Luxury Travel Turns To Subscription Services

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The subscription eCommerce market has nothing short of exploded over the last year. In fact, McKinsey & Co. said in a 2018 study that the subscription eCommerce market had grown by more than 100% annually since 2013. It is fair to say you can subscribe to monthly deliveries of just about anything

Meanwhile, we have entered a new era of luxury travel. The rapidly expanding market caters for newly affluent citizens across the world whilst also delivering a new, evolved kind of luxury for the mature markets. An uber personalised, exclusive experience.

So it would seem almost inevitable that these two industries – one that curates repeat personalised delivery and another that curates personalised luxury service – would collide. Queue the Inspirato Pass. The world’s first luxury travel subscription service. 

Inspirato Pass

Inspirato Pass

For $2500 a month, pass holders gain access to a “buffet” selection of luxury vacation homes and legacy five-star hotels on a first-come, first-served basis. Since its launch in July 2019, subscribers have been able to pick from over 60,000 available trips or properties in more than 150 locations around the world without worrying about highly idiosyncratic nightly rates, taxes, or fees.

Whilst Inspirsto’s flagship model remains a members-based luxury destination club, “The Pass gives affluent travellers the freedom to book a wider variety of trips and experiences on a more frequent basis…” says Founder and CEO, Brent Handler. 

Although it isn’t quite an ‘all you can eat’ travel buffet. Passholders have to subscribe for a minimum of 6 months and can only book their second trip once they have checked out of the one previous. 

So why is this launch so significant? 

For one, it speaks to a number of transformations we are seeing across the luxury travel space. As an exclusive, indulgent, trusted travel guardian, the Inspirato Pass ticks the top tier of the hierarchy in luxury travel needs. 

It’s no longer enough to understand what luxury means to a particular traveller – it’s about knowing what luxury means to that traveller right now.

The new era of luxury travel requires brands to constantly monitor their expectations, and adapt accordingly. In other words, new luxury is real-time. Firms such as Inspirato, which updates its vacation list each and every day, are perfectly equipped to do just this; adjust their service offering to subscribers to fit the evolving demands of luxury consumers. 

For example, striking that crucial balance between high and low touch service. Inspirato can guide customers through the booking process or impart valuable knowledge on local cuisine, whilst also offering the technology for users to book, check-in and check out from a holiday without ever having to speak to another person.

The convenience of a subscription service speaks directly to those who value ease and transparency in their vacation planning. All important, but seemingly laborious research and decision making is outsourced to trusted parties. Inspirato perfectly strikes notes of flexibility and convenience — central tenets of modern-day luxury travel for a time-poor workforce.  

The convenience of a subscription service speaks directly to those who value ease and transparency in their vacation planning. 

The problem of inventory 

Inspirato has capitalised on the virtually untapped market of empty hotel rooms. Luxury hospitality brands lack the ability to publicly discount as lower-level brands do, and therefore do not have efficient methods of selling leftover inventory. 

Described by its CEO as a “software business”, Inspirato places tens of millions of queries against a database to identify unsold hotel rooms. The firm has developed a mechanism to communicate with these hotels and purchase inventory at rates substantially below what consumers would be able to get on their own. It’s an opaque channel for luxury hotels to sell inventory whilst maintaining a veneer of exclusivity. Meanwhile guests gain access to top tier rooms at discounted prices. It’s a win-win. 

“We’re filling in the void of the excess capacity that exists in luxury hotels and homes and making them useful when they would otherwise be empty. It’s not dissimilar to what Uber did when people had excess capacity in their cars. We’re doing the same thing with unsold hotel rooms and homes.” Brent Handler, Founder and CEO, Inspirato

But, how far can the subscription model truly embed itself across the market? 

Whilst the Inspirato Pass offers access to undisputed opulence and luxury, there is doubt over how far a subscription model can deliver those ultra-bespoke experiences for all of its audience. 

It’s the non-googleable experiences that generate buzz. But those unavailable, undiscovered experiences will be virtually impossible for Inspirato to deliver when its service offering is essentially ‘inventory leftovers’. The challenge for Inspirato will be moulding a brand image that moves away from a supercharged vacation club. 

Secondly, users must feel they are getting value for money. High cancellation rates rings true for the entire subscription economy. But perceptions of ‘value for money’ are further complicated in relation to luxury travel.

Delightful, memorable experiences are the result of seamless end-to-end experiences. Not just the serenity of a hotel, but also efficient airport check-in, a relaxing flight or on-time taxi pick up – none of which are within the parameters of Inspirato’s service but all directly affect the user’s perception of value for money. The future of subscription services in luxury travel will pay due attention to collaboration and connection between all points of the user journey. It will require an industry-wide push towards holistic luxury service. 

“Exploring the latest technologies and innovations for making the industry work better as a whole is key to achieving a new level of luxury that has never existed before Shaping the Future of Luxury Travel, Connections 

Conclusion

Inspirato is pushing the boundaries of luxury travel. Innovative delivery of convenience, flexibility and luxury via subscription services both customers with a high-end product but also Inspirato with all-important traveller data. 

But all might not run so smoothly. Customers are quick to cancel if they don’t believe service equates to cost. As always, personalisation is king. Attention ought to be paid to effective and relevant segmentation to help identify every subscriber’s unique preferences and pain points. 

That being said, the future is undeniably exciting for luxury travel. Perhaps subscription is here to stay. 

For more information about subscription eCommerce, see Matter Of Form’s recent piece, Unboxing the Success of Subscription eCommerce


If you wish to discuss the content or hear our thoughts on how to put some of our insights into action, please get in touch via [email protected] and we would be delighted to have a chat.

About Matter Of Form Group

Established in 2018, the Matter Of Form Group is a collection of four award-winning agencies united and bound together by a common set of ideas and values centred around the mantra ‘Make Change Effective’.

The group consists of Matter Of Form, FORM Commerce, Diffusion Digital and Experience Haus with clients spanning the travel and hospitality, retail, property and real estate, wellness, lifestyle, third sector, B2B sectors and beyond.

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