Jens-Henning Peters Consultant
The subscription business model has been around for a while, however recently it has been spreading to different industries, changing the way clients interact with businesses.
These days, fewer consumers and businesses buy software. Adobe creative software for example: While it could still be bought two years ago, now we have to subscribe to it & pay monthly, to use the latest version. Music? We don’t buy CDs or MP3s, but stream it via a subscription services, such as Spotify and Apple Music. Last time you purchased a DVD? Streaming with Netflix, HBO or Amazon Prime, are the answer. Need razorblades, tights or a local vegetable basket? Even here you can purchase a subscription and receive new products every month. In short: Many businesses are moving away from pay-per-product or pay-per-service models to subscription models, trying to own the relationship with the consumer and secure a steady cash-flow.
The interesting observation is that more and more sectors start experimenting with the subscription business model:
In Switzerland, the annual train abonnement allows one to use any train, 24/7 and is nearly as old as trains themselves (precisely 1898), while other transportation providers are just starting to switch. Certain Volvo models will only be available per subscription as of 2019, starting at around ~$ 600 per month. The Volkswagen group, through Porsche and Audi, start offering subscription models for certain model ranges in some geographies: Pay ~$3’000.- monthly and drive any new Porsche you want on any day of the year. Saturdays one can choose a Cayenne for the family excursion, Sundays a 911 for a track day and weekdays a Macan Diesel for the daily commute. Ford, Cadillac and some exotic car clubs are already on the car subscription trend.
In the hospitality & tourism industry we similar tendencies can be observed. Ski-lift operators, under pressure by decreasing visitor numbers and massive fixed costs, are offering creative subscriptions to their installations, trying to secure a year’s revenue before the season has even started.
This we have seen for example in the Ski resort of Saas-Fe in Switzerland, who sold their annual subscription for CHF 222.- instead of CHF 1’050.-, given that a certain number of people participate. Their set threshold was passed and they yielded CHF 16 million at the beginning of the year – more than their usual annual revenue. Other resorts followed suite by offering a joint subscription that allows skiers to ski across several resorts under 1 single ski pass. 80’000 subscriptions were sold in advance and the revenue distributed across the resorts. All this cash flow received prior to the start of the ski season, allowing the operators to invest and upgrade their installations over the summer. A bold move that the Swiss tourism industry had not yet seen.
Hotels & Restaurants:
While timesharing models can be understood as subscription models, which are certainly not new to the leisure hospitality industry, we can very well imagine new models arising for hotels and resorts. We see potential for:
On the back-end, many services to hoteliers are available only through subscription services these days. Hoteliers rent computing power & management software, as well as cloud space. A young circle of entrepreneurs started the SaaS (Software as a Service) trend in hospitality, today most major companies offer similar services.
In private aviation the subscription based business model is not a new idea either, with many private jet services being subscription models for companies & individuals, while the commercial aviation industry has not yet explored this path in-depth. Imagine a model where businesses or individuals have monthly subscriptions for x number of flights in x class on x routes. Certainly an interesting idea for both airlines and business.
Jens-Henning Peters Consultant
Jens-Henning’s role at LHC involves the development of learning centres around the world, advisory for the hospitality and service industry, as well as the creation and implementation of new services and products for the company. He has joined LHC in 2015.
Next to a Bachelor Degree in International Hospitality Management from the Ecole hôtelière de Lausanne (EHL), Jens-Henning also holds a Diploma as Hotelkaufmann (Management Assistant in Hotel and Hospitality) from the German chamber of industry and commerce.
Growing up in a family of restaurateurs, Jens-Henning has worked in various positions for leading hotels, restaurant and catering companies in Germany, Switzerland and Denmark, building a solid understanding of the operations in luxury hospitality organizations.
While studying at EHL and throughout industry internships he has acquired various experience in consulting projects. Bringing his entrepreneurial spirit to work, Jens-Henning has helped clients to reposition their portfolio, developed hotel and F&B concepts and held workshops and courses for various topics. His mother tongue is German, he speaks English fluently and is currently studying for his working proficiency in French.
When not at LHC, he enjoys riding his motorcycle and taking photographs. Jens-Henning is a passionate cook, always trying out new recipes he discovers on his travels.