How Much Would You Pay For a Loyalty Membership?

by Robert McGarvey

Don’t think the question is academic. Here’s a firm prediction: we will all be seeing more loyalty plans that involve fees and probably we will pay to join some.

Part of the reason: Wall Street loves recurring fee income. Zuora, which bills itself as an expert on the subscription economy, says: “To investors, the  primary appeal of recurring revenue models is the value of predictable recurring revenue, particularly in comparison to one-time transactions. For example, a $20 million dollar company with eighty percent recurring revenue can count on sixteen million dollars at the beginning of every year. That figure is stable and predictable. Management can plan and invest accordingly.”

Yep.

Already we are chronically pinged to join Uber One ($9.99/month – don’t ask me what the bennies are; I haven’t joined), DashPass via DoorDash (also $9.99/month, altho free to some Chase credit card holders), Panera’s Unlimited Sip Club ($11.99/month buys a free beverage every two hours), and now hotel operator Ennismore has launched its Dis-loyalty club where members pay $18/month to belong.

Watch: if this Ennismore play catches on, many more hotel groups will follow suit. They are desperate to wow Wall Street and a loyalty program with a membership fee would be just the ticket.

And Dis-loyalty just may catch on. Its monthly fee is high but it builds in real value for users.

First however, what’s an Ennismore? Part of Accor, it’s a collection of 75 hotels and 150 restaurants including The Hoxton, 21c Museum Hotels, SO/ Hotels, SLS, and Mama Shelter. Dis-loyalty perks are real. 50% off just opened hotels, 20% off a first stay at a hotel, 10% off return stays, 10% off food and drink at the 150 restaurants, a daily free coffee or tea daily at any of the restaurants and bars.

Did I mention there are no blackout dates?

Notice: you don’t have to earn points, or even track them, to be eligible for a benefit. If the benefit is part of the program it’s yours for the taking.

Live near an Ennismore property, for instance, and a daily coffee would put you richly in the black on a membership. Add a monthly restaurant meal and also a hotel stay and, suddenly, Dis-loyalty is like winning the lottery.

For Ennismore it’s a win too: that member doesn’t need to be marketed to.

And, again, investors love this kind of recurring income.

Personally I belong to a number of loyalty programs: Bonvoy, Hilton, Avis, National -all with elite status via Amex Plat. I also belong to Delta Sky, American Air, Southwest frequent flyer programs. I pay for none.

Would I pay for any? Sure, for the same reason I pay for Amex Plat – if the program paid for itself.

But only if it did.

I would not pay for any that I belong to because I just don’t get enough value to justify it.

But Ennismore’s Dis-loyalty definitely does deliver value if you work it: “As a lifestyle company, with roughly 40% of our gross revenue coming from restaurants, bars, and coffee shops, once you do the maths, it doesn’t take much for you to work out the give-get,” Sharan Pasricha, Ennismore founder, told Fast Company.

One hitch with Dis-loyalty is that hotel reservations have to be made at the Dis-loyalty website. Accor Live Limitless points also are not earned.

But for people who already stay at Ennismore hotels and live near restaurants and already use them, at least a little, Dis-loyalty is a deal. The Fast Company writer notes that Ennismore is opening a new resort this fall in the Maldives – with rates starting at $1282. Stay just two nights at 50% off is $1282 in savings – which would pay for 5+ years of Dis-loyalty.

And the name itself encourages that. It’s called Dis-loyalty because it’s aimed at people who like to try new things, said Pasricha.

I can definitely see a US based boutique hotel group embracing this idea – perhaps Ace or the Standard. Maybe a prolific restaurateur – maybe the Bobby Flay club or the Danny Meyer Pack. The key is to load a program with enough perks to make membership pay for itself.

This is a trend I expect to explode – if the hoteliers don’t screw it up.