Scott’s Cheap Flights has built a loyal fan base of free and paying subscribers who look forward to the company’s emails featuring top travel deals, including coveted mistake fares that happen on occasion, usually owing to a technology glitch.
In 2015 Scott Keyes, the company’s namesake, turned his passion into a business, in which his mission was to “be that good friend who knows how to find the best deals.” It worked. Scott’s Cheap Flights is now a multimillion-dollar company and employs more than 30 people. The year 2020 was supposed to be bigger and better than ever as the company planned to grow its community through paid advertising.
Then, of course, the pandemic hit, and those dreams of scoring a deal to Rome or bargain to Brazil disappeared when borders closed and international travel came to a halt.
“I remember sitting in San Francisco last March and seeing the news that the NBA season was being suspended due to the coronavirus,” Keyes tells Fortune. “I realized this was something that was going to impact every facet of our lives, especially a company like ours. There was a real fog of war aspect. You didn’t know what was happening, and with imperfect information, it was a unique challenge I had never encountered.”
So what is a founder who employs a few dozen people and has millions who look forward to his daily emails supposed to do when his entire business is upended? Keyes, in consultation with Scott’s Cheap Flights CEO Brian Kidwell, decided to hit pause.
While airlines drastically reduced their schedules, Keyes knew promoting travel during a global crisis was not the right idea. In the short term, he says, the best way Scott’s Cheap Flights could serve its community was by being a consumer advocate, free of charge.
“One of the areas [in which] we realized we could be helpful is guiding and advising what is happening in travel and how to stand up for your rights as a consumer. One of the ways that tangibly popped up early in the pandemic is people who had flights canceled,” Keyes says. “Some airlines were trying to offer vouchers, but people are legally entitled to a refund. Airlines knew what the law was, but the average traveler does not. This was a perfect scenario where we can be that good friend helping.”
The company also made several strategic decisions to help give it a longer runway to hopefully survive and thrive despite the travel downturn. Helping consumers added to their brand loyalty, but the company considered what else it could do for its readers.
It was unclear when international borders would open and overseas travel would be safe, so Scott’s Cheap Flights decided to start curating the best domestic travel deals, letting people know when there was a chance for a getaway, albeit a little closer to home, along with the necessary safety protocols.
“Pivoting to meet our customers where they were gave me so much confidence,” Keyes says. “We were in a precarious situation with international travel being locked down.”
Subscription revenue, no different than Spotify or Substack, is the driving force that keeps Scott’s Cheap Flights afloat. The company doesn’t take commissions or kickbacks, which Keyes says is to assure subscribers they’re truly getting the best deals without any hidden agenda.
But asking people to open their wallets and subscribe to a travel website in the middle of a pandemic, not to mention amid job losses and economic uncertainty, is a tough ask.
Federal aid helped support Scott’s Cheap Flights during the toughest months. They received a Paycheck Protection Program (PPP) loan that Kidwell says offered them “a couple extra months of support” and prevented them from having to cut salaries or lay off their staff. Kidwell declined to share the amount of their loan, but according to public records, it is in the range of $350,000 to $1 million.
“Even if the business on the outside looked okay, you don’t know what the future holds or how bad it is going to get. One of the things we did early on was outline the order of operations on how we would get through this,” Kidwell says.
While Scott’s Cheap Flights was one of many companies to benefit from PPP loans, Kidwell says having some time on pause allowed him to rethink their subscription mode. The company switched from a monthly to an annual $49 membership, which boosted revenue and improved its cash position. It also offered a five-year subscription at a significant discount, which Kidwell says “thousands” of existing subscribers accepted.
In October 2020, after promoting the five-year premium option, Scott’s Cheap Flights says it had its biggest sales month in the history of the company, months before the vaccines were announced and when many states were still in lockdown.
“We were trying to get creative on how to generate revenue given the circumstances. We had people pushing us to pivot, but we wanted to stay focused. We had to find other ways of generating the revenue. We looked at our members, and they were sticking with us,” Kidwell says. “We wanted to find a way to benefit the company, but as a thank-you offer a discount. It was a win-win. They got to walk in for a low price, and we got to walk into the revenue.”
While the pandemic isn’t over yet, the vaccine will be available to all adults in nearly half the U.S. by April 15, marking one step closer to a return to pre-pandemic life. Many international travel restrictions are still in effect, but Keyes sees a travel boom on the horizon. And he’s ready to help people find a deal for their long overdue dream vacations.
“The pent-up demand is unlike anything we have ever seen. Folks have spent the last 12 months staying home and making sacrifices,” Keyes says. “You are going to see a huge surge in the trips to bucket list destinations we all dream about. That’s where we’re focusing our efforts now, finding those cheap flights.”
