This article originally appeared in HOTELS magazine.
Living out of a hotel used to be something only seen in movies. But in the age of digital nomads and remote working, hotels are making it simple for consumers to stay long-term. From InterContinental to Marriott, brands are taking a page out of Netflix’s handbook and offering subscription models.
This move enables them to compete with Airbnb for workcation guests, but to be successful, hospitality brands need to evolve how they position themselves and the value they deliver. Subscriptions are about an ongoing relationship. Hospitality brands can no longer only focus on what happens on-property. They must evolve from destinations that promise temporary accommodations to lifestyle brands that promise and deliver connection to a community that shares their values. This is what Airbnb got right from the beginning – so much so that they didn’t even own the accommodations in which their users stayed.
What does it take to accomplish this shift? Let’s look at what some of the most successful lifestyle brands have in common.
Valued-based. Many experts who track lifestyle brands say the best ones get to know their audience and build accordingly. But what separates the best lifestyle brands is that they define their values and target consumers who share those values. The people within the company truly share these values; they seek talent with these beliefs. Take Patagonia’s careers page: “If you love big challenges, taking action and want to help preserve the wild places where we play, see our open jobs.”
Audience-centric. They know it’s not about them but about what their product enables their customers to achieve. Everything comes back to empowering their audience to fulfill their aspirations. And the standouts take it one step further by providing a means to connect their customers with a community of like-minded individuals who have the same aspirations. With audio-guided runs, community challenges and customized coaching, Nike’s Run Club gives runners tools they need to run better. All for free.
Focused. Their set of core values influences every aspect of what they do—even if it costs them customers. Often, this is because some audiences don’t ascribe to these values, though other times it can be more direct: REI’s #OptOutside tradition closes their stores on Black Friday to encourage people to spend time outdoors with their friends and family. In both cases, the result is deeper connections with customers, resulting in more purchases, sure, but more importantly, it creates loyalty and advocacy.
So how can hospitality brands apply these lifestyle brand lessons as they explore subscription-based models?
- See who’s out there that shares your values and get to know them well.
There are many reasons to consider a subscription model. Business becomes more stable, and companies receive higher valuations. In the case of hotels, it unlocks the potential to engage with a new audience. Unlike the traditional core business traveler audience of many hotel brands, the subscriber audience is more likely to be without children and therefore not tethered to one location.
From the lifestyle brand lessons, it is not enough to consider only demographics. Hotel brands must seek out the segment of that potential audience that shares their values. Start by evaluating your current values to ensure they’re distinct, as well as embedded in everything you do. See if you can push your team beyond the expected to uncover your shared beliefs about life and how it should be lived. Do you value beauty and creativity? Share an appreciation for nature? Seek to continuously grow? Use this exercise to create a unique set of values that can guide you.
Once you understand your values, invest time getting to know those who share them. Building personas can be a useful exercise to humanize your potential audience and give your team a single source of truth. By understanding their goals and aspirations, spending preferences, needs and pain points, you can design a subscription offering that serves your guests.
- Expand how you think about value delivery
To craft a compelling subscription-based offering, it might help to unpack the appeal that drove subscriptions to become popular in the first place. There are many flavors of subscriptions with different benefits, from meal kits that enable discovery to custom hair care built to deliver a personalized experience. But there is one benefit they all share: convenience. They all deliver things to me, on my terms.
But in the context of travel, the benefit of convenience becomes much less relevant. Travel, by nature, takes work – I am bringing myself to a different location, instead of it coming to me. Maybe convenience comes into play when I get there, but some upfront work is to be done. Potentially enough that I subscribe to a hotel, but then never take the trip and cancel a year later.
So how can hotels make sure their subscribers experience enough value to ensure they re-subscribe?
To start, they can find ways to make it as convenient as possible to book and get there, like promotional emails with low airfare alerts or concierge services can take some of the work out of planning. But hotel brands also have to shift how they think about the value they deliver: from being only on-property to extending beyond the property. We know from the best lifestyle brands that it can’t be about the product – it must be about the audience and empowering them to live the lifestyle they aspire to. In the case of hotels, that could be while they’re at home.
Hotel brands will have to find ways to deliver value, even when their subscribers aren’t staying at one of their properties to have the best chance at success within the subscription space. This could take the form of sharing content that highlights activities associated with their lifestyle from across the globe. Or imagine setting up a Slack channel where subscribers connect, sharing tips and recommendations. Whatever the idea, remember it should be grounded in your values and empower your audience to live the life to which they aspire.
Katie Conway is Senior Strategy Director