A subscription model for hotels where customers pay a monthly fee to utilise rooms and facilities has been met with much curiosity but also limited interest among Asian hoteliers TTG Asia spoke to.
The business potential of the model was earlier discussed during a HICAP conference panel on October 23, where Pan Pacific Hotels Group’s (PPHG) CEO Choe Peng Sum expressed support for it.
Choe said the model would supplement the group’s existing loyalty programmes, and would be a natural evolution of loyalty building with a growing emphasis on communities.
He opined that customers now seek greater flexibility, value savings and instant rewards – needs that the subscription model could satisfy instantly, compared to the delayed gratification offered by loyalty redemption programmes.
But for the model to work, a “mindset shift” is needed.
“Hotel stays are perishables – pay as you stay. The idea of pay now stay later through a paid membership is a foreign concept. It is a new wave for the hospitality sector, catering to a new generation of travellers, which players must recognise and come on board to,” he said, citing Inspirato as an example of a hospitality company that has launched a subscription-based service in 2019, offering its subscribers access to over 60,000 vacation homes, hotels and resorts around the world.
Choe told TTG Asia that the model could work for PPHG, which has “a plethora of high quality restaurants and bars in our hotels globally”.
“There is a huge potential for us to build up a community through our portfolio of hotels, resorts, services suites and dining outlets. We are exploring different models,” he said, pointing to PPHG’s dining collection in Singapore as a best fit – “a low hanging fruit” – for the subscription model.
“With five hotels here, we have a collection of close to 20 restaurants and bars. A shrewd next step would be to build a strong community of food lovers and diners through a subscription model to our Pan Pacific Dining Collection. Other possibilities could stretch to subscription models for regional business travels for SMEs and hybrid meeting spaces,” he elaborated.
However, TTG Asia‘s conversations with other hoteliers in the region found less enthusiasm. Several hoteliers said the subscription model was still fairly new and unfamiliar.
A Hong Kong-based hotelier who requested anonymity, said it was not a concept the company has considered, or will likely consider in the immediate future.
Another hotel general manager in Hong Kong suggested that the subscription model could work better in Singapore, as the city-state has a strong presence of regional headquarters of multinational companies – a frequent-travelling segment that would find the concept beneficial.
However, he feared limited benefits for the hotel deploying the subscription model. “There is no flexibility. We’ll be in trouble if all our subscribers decide to come and stay on the same week of a month,” he said.
Instead of a subscription model, the general manager is pushing the sale of hotel coupons with face value, which companies can purchase and give away to staff as a form of performance bonus or reward.
Venessa Koo, COO of Taiwan headquartered Silks Hotel Group, also expressed uncertainty around the subscription model, saying that it will require a “very long-term commitment” to get off the ground.
She, too, is utilising a voucher system, which customers can buy in advance with discounts and use before expiry. This system is common in Taiwan, with Silks itself starting the voucher programme in 2011.
“Instead of collecting a monthly fee, it’s just one-off purchase,” Koo said, adding that this mitigates administrative problems that the subscription model could bring, such as resolution of unused rooms by the end of the month.
Koo said Silks is unlikely to adopt the model because “we need to make sure that we look after our guests’ interest and our own interest without making them feel that they are being scammed or taken advantage of”.
Inmarsat’s Passenger Confidence Tracker survey has determined that nine in 10 Asia-Pacific airline passengers will alter their travel habits for the long-term as a result of the pandemic, with half planning to travel less frequently by any means.
The survey, commissioned by Inmarsat and carried out by market research company Yonder. studied 10,000 airline passengers globally, including 2,500 from the Asia-Pacific region.
Ninety-three per cent of survey respondents in Asia-Pacific do not expecting to return to their previous travel routines once the pandemic is over, with 57 per cent describing their behaviour towards the pandemic as ‘highly cautious’, compared to 48 per cent globally.
The pandemic also seems to have sparked a shift in attitudes to travel in Asia, where 49 per cent of respondents expect to travel less by any means and 37 per cent plan to fly less in the future. This sentiment is stronger in India and South Korea, with 58 per cent and 55 per cent surveyed planning to travel less in the future respectively.
Despite this, there are early signs that Asia-Pacific travellers are starting to feel confident about flying again. Passengers in the region are more likely than the global average to have flown since the pandemic began: 41 per cent of Asia-Pacific respondents – and as much as 56 per cent of Indian respondents – have taken at least one flight since the pandemic reached their countries, compared to just 34 per cent globally.
The majority – 60 per cent – of Asia-Pacific passengers surveyed expect to feel fully ready to fly within the next year.
David Coiley, vice president Asia Pacific, Inmarsat Aviation, said: “The Passenger Confidence Tracker reveals that Asian travellers are more confident with the safety of the passenger journey than their counterparts.
This also reflects prevailing conditions in the region, where the spread of Covid-19 has largely abated across most markets, relative to other regions experiencing a resurgent wave of infections and further lockdowns. Given the level of consumer confidence, the outlook of the aviation industry in Asia-Pacific is looking optimistic.”
Coiley pointed to domestic travel recovery in China and India as most telling of the region’s travel confidence.
“In China, we saw domestic passenger volumes for the month of September increase from the same period last year, while domestic travel volumes in India are forecast to recover to pre-Covid levels by the end of the year,” he said.
When asked to rate their confidence around the safety and health precautions currently undertaken across all touchpoints throughout the journey, Asia-Pacific respondents recorded an aggregated score of 6.27 (with 10 being the highest level of confidence), higher than the global average score of 5.55.
The majority also perceive public spaces such as restaurants, cinemas, public transport, and public toilets to be either as risky, or even riskier than, taking a flight.
Asian respondents stated a need for clearer information about border restrictions, standardised practices across all airlines and a consistent worldwide set of safety standards as particular areas for improvement. Furthermore, respondents determined that wearing a face mask both inflight and in airports, and only being allowed to fly after a 48-hour test are the most effective personal safety measures. Only 10 per cent identified a 14-day quarantine as a top factor.
While the majority of Asia-Pacific passengers (65 per cent) surveyed feel satisfied with the aviation industry’s response to the challenges of Covid-19, the study reveals areas of opportunity for airlines to encourage passengers back to the skies.
Almost half (48 per cent ) of Asian respondents believe that reputation is a more significant factor when choosing an airline today than it was pre-pandemic. It has therefore never been more vital for airlines to differentiate and gain a competitive edge. The research highlights that improving inflight experience is one way to achieve this.
From extra legroom (44 per cent) to free baggage (36 per cent), value added services are becoming increasingly important to passengers returning to the skies. Digital solutions are fast-becoming essential to an enjoyable inflight experience, with four in ten respondents agreeing that on-board Wi-Fi matters more today than ever before.
Philip Balaam, president of Inmarsat Aviation, said: “With safety and reputation becoming even more important to today’s flyers, there is a clear need for airlines to differentiate themselves in order to encourage passengers back onto their flights.
“Digitalisation lies at the heart of both; minimising critical touchpoints in the passenger journey to improve confidence, all the while keeping passengers connected and entertained.”