Costco Travel, which has long been a thorn in the side of travel advisors, might very well be getting more expensive for its clients.
According to senior vice president Bob Nelson, who spoke during the company’s latest earnings call last month, after more than five years of steady membership prices, the clock could be ticking on an increase in the cost to shop and book travel at Costco
“Historically,” Nelson said, “we've raised fees every five to six years, with the last three increases coming, on average, at about the five-and-a-half-year time frame and our last increase coming in June of 2017.” That makes late-2022 the next logical time that Costco would boost membership prices if the company follows the same timeline as before. The last time Costco boosted membership prices, in June 2017, they increased $5 and $10 depending on what level of membership consumers had.
Nelson added that the team had “nothing more specific to report in terms of timing” and that announcing any increase right now, with inflation at a high, “is not the right time.”
“Given the current macro environment, the historically high inflation, and the burden it's having on our members and all consumers in general, we think increasing our membership fee today ahead of our typical timing is not the right time,” Nelson said.
Still, if Costco does follow its usual timeline, it could soon get more expensive to be a member at Costco and to book vacations through its travel division, which, again according to Nelson, is seeing heavy consumer interest coming out of the pandemic.
“With everybody pent up for two years and not traveling, yes, that business has taken off like mad,” he said.
Costco Travel, like so much of the industry during those early stages of COVID-19, suffered trying to keep up with the volume of customer calls as consumers tried to rebook or cancel vacations. The company’s travel division's Twitter account has not been updated since March 2020, a time when clients took to social media to complain about seven-hour hold wait times and poor communications at the company’s call center.
Since then, the company has continued to attract vacationers, in spite of customer service complaints, because of its lower prices—its travel department works just like the rest of its offerings in that it offers pre-negotiated discounted rates to its members. And while it continues to beat some direct and OTA pricing, there are more things to consider, even outside of the customer service.
For one, according to the Washington Post, those prices might not always be the best, especially for flights—one Costco member speaking to Washington Post said that airfare was cheaper booked separately, and another said that, even with the cost savings, not being able to upgrade airline seats because they were purchased as part of a package was a negative for him.