HelloVacay, a new travel company has launched an innovative product that offers lounge access during delays for $29/year. For this article, I interviewed CEO, Ryan Beachum, about the product and the company.
HelloVacay, and Its Product: VacayDelay
HelloVacay is a new membership-based travel company. Its first product, VacayDelay (not an affiliate link), is a service that sends members a text message with a QR code with lounge passes for travelers once an hour has elapsed since scheduled departure and the plane has not, in fact, departed. The lounge passes are good for registered travelers and up to four guests who do not have to pay for their own access so long as their trip has been registered in connection with the paying member.
The cost is $29/year and comes with unlimited usage for the year during any delay that extends 60 minutes or longer. Each lounge has its own hours but there is no time limit associated with the passes meaning that whether the delay is 60 minutes or 10 hours, members aren’t expelled outside of what is applicable to any other visitor.
The service provides access to more than 1,300 lounges worldwide which seems to indicate a partnership with Priority Pass though the company doesn’t advertise its partner.
The delay data is indicated by FlightStats software, and not the airlines. I clarified this because airlines don’t always update their departure boards as accurately as other data systems. I’m not mentioning any airlines in particular…
Interview With The CEO, Ryan Beachum
I arranged an interview with HelloVacay CEO, Ryan Beachum, this week and tried to capture more about the company and their principal product.
While VacayDelay is their first product and the only one available for sale, Beechum described the company as a private membership for those booking online. “Web 3.0 Costco for online travel booking.” The mission of the company is to provide affordable access in a way that hasn’t been marketed before, think more like an online travel membership, not just an OTA. HelloVacay aims to “be a travel companion” and intends to offer travelers membership at various tiers.
“VacayDelay is an a la carté democratization of something most people haven’t had widespread access to. Airport lounges have been limited to elite travelers.” Beachum said. He continued, “[HelloVacay] want[s] to provide a new user experience and a lot of benefits that are accessible in ways they haven’t been accessible before.”
He was speaking more to the benefits of the wider membership. When I asked him what he could share about those added benefits, he wasn’t ready to launch them all but he did mention,
“Private travel rates as well as benefits like airport lounge access, concierge service at Netflix style pricing” and that these benefits would be “Only accessible [to] members. There will be a lot of other benefits we will offer, whether it’s attractions, [etc.]”
In my own words, the company intends to be similar to a deconstructed premium credit card in terms of the benefits and services provided but without the hefty annual fees. Some of these benefits could be access to condo properties with a resort-style check-in, and offering a consistent stay.
In one of the advertisements I saw for the service, a badge indicated there was a tie-in with Priceline. I asked Beachum about this.
“We have a long history with Priceline/Booking.com” he said. He mentioned that he came from a Resortshare for rental distribution business prior to HelloVacay. He added that the partnership with Priceline makes the brand “able to negotiate private travel rates behind a paywall.” As with Priceline, the special rates are only available so long as obscurity remains and protects the vendor’s published rates; they must remain “truly private, unpublished rates.”
Finding The Right Traveler
The VacayDelay product has a very interesting market. For those who utilize travel insurance, they might receive compensation if their air travel is delayed or canceled (flight delay compensation can range from $100-500) but more work is required on the part of the traveler and it’s unlikely to reimburse flyers for lounge access.
For those at the very top end of the market, they may already hold a premium travel credit card that gives them access to lounges either those that the airline controls or that of partner airlines. So they aren’t really a target market.
For those at the value end of the spectrum, they are unlikely to buy something that increases their costs, they may not need, and won’t likely again throughout the year because they don’t travel enough. So that’s not a target market either.
Who does this product work well for? Beachum said HelloVacay is targeting the digital nomad community; those who want to work remotely and travel while they are working. “[HelloVacay] want[s] to accommodate a lifestyle that [digital nomads] are trying to live.”
I think there’s another market. Business people and those leisure customers that travel 3-4 times annually but do not live in hub cities could see great value. Cities like Austin, Columbus, and Kansas City come to mind. When I was flying from Omaha, Nebraska nearly every trip had a connecting flight. This is important when you consider that it doubles the total number of flights taken and the possibility of flight delays and cancellations. Instead of 6-8 flights/year, the aforementioned set would find themselves on 12-16 assuming connections. There are far more things that can significantly delay travelers from a late-arriving aircraft, and crew support, to bad weather, and airline cancellations due to mechanical issues.
If a flight is canceled, there may be compensation from the airline, meal vouchers, and other travel protections for the passenger. But for delays – especially rolling delays – being able to get away from the departure gate, grab a drink and a meal, maybe even a shower, is a welcome respite. For the client set I mentioned above, they are likely to get their money back and then some at some point during the year.
Innovation in the airline industry is fairly limited in scope, and this is an innovative product. It’s part delay insurance (not a regulated insurance product but a benefit if something bad happens – maybe you’re never delayed an hour during the year) and part capacity utilization for those lounges. Smart readers will wonder if this will lead to additional crowding at member lounges which would be a result of HelloVacay’s success and customer utilization. Because I personally hold premium credit cards, I am not a customer. However, if the company’s next products are as interesting as this one, maybe I will join the broader offering.
What do you think?