From streaming services to meal kits, subscription-based businesses have consumers hooked.
In travel, eDreams Odigeo launched a subscription service over two years ago called Prime that promises unlimited discounts on flights.
The Barcelona, Spain-based online travel agency revealed in a recent earnings call that total Prime subscriptions grew from 125,000 in the first quarter to 450,000 in the second quarter.
With Prime, eDreams has achieved something that many online travel agencies are chasing: loyalty.
However, in a recent interview with PhocusWire, eDreams CEO Dana Dunne dismissed the concept of loyalty and called it a “buzzword.”
“I think that's a buzzword,” says Dunne. “It's not just in the travel industry; it's a buzzword in most industries.”
Subscriptions to Prime cost €54.99 per year and are accessible on the OTA’s website.
EDreams assures that there are no restrictions for its exclusive flight discounts through Prime, with all dates and destinations included.
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“They get the leading prices in the marketplace,” says Dunne. “They also get priority customer service and any family members or friends that travels with them get that same price.”
Dunne adds that “as long as they’re on that booking with you, they also get those same benefits and prices.”
The discount for the flight depends on the price of the reservation: For example, a flight reservation between €100 to €199 would result in an average discount of €40.
The program currently operates in eDreams’ largest markets: Spain, Italy, Germany and France.
Dunne attributes the increase in subscribers to the program’s “great proposition” that “more customers are learning about.”
“We have spent zero in terms of marketing money on it, but yet we've seen that it has been picked up by some bloggers,” he says. “It's kind of gone - if I can say in a sentence - viral in some sense.”
Dunne says the reason for creating Prime is because “it's part of the ethos of the company, which is doing things new and different.”
“That's the expectation that we have within the company - which is to challenge ourselves and to challenge the marketplace,” he says. “We’re constantly trying to think about how we can innovate and do new things that are a win for the customer and win for the company.”
It's kind of gone - if I can say in a sentence - viral in some sense.
Dana Dunne - eDreams Odigeo
Loyalty, though, was not one of the motivating factors behind the creation of Prime.
“We weren't thinking about creating loyalty or a loyalty program - that was not the essence for the origin of this,” Dunne continues. “This was really about a group of people thinking about how we can do something new and different that would be far more impactful on consumers.”
He says that this is achieved through providing “uniqueness,” and a simple “points program” wouldn’t improve the customer experience.
“We didn't even actually consider a loyalty program because we just didn't feel that was with the type of philosophy that we were trying to get at."
Although loyalty was not the goal, it became the outcome.
In an age when some OTAs are struggling to compete with Google, having a subscription model that results in direct bookings can be a boon.
EDreams hopes to expand Prime to new markets in the future, with a goal of achieving two million subscribers by 2023.
“We will continue to innovate on it and think about how we can fundamentally change the way in which consumers think about travel and think about our company,” Dunne says.