Founded in 2012, Skift has been “fanatically focused” on providing business intelligence, including research, trends, and news, to the travel industry. From their humble beginnings eight years ago to a New York City office with 40 employees, Skift has become the leader in global travel intelligence, working with clients like MasterCard, Hilton, Hyatt, Virtuoso, Google, and Lyft.
Skift CEO and founder Rafat Ali is well known in the travel industry. In fact, earlier this week, he was named one of LinkedIn’s Top Voices of 2020 for sharing his insights into the coronavirus pandemic’s impact on travel. We had the privilege of hosting Ali as a keynote speaker at Subscription Show 2020, where he shared his company’s personal experience with the pandemic. Part of that experience was finally making the decision to adopt a subscription-first strategy, something that had been in the works for a while. Before we share Skift’s insights, let’s explore the company’s history.
Before COVID
The travel intelligence company started out as a daily news site for the travel industry covering various segments of the global travel business. Skift’s primary audiences include people who work in the travel industry like Expedia, hotels, cruise lines and tour operators. Their secondary audiences are those who want to do business with the travel industry, including banks, research firms, consultants and technology firms.
The company’s revenue comes from a mix of custom advertising from Skift’s in-house brand studio, event revenue from tickets and sponsorships, sponsored content, sponsored sessions at events, and research and reports on industry trends. The company’s first subscription product was launched in 2015. It started out with paid trend reports available for $25 each, and those evolved into a subscription product with different tiers for clients based on their individual needs.
“One of the pluses of being a young company is that you can make decisions really quickly,” said Jason Clampet, Skift co-founder and chief product officer, of being able to transition from paid one-off reports to subscription products.
About two years ago, Skift acquired Airline Weekly which sends out a weekly PDF every Monday that shares important travel news for the week ahead. An annual individual, single license subscription is $995; a monthly solo license is $45 for the first month, and $95 per month thereafter. Group and enterprise subscriptions are also available.
Airline Weekly features a range of aviation related stories including Weekly Skies, Sky Money, Media, Fleet, Land Strip, Routes and Networks, Marketing, a weekly feature and more. (Preview the latest issue here.) Clampet said the company learned a lot from the Airline Weekly newsletter, and they built their next subscription based on lessons learned.
COVID’s impact
Fast forward to early 2020 when the coronavirus pandemic reared its ugly head, starting in the Far East and gradually moving westward to the United States. With clients all over the world, Skift saw the impact on the industry and within their own company almost immediately. Some of their primary clients imposed massive layoffs, as everyone tried to figure out what was coming and how to react.
“Travel was the most affected sector on the planet,” said Ali at Subscription Show 2020.
While Skift itself was impacted, they wanted to support the travel industry the best way they could – by providing them with the latest information about what was happening and how it would affect the industry. From April through early June, Skift hosted an online series of events ranging from one-and-a-half to three hours long on topics like travel marketing, destinations and loyalty. Knowing the dire financial situation some of their clients were in, they offered a “pay what you want” model. Some clients couldn’t afford to pay anything, but a large number paid anywhere from $5 to $100 to attend.
“The type of information we provided helped people understand what was going on,” Clampet said.
Internally, Skift had to make their own adjustments. They furloughed about one third of their staff, and between March and April, Skift had lost 80% to 90% of their revenue.
“It was brutal,” said Ali.
One way Ali got past the fear of surviving COVID was looking at the worst possible outcomes and identifying possible solutions.
“I’m a big fan of visualizing worst case scenarios to lose the fear,” Ali said. “You have to lose the fear of being judged. You can’t show panic.”
Shifting their own business model as COVID continued to spread, Skift transitioned from live events to virtual ones. A March event originally scheduled for Madrid moved online and was held in June instead, a July event in Singapore was held online in October, and Skift’s three-day annual event which draws about 1,100 attendees also had to be moved online.
“It was three months of learning what our audience needed and how to best communicate with them,” Clampet said.
Launching Skift Pro
Though the company had tried several subscription products in the past, Ali and Clampet felt the time was right to make the move to subscription first, meaning that subscriptions would become their primary revenue stream. The company had been working on a paywall in mid to late 2019 for research, and it was ready to launch in mid-March, but the company opted to pause the paywall temporarily and adopt The Guardian’s subscription model which gives readers subscription options and the ability to make contributions.
That initial trial was successful, so Skift moved to the metered paywall in July 2020. Visitors to the website can read up to three articles for free every 30 days. After that, most content is only accessible to subscribers. Skift publishes six to eight travel articles per day that include original reporting and exclusive video views from Skift events. Also, executive editor Dennis Schaal writes a weekly column for subscribers.
“Our daily news product is the core of what we do,” Clampet said. “We always saw that as the backbone.”
Skift Pro does not offer a free trial. Ali joked that the company had the longest free trial ever – eight years – but it was the something they had to get past to launch Skift Pro. As Ali explained it, people don’t understand how to value information, but quality journalism is valuable and worth paying for.
“We had to lose the fear of ‘we were giving it away for free before,’” Ali said. “Who cares now? You have to think of it as building a giant funnel, and you just have to jump in.”
Why subscription first?
Clampet said that subscriptions are the best relationships you can have with readers. You deliver information to them to help do their jobs better and, in exchange, your news site is directly supported by readers. It is essentially a balanced give-and-take model where each party gets something of value.
Pricing and payment frequency
To prepare for launch, Skift researched other B2B publications including the Business of Fashion, Digiday and STAT to identify price tolerance of customers and the value the publishers were delivering for that price. At launch, Skift Pro was available with either an annual subscription or a two-year subscription. Based on client feedback, in August, Skift began offering a quarterly subscription option and local pricing in top markets (e.g., U.S., Canada, U.K., Singapore, Europe.
On pace to reach subscription first goal by 2022
When developing the product, Skift targeted 2022 as the year when subscription revenue would surpass all the company’s other revenue streams. Though Clampet didn’t share specific subscriber numbers, he said that Skift Pro has surpassed its goals so far. He also noted that Skift’s website typically gets 1 million unique visitors to their website each month.
“We are happy with the results. We have lost a little traffic and have increased revenue dramatically,” Clampet said.
Marketing Skift Pro
Thus far, Skift is not doing any “off-site” marketing, because they don’t know enough about user habits to make such efforts worthwhile. As they gather more data, that will change. For now, Skift is marketing to website visitors and to their existing readers. Skift sends out a daily newsletter to more than 100,000 readers, many of whom will click through to the website and see the invitation to subscribe. Once Skift has gathered useful user data, Skift will likely market through additional channels.
Complementary products
Clampet is particularly excited to see how Skift’s different products work together. For example, this week, the company hosted the inaugural Skift Aviation Forum for $95 per ticket. Subscribers to Airline Weekly, however, were invited to participate in the forum for free. Research subscribers get discounts on different events, and clients can purchase a replay pass to watch on-demand events after they’ve happened, an added value for subscribers. Skift offers a range of products that meet different subscriber needs while complementing each other.
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We don’t know what 2021 holds for the travel industry, or any industry for that matter, but companies like Skift who are innovative, are prepared to try new things, and are willing to put a value on their work have a better chance of surviving than those who allow fear to paralyze them.
