Accor is going global with its subscription cards to boost hotel loyalty in 2023

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Many industries have been looking at subscription models to drive their sales and revenue growth. While on-demand video streaming platforms have popularized the subscription model initially, it has also gained widespread adoption in the dining and restaurant space. In 2023, the travel sector is another industry where the subscription model is expected to grow in popularity among businesses.

For a few years now, the travel firms have been seeking to integrate the subscription service into the business model. But Accor, the Paris-based hotel giant, has become the first firm in travel sector to launch the subscription card service in the global market.

• In March 2023, Accor announced that the firm aims to go global with its subscription cards, thereby offering its members with discounts and perks worldwide instead of regionally. Until now, the firm only offered subscription cards in selected markets such as the Asia Pacific region, India, China, and Brazil.
• The new program, All Plus, will give global travelers the ability to access discounts across 100 countries and at 4,000 properties. Furthermore, the new program will also enable members to accelerate their status in the loyalty program.

Through the subscription model, Accor is seeking to take market share away from its competitors. According to the firm, subscription cardholders accelerated their bookings between 35% to 45%. As Accor only owns 2% of the properties that it operates, the firm is using this data to woo franchisees and hotel owners to accept the discount-based product. Accor is also expecting that the subscription model will enable franchisees and hotel owners to reach more travelers.

To boost its revenue growth, Accor has also made the subscription card service available for businesses. Corporate travel programs can purchase subscription cards for their employees. With its subscription cards business-to-business (B2B) offering, Accor is aiming to boost the percentage of its direct bookings, which will also enable the firm to win more spending by business travelers.

• Direct bookings are less expensive for Accor and its hotel partners compared to the ones that come through online travel booking platforms. Consequently, the B2B subscription cards service will not only enable to reach more customers, but it will also drive more revenue for the firm.

In the Asia Pacific region, where the subscription card service was initially launched, the size of booking volume of rooms through AccorPlus (termed as All Plus in the global market) is equivalent to the volume of rooms through its third- or fourth-largest online travel agency partners. With All Plus, Accor is seeking to achieve the same success in the global market by using subscription cards as digital marketing.

Several firms in the travel sector have attempted to create subscription-based products for driving customer loyalty.

• eDreams, the online travel agency in Spain, attributed the surge in bookings to the subscription product that it launched for travelers seeking cheaper deals. As of November 2022, the number of subscribers paying US$57 annually to access cheaper deals stood at 3.8 million, representing a growth of 31% compared to May 2022.

Remote Year, another travel firm, launched three membership packages for remote employees seeking to work from different parts of the world. The subscription program was aimed at encouraging more beginners to join the service offered by the firm. IHG also had an ambassador program for years now, enabling travelers to pay an annual fee for accessing benefits that are generally reserved by higher-level loyalty program members. While IHG has been running the ambassador program for years, it never described the service as a subscription model.

In 2023, the pent-up travel demand means that businesses in the travel sector are projected to record robust growth. However, it also means that the travel industry landscape will be highly competitive over the next 12 months. Consequently, to drive market share away from competitors, PayNXT360 expects more and more businesses to innovate with their loyalty programs. With the subscription model gaining widespread popularity among businesses in the travel sector, many more businesses are projected to launch such subscription card services to boost customer loyalty in 2023.

To know more and gain a deeper understanding of the global loyalty program market, click here.