Is Edreams Prime subscription brilliant or a ripoff?

Questions can always be answered in several ways depending on which approach you choose to take. It depends on which side of the table you sit on.

What costs, advantages, and benefits are included in an Edreams Prime subscription? The subscription fee depends on which country. Its annual subscription fee is approximately 55 € and it's "free" for the first 30 days. The advantage for the customers with Edreams Prime subscription is that the subscriber will have excess to Edreams lower price marketing channel. Edreams is only a retailer so they are dependent on the net-price from the suppliers (airlines, flight-GDS, hotels, hotel-GDS).

Edreams has chosen to offer travelers a subscription model. The subscription model has become very popular in the digital era. But I wouldn't say Edreams Prime subscription has any resemblance to Amazon Prime, Netflix, Audiobook subscription, Tripadvisor Plus, Newspaper subscription, or Fitness Membership. These types of schemes give the customers value in some forms except lower prices. Edreams Prime subscription has only the benefit (value) of lower prices. And of course, there are some underlying causes to have a subscription model. But on the other hand, I think the subscription model is often the least bad model because it's the simplest payment model for all involved parties. Underlying causes with a subscription model could be that it makes revenue and cash-flow more predictable, some sort of "insurance" for the company (all ideas in a company aren't brilliant, but you have to try before you know), customers forget to unsubscribe and subscribers subscribe without taking benefit of the product/service.

Edreams heavily pushes their Edreams Prime subscription in the booking process and Edreams has a huge historical database with current and previous customers that Edreams can contact by phone or email to get them to subscribe to Prime.

Edreams/Opodo is a well-known brand for most Europeans even if many competitors have surpassed them. Edreams could use their famous history to their advantage to make a success today with their Prime subscription.

Some facts about Edreams Prime subscription

• The annual subscription price ranges from $46 (€40) to $68 (€60) depending on the country (source).
• 63% of Italian subscribers renew their Edreams Prime subscription (source). 96% of UK subscribers renew their Netflix subscription (source).
• Edreams had at the end of 2020 a total of 758.000 Prime subscribers (source). At the end of 2019, it was 450,000 subscribers (source)

The Prime subscription renewal figures are pretty bad. But 63% is better than 50% or 25% - predictable revenue stream for Edreams. It's very impressive that Edreams successfully increased the number of subscribers by 68% during a pandemic with almost no travel. Who begins to subscribe to such a service during a pandemic? Apparently, they do and it might have been even more subscribers if it wasn't for the pandemic.

The below screenshot is an example of how Edreams marketing their Edreams Prime subscription.

What problem do I see with this statement “discount on 100% of flights”? The customer can anyway get access to the discounted fares from OTA (Online Travel Agencies) competitors without the Edreams Prime subscription if the customers choose the meta-channel. On the Italian market, the meta channel (Skyscanner, Momondo etc) users will anyway get access to the Edreams Prime prices regardless if they purchased the subscription or not (see screenshots about the Italian market). What is a meta channel? Price comparison sites such as Wego, Skyscanner, Momondo, Kayak, Avionero, Jetradar and Jetcost etc.

And it's great thinking by Edreams that they have made Prime subscription "free" for the first 30 days. Some customers will believe that Edreams is "kind" just as Amazon Prime has a free trial period when you can watch just how many movies you want for free. With Edreams Prime subscription, you still have to pay for your airline ticket regardless if you purchased the subscription or not. The benefit for the Edreams subscribers is that they have access to the lowest Edreams price marketing channel. It's only a few percentages in "discount" of the total cost of the travel itinerary. The underlying cause with the 30 days free is that Edreams knows that many Edreams subscribers will forget to unsubscribe even if they don't want to continue to subscribe or in "unemotional mode" toward continuing to subscribe.

"There ain't no such thing as a free lunch."

Robert A. Heinlein

I would say that the Edreams Prime subscription gives the customer access to cheaper Edreams fares but not necessarily the cheapest fares among all OTAs. OTAs have different markups in different channels because of acquisition costs and competition. That is a strong reason why the meta marketing channel has become so huge - OTAs themselves embellish the greatness of meta with the lowest markup in the meta channel. Often OTAs have access to the same net-fares so it's a competitive race to the bottom due to meta business being so focused on PRICE - and customers love it. OTAs have different strategies and tactics to change the odds on meta to their favor. An example could be a ticketing consolidator arbitrage robot. It's lost opportunity revenues for airlines that OTAs take advantage of to gain competitive strength against other OTAs on meta (that is another story). Edreams Prime subscription is another way for an OTA to deal with the dependency on metas as Skyscanner etc.

On-site, how the booking process looks like regarding Edreams Prime subscription - Organic search (UK market)

In the below section, I describe how Edreams make the customers purchase the Edreams Prime subscription in the UK market. The subscription option is at the end of the booking process. I assume it's done with purpose because the customer has filled in so much data, so it has a "cost" to leave the booking process. The customer has to leave Edreams and do the same procedure again at an OTA competitor. So it's stiff to abandon the Edreams purchase and go to an OTA competitor and fill in the information again.

Step 1.

Step 2A.

Step 2B.

Step 2C.

On-site, A/B test by Edreams UK

Below is another search I did on Edreams, but the result page looked a bit differently compared to the above examples. The difference compared to the above example is that the user can see non-subscription prices if he/she makes an effort to do so (some sort of cost because the user has to actively spend some time to find it). I assume it's some sort of A/B test by Edreams. The Prime subscription is anyway marketed at the end of the booking process if the customer has chosen the non-subscription option on the result page.

On-site, how the booking process looks like regarding Edreams Prime subscription - Metasearch (UK market)

Edreams displays uncompetitive fares in the meta channel because they canˋt display their subscription fares in the meta channel. Itˋs a disadvantage with Edreams Prime subscription. The top 3 ranked OTA results gain 80% of the meta bookings. So the customers won′t even be aware of Edreams Prime subscription existence because most of them will never click on the Edreams result.

If I would have included the Edreams Prime subscription fare in the Momondo listing Edreams wouldn't even then been competitive. But it isn't that Edreams Prime subscription fare is far from competitive. So the Edreams Prime subscription model is a way for Edreams to become less dependent on metas as Momondo.

On-site, Momondo Italy redirected to Edreams Italy

The customers anyway have access to Edreams Prime subscription prices in the meta channel (Momondo). Then I don't understand the purpose of subscribing. I can proceed with the booking at a discounted price without adding the subscription.

Google and meta have encircled Edreams

I assume Edreams purpose with the Prime subscription is an effort to escape their encirclement by Google and meta. Other factors to also take into consideration are:

• Edreams competes against Google Travel and Edreams also using Google as a marketing channel. And Google Travel will gain strength.
• OTAs heavily rely on metas such as Skyscanner and Momondo etc for flight bookings. Trip.com has acquired the meta Skyscanner and the meta-OTA Travix (Budgetair). Edreams pays Skyscanner acquisition costs and Edreams is a competitor to Travix. And in some sense, Edreams is also a competitor to Skyscanner.
• Airlines will more try to take more traffic and bookings from OTAs. Airlines will try to bypass OTAs and in that way, the airlines will be able to save costs to OTAs and GDSs. With Edreams Prime subscription, Edreams has locked-in their customer and they are more or less untouchable (in travel context) for airlines or whoever.
• Other competitive subscription services will pop-up. The latest is Tripadvisor plus. Edreams has some sort of first-mover advantage in the subscription business in travel. I am pretty sure that more OTAs will follow, but this will cause a crowd-out effect that will make the subscription model a rather pointless activity unless you add real value for the customers. Customers will be more cautious about all forms of subscription offers. The subscription model could suffer the same fate as email marketing - many see email marketing as spam. Many companies have email marketing because all others have it regardless if it's profitable or not. A boring routine.

"Competition brings out the best in products and the worst in people"

David Sanoff

The thing is whenever there is a competition between businesses who are trying to sell a similar product, they will try ways and means to improve the product and make it the best product in the market. At the same time, all the ethics and morals of the people in charge take a downhill. The thirst for success leads to all the dirty business tactics that literally bring out the worst in people. I think Edreams Prime subscription manifests the above statement in a great way.

Edreams pays Google and meta (Momondo, Skyscanner etc) huge amounts of acquisition costs. Edreams want to get rid of their feeding "cookie monsters" at Google and Skyscanner. I assume the Edreams Prime subscription is a method to escape their encirclement. In the beginning, Momondo and Skyscanner were nice and polite towards OTAs. But as soon as they get the upper-hand against the OTAs (which they got), they begin to get greedy "cookie monsters" because they can due to the OTAs being completely dependent on Skyscanner and Momondo etc. Metas can put whatever demands they want on OTAs at a time of their choosing.

I would say that Edreams Prime subscription ulterior motives have an emphasis on the benefits for Edreams. That is a big difference if I compare Edreams Prime with Amazon Prime. Amazon Prime gives you value - movies if you like them. Edreams Prime subscription value is only limited to cheaper prices. And cheaper against what? Competitors or Edreams other marketing channels. Edreams is only a reseller or distributor - Edreams doesn't fly any airplanes or run any hotels so they can`t influence the fares in any certain direction. Edreams is very limited and restricted to the net-price the suppliers give them.

Some OTAs have similar marketing methods as Edreams Prime subscription but it`s not a subscription and it`s for free. Customers get a booking link to the OTA`s cheaper meta prices for future bookings and in exchange, the customer writes a Trustpilot review. So the OTAs hopefully save acquisition costs to metas (as Skyscanner etc) the next time the customer makes a purchase and the OTA gets Trustpilot reviews (and most of them are positive). Meta-OTAs are often successful in low price promises due to the entire business model together with the organization, processes, staff, and tech are focused on booking acquisition through meta - they are radar locked-on acquisition bookings on meta worldwide. Therefore meta-OTAs are likely successful with the lowest price booking link promise because the meta-OTAs can actually often live up to their promises - lowest prices. And hopefully, some customers use the booking link for future bookings so the meta-OTA saves acquisition costs to meta and Google.

The Edreams Prime subscription isn't about a fantastic subscription model that gives value to the customers, it's about transforming costs into revenues at Edreams. I don't see any tangible perks for the customers with Edreams Prime subscription that motivate a subscription model. But If you tell a lie big enough and keep repeating it, people will eventually come to believe it. However, this does not mean that it is desirable. In the end, it can create mistrust and contempt by customers. This can lead to an OTA subscription arms race and even greater exaggeration. On the other side, I can sympathize with Edreams because Edreams business isn't some sort of charity foundation. Edreams acts in a highly competitive market - the Travel Industry.

"Business is war. I go out there, I want to kill the competitors. I want to make their lives miserable. I want to steal their market share. I want them to fear me and I want everyone on my team thinking we're going to win."

Kevin O'Leary

Important points with Edreams Prime subscription

• Edreams call the customers just when they have booked and paid if they haven't purchased the subscription (Edreams could have abandoned this method). Customers are in "shopping mode". More vulnerable. Edreams has found a "weak spot" to acquire subscribers. Edreams could have some sort of rule table to decide if it's useful to call the customer - If the order value is more than 400 euro and it's a non-subscriber (only examples). Below is an example (could also be seen as anecdotal evidence). But in my mind, it follows the expected path an experienced OTA would take. Call the customer if the customer didn't opt-in for the Edreams subscription.

• Edreams subscription fee is approx 55 euro, it's nothing for most customers. Most customers want to be nice and please the customer service representatives. Most customers are polite and not evil. And Edreams uses this to their advantage to sell a service that the customers would have got from Kiwi, Gotogate, Expedia, Travelgenio, Budgetair or Bravofly etc without any subscription. Likely some of these OTAs will have lower fares than Edreams regardless of the Edreams Prime subscription or not. But the difference is that these OTAs have to pay approx 20 euro per booking in acquisition cost to meta (Momondo, Skyscanner etc). Edreams avoids acquisition cost to meta with the subscription model.
• Edreams have the customer's CC card stored. That is a competitive advantage. Many OTAs do not have that opportunity because they don't have high PCI-certification because they have no need to and/or it's costly. The entrance cost for a competitor to copy-cat Edreams is high. 
• Edreams get a predictable revenue stream with the Prime subscription model. That is why companies love the subscription model - predictability.
• Edreams increase the valuation of the company on nothing. Brilliant!
• Edreams Prime subscribers have paid for the subscription so they want value for money. I assume they are more likely to actually take advantage of the subscription if they have paid for the subscription. This also benefits Edreams because Edreams avoid acquisition costs.
• Edreams Prime subscribers are potential customers for competitors, but Prime subscribers are hard to gain because it's a transaction cost for the subscriber to leave the subscription relationship with Edreams. Edreams subscribers are pretty much "in prison" and in solitary confinement by Edreams, so it's a rather pointless activity for a competitor to try to make any "escape attempt" of Edreams subscribers. Especially when Edreams Prime subscribers (prisoners) likely don`t see themself as "prisoners".
• Some sort of "basking in reflected glory" by Edreams. Edreams Prime subscription associates themselves with known successful others such that the winner's success becomes the individual's own accomplishment. In this example, Edreams Prime subscription could be associated with Amazon Prime and similar success stories as Netflix and Spotify etc. But the resemblance between Edreams Prime and Amazon Prime is rather far-fetched.
• If customers already subscribe to Edreams Prime, it seems highly unlikely that these customers would have similar subscriptions at Expedia or Bookingcom. So it's crucial to get a first-mover advantage as Edreams. Subscription-based streaming service as Netflix, Apple TV, and Amazon Prime doesn't work in that way. There isn`t any mutual exclusivity. You can subscribe to several streaming services without any major mutual exclusivity issues.
• In Edreams Prime subscription mode, Edreams is able to marketing airlines that OTAs are disallowed from marketing in meta marketing channels. Delta, American Airlines etc.
• Edreams will get a better "negotiation position" towards their suppliers because Edreams subscribers are harder to move over to another reseller that is pleased with lower incentives.

Edreams buisness model

Edreams seems to focus on dynamic packages, and also a bit here and there regarding travel-related products (fragmentized). Dynamic package OTAs are something of the past. Dynamic package OTAs live in a similar mindset as music distributors in the 00`s that were fighting against piracy. Music distributors forced consumers to purchase expensive albums when many listeners only had the wish to purchase 1 song in the entire album. Spotify and similar companies changed the market to what the consumers wanted - pay for the track they like to listen to, not pay for the other dreadful 12 tracks in the album that they were never to listen to. Travelers book their flights and accommodation at different specialized OTAs that are really good at what they are doing. And it's hard as OTA to be good at both - flights and hotels. Edreams dynamic package business model is to bundle flights and hotels. Edreams business model could be described as being good in parts, like the curate's egg. But Bookingcom, Hotelscom, Airbnb, Kiwi, Budgetair, Gotogate, Kayak, and Skyscanner are better because they are top-notch at what they do - they are specializing. And why are they so great at what they are doing?

• They have removed everything distracting that we see at a travel agency
• They laser-focused on a well-defined part/activity of what we see at a travel agency

If a company removes everything that causes distraction of business model the company will get fewer problems with "step on somebody’s toes mentality" and crowd-out effects. In that way, the company can easier gather strength to accomplish business success and competitive advantages. But for Edreams that would be a completely new company if they abandon the dynamic package model. With a clear business model, it's easier to reach success with your organization, staff, processes, and technology.

The below screenshot visually describes Skyscanner vs Edreams in Spain. Edreams has lost pace and momentum against Skyscanner that it specialized in flights.

Edreams dynamic package business model still works but is under attack from specialized OTAs that encircles Edreams. And I think this circumstance is a strong reason why the Edreams Prime subscription was launched. Regardless of the disadvantage with Edreams business model, the advantage with Edreams business model is that the entrance cost to start competing against Edreams is really high. But anyway Edreams seems caught between a rock and a hard place - the specialized OTAs/metas in either:

• Flights-centric OTAs/Metas (Kiwi, Budgetair, Gotogate, Travelgenio, Skyscanner, amd Momondo)
• Accommodations-centric OTAs (Bookingcom, Hotelscom, and Airbnb).

Conclusion

I have a hard time understanding why travelers should subscribe to Edreams Prime because it's a rare item/service and non-frequent product. If the traveler is a frequent traveler it makes more sense to become a member in a prestigious Oceanic Airlines Sapphire frequent-flyer program with access to lounge and fast-track. And Frequent-flyer programs aren′t a subscription, itˋs results of purchases.

I can understand if consumers have a Spotify subscription or "This week's vegetable box" because this is used on a daily or weekly basis. I also have some understanding of Tripadvisor Plus subscription because it's a premium product focused on travelers that travels a bit more frequently. The hotel guest is eligible for a gift by the hotel if staying at Tripadvisor Plus hotel.

I think the actual reason with Edreams Prime is cash-flow, predictable revenue and save costs to 3rd parties (metas and Google etc). I think Edreams Prime subscription is not so much about customer service, lower prices, and loyalty. Most customers never contact the OTA because the trip is most often a flight A to B and/or staying at a hotel - it isn`t rocket science customer service. It's easy to start fluffy discussions about customer-first and loyalty etc. But it's very far from the reality when OTAs like Edreams often have no impact on the actual implementation of the journey. Although I can understand that Edreams pushes on these factors as selling-points to marketing their Edreams Prime subscription. I can use a figurative expression regarding Edreams true intentions with their Prime subscription "let's call a spade a spade, not a gardening tool". The Edreams Prime subscription is a pretty good invented method for Edreams to escape their encirclement by Google and meta.

"Necessity is the mother of invention"

Plato

The problem I see with the Edreams Prime subscription is that I don't see the value for the subscribers. But I see a huge value for Edreams. There is not so much correlation between the value for Edreams versus the value for the subscriber. Regarding Spotify, Amazon, and Netflix subscriptions I can see some sort of giving and taking between the subscribers and Spotify, Amazon, and Netflix that make sense - there is some sort of correlation.

I think Edreams Prime is a great scheme for Edreams. It's brilliant thinking although I think the true intentions are dubious. Travelers are used as instruments by Edreams to get a competitive advantage against competitors and Edreams marketing channels (Skyscanner, Google etc). But the true intentions will never be told because it's too complex to describe for the man on the street or Edreams Prime subscribers. And it makes no difference to the average citizen, but it makes a big difference at the end of Edreams balance sheet. And sometimes "the end justifies the means". It's some sort of legal penny shaving scheme. Each individually Edreams Prime subscriber is rather irrelevant, it's the synergy of all the subscribers put together that will make a huge impact on Edreams revenues.

"The most dangerous of all falsehoods is a slightly distorted truth."

Georg Christoph Lichtenberg

I think marketing will be less important in the future. Instead, a good product at the right price will become more important. Good products can market themself. Then it's only good for Edreams to cut off the middlemen like Google and meta with the Edreams Prime subscription. But Edreams is also a middle-man or reseller. So it's important to become a less vulnerable middleman. In that sense, I think Edreams Prime subscription is a pretty good method to make them less vulnerable. The problem I see with Edreams business model is that they are not close enough to the actual "operator" of the hotels and flights. This is especially problematic for Edreams regarding hotels, Booking.com and Hotelscom are much closer to the actual hotel "operator". And Booking.com is a supplier to Edreams and also a competitor to Edreams.

Edreams has a good business model because it's expensive to try and copy-cat the business model. It's much that happens under the hood of Edreams and it's not an easy copy-cat. But there are better business models in the similar traveler segment of Edreams customers. Example Google Travel, Bookingcom, Hotelscom, Airbnb, Skyscanner, Skyscanner, Momondo, Kayak, Kiwi, Budgetair, and Gotogate. In the online era of the highly competitive travel industry, it might not be enough to have a GOOD product like Edreams - the OTA has to be the BEST otherwise you will not survive.

Edreams Prime subscription might be a great way for Edreams to make an escape attempt out of the encirclement by their marketing channels that also are competitors because Edreams pays them acquisition costs and at the same time competes about the same customers. Figuratively, I can put it like this "Edreams put their customers unknowingly in prison (Edreams Prime subscribers) so Edreams can make an escape attempt from their imprisonment by their prison guards (marketing channels and competitors)". 

From what I have seen of Edreams Prime, I think the Prime subscription is exceptionally well-executed by Edreams. It`s important to go 100% on the goal and not deviate from the goal when you implement things in a company. As a company, you must gather strength and put all of the strength in one place to be able to make a bridgehead - then your competitors will feel as if they are surrounded. Also important that all support-lines work like clockwork so you are able to keep the bridgehead and maybe even go further. Some companies like to smear out their forces to be able to risk-minimize, but the consequences of the risk-minimizing strategy could be the opposite - failure because you will not be able to make a bridgehead anywhere. The laser-focused competitors will outrun you everywhere. Especially if you are a reseller, it works a bit differently if you are the actual operator (an airline or a hotel). But the reseller and the operators interact with each other in an interesting symbiosis that is always changing.

Will the Edreams escape attempt with their Prime subscription be good enough? I doubt because the risk is that the break-out attempt comes to a halt due to Edreams running out of fuel (new subscribers etc). But if Edreams makes a beachhead with their subscription model it's a brilliant and successful attempt because many of their competitors will then feel that they are surrounded. Edreams can also CHANGE the subscription model/business model when they run out of new subscribers.

It`s hard to ban subscriptions because different people have different preferences. A way to protect the customer against doubtful subscriptions would be that the customer actively has to confirm the subscription after the end of the trial period. I think Netflix and Amazon Prime would have had nothing against my proposal. And maybe once a year the subscriber has to confirm the subscription otherwise it will be put on hold and no money drawn from the subscriber`s account.

P.S. - First time reading my posts? Thanks for taking the time to stop by! If you enjoyed reading this article, you may also like:

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