Luxury Escapes Puts $175 Paywall Between Members and Its Best Rates

Luxury Escapes charges members US$175 a year, plus a joining fee, for access to its best-priced hotel, tour, cruise and flight deals — and CEO Adam Schwab calls that paywall "transformational" for how the business runs.

The company, founded in Australia in 2013, now counts more than nine million members across Australia, the US, the UK, India and Asia. It layers its LuxPlus+ paid club on top of Societe, a free loyalty program. Schwab will expand on the model at the Skift Commerce Summit on November 11 at Apella by Alexandria in New York City, where speakers also include Abhinav Anand of Citi and Cindy Estis Green of Kalibri.

What does a paid membership actually change?

Schwab is blunt about the limits of customer loyalty in travel. "It's incredibly difficult to fully own a customer relationship," he said. "There is very little friction in travel relationships and customers will often move platforms based on pricing or inventory."

That admission matters for anyone selling travel. If price and inventory drive switching, the durable advantages are structural, not emotional. Schwab argues the loyalty programs still buy two things: higher purchase frequency and a broader product range — not just land and air, but experiences during and outside travel. Direct relationships also let the company email customers daily and keep engagement levels high.

The paid tier changes the economics further. "Aside from the steady revenue stream, it allows us to offer unique and incredibly priced products behind a genuine paywall," Schwab said. He contrasts this with what he sees elsewhere in the industry: "Lots of travel businesses have soft or even fake membership programs that probably don't protect partner pricing."

He frames LuxPlus+ as one of the few genuine network effects in travel — not to be confused with the scale advantages of large OTAs (online travel agencies) and Airbnb. The mechanism is simple: the more members the program has, the more products Luxury Escapes can negotiate access to, so each additional member makes the offer slightly better for everyone else. That's a rare loop in a sector where most "memberships" are marketing wrappers.

The takeaway: a paywall that actually gates rates gives suppliers a reason to hand over exclusive pricing, because leakage is contained.

How exposed is the OTA layer to AI agents?

Schwab's warning about AI booking agents is aimed squarely at intermediaries. The travel sector, he argues, is too insular — travel businesses study other travel businesses for innovation. He invokes Paul Volcker's line about banking: the only useful innovation the industry produced in twenty years was the ATM. In Schwab's view, the sector's failure to build a great trip planner product proves the point.

"The obvious existential risk for OTAs — and it's not news to anyone — is what impact agents will have on bookings," he said. "How replaceable is the OTA layer?"

He cites a line from Steve Hafner, Kayak's co-founder, describing Kayak as essentially a layer of user experience sitting on top of a bunch of data. If an AI agent can sit on that same data and compare it automatically, the UX layer loses its grip. "Agents have the potential to upend a chunk of travel bookings; the question is which chunk?" Schwab said.

His answer to that threat is exclusive inventory, exclusive pricing and brand. "The lesson is to avoid commoditisation at all costs, as without genuine moats, some form of new tech can wash away your business," he said.

The takeaway: any intermediary whose value is comparison and presentation — rather than access to deals agents can't find elsewhere — is the most exposed.

What should commerce teams do with this?

Two questions fall out of Schwab's argument, and both are measurable.

• Partner pricing. Schwab draws a hard line between a genuine paywall and membership programs that leave supplier rates exposed. Hotels and other suppliers offering member-only discounts now have a practical test: check which intermediaries' fences actually hold.
• Agent exposure. Schwab expects AI agents to take part of travel booking volume but leaves open which part. For revenue teams, the planning question is how much of their income sits on inventory any agent can compare side by side.

Luxury Escapes' own position is to answer both at once: lock rates behind a paid wall, and build a member base large enough to keep negotiating better ones. Schwab will lay out the strategy in person at the Skift Commerce Summit on November 11 in New York.