some suppliers are adopting, a tactic that will help them emerge from the pandemic with maximum revenue.
“We know when the lockdown lifts, there’ll be a huge amount of corporate travelers coming into London, and prices will surge,” Ghosh said. “We’ve tried to get rid of the dynamic pricing, and are saying to corporates: you can fix your inventory and your rates for the full 12 months now. Regardless of how many travelers they have coming in, or going out, it doesn’t matter. They’ll always have that inventory they’ve paid for.”
Subscription packages will certainly appeal to companies that see no end in sight to the travel restrictions. The UK in particular is shutting its borders due to peak numbers of Covid-19 cases and concerns over new strains of the virus. Subscriptions could give employees greater flexibility to work and live in different regions, and under budget.
Meanwhile, the rise of digital nomads is set to be “one of the biggest movements hospitality has ever seen,” according to Rafael Museri, the co-founder and CEO of hotel startup Selina, which recently bought Remote Year.
However, when corporate life returns to normal and deserted city centers start to fill up again, there’s a chance accommodation specialists will think twice about offering such budget-beating packages.
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Photo Credit: Apartments at STAY Camden, in London, are available on a subscription basis for corporate clients. STAY Apartments