Behind the Scenes with Vacation.comJune 10, 2010 By: David Eisen Travel Agent
Vacation.com’s president and CEO Steve Tracas says the company has more than 6 million names in its database of travelers
Vacation.com’s headquarters are in Alexandria, VA’s Old Town district— which appears to be as quaint and old-fashioned a neighborhood as you’ll find in the U.S. It’s a bit ironic: The travel agency marketing heavyweight— by far the largest consortium operating, with more than 5,000 members— has some of the newest, most cutting-edge tools and services going today.
Travel Agent caught up with Steve Tracas, Vacation.com’s president and CEO, an executive bullish about the prospects of his organization, whose parent company is Amadeus. Undoubtedly, so are members, who, aided by Vacation.com’s marketing know-how, are able to concentrate on what they do best: sell travel. “We provide the services and products that they could never afford to do themselves,” says Tracas, who joined Vacation.com in 2006.
They do it through many innovative ways, one of which is their highly targeted marketing services that give each member agency a distinct presence. Vacation.com does this through its Engagement program, enabling its some 100 preferred suppliers to reach consumers via a travel agent call to action. How does it work? Members provide their client lists, which Vacation.com, in turn, uses to customize direct marketing material. “We have over 6 million names in a database of travelers,” Tracas says. “Probably no consortium has half the names we have.” Vacation.com then runs the names through a cohort segmentation model. “We know their demographics and psychographics and things like their discretionary income,” he explains. “The suppliers are paying for this marketing and want to know it’s effective. They want targeted, direct mail to consumers that have the propensity to buy.” It’s a boon for the postal service: Vacation.com sends out approximately 18.6 million direct-mail pieces each year. “I think it’s the most effective way to market to a consumer,” Tracas says.
Tracas delivers the Vacation.com message to agents at last year’s member conference
Working with preferred suppliers on behalf of its agency members is also a huge part of what Vacation.com does. It’s about bringing sales to suppliers, commissions to agents. As vice president of industry relations, the task of managing and overseeing preferred supplier negotiations and relationships falls to John Lovell, who joined Vacation.com in 2002. “We are fortunate to work with some of the best-known brands in the travel industry,” Lovell says. “Our relationships with our preferred partners are built around increasing value for the supplier and providing products and destinations that our members’ clients demand.”
“We go out and negotiate on their behalf and bring that volume of sales to bear on the supplier, while getting commissions in the hands of agents,” Tracas says. Members also receive higher commissions based on Vacation.com’s preferred supplier relationships. “It all starts with the enhanced commissions and those preferred supplier relationships and that’s what we build the business around,” he notes, adding that they look at their preferred suppliers each year to see if they are continuing to meet their and their members’ needs. “We may have a turnover of five or six each year,” he says.
Vacation.com’s Engagement campaign is so personalized that agents have the ability to craft their own distribution strategy through Vacation.com’s AgentNet portal. They can pick and choose which suppliers to sell. “Engagement Select is the pinnacle of personalized direct marketing,” says Stephen McGillivray, Vacation.com’s vice president of marketing, whose role includes overseeing marketing initiatives for preferred suppliers as well as heading the Engagement marketing program. McGillivray knows the travel agent community well, having been a past ASTA executive.
Vacation.com’s Power of Partnership awards recognize the company’s agent members and supplier partners. Here, with the 2009 supplier winners are (seated, left to right) Vacation.com’s Stephen McGillivray, Steve Tracas and John Lovell
Best of all, every marketing piece that goes out is customized so the agency’s name is on it as the call to action. Never will you see the Vacation.com name. “I think that’s the biggest difference between us and others: We are behind the scenes,” Tracas says.
Vacation.com’s reach goes well beyond marketing. Members have exclusive use of the company’s mix of amenity programs to ensure a client’s vacation is that much better. Take cruise, for instance, a huge chunk of Vacation.com members’ business. Vacation Vignettes is a cruise program, which includes a concierge host (a Vacation.com member), an exclusive shore event and a private cocktail reception. Tracas says there are around 250 of these cruises each year. There are also about 800 amenity cruises each year. “A member will call and say, for instance, he or she has a client on a Holland America cruise,” Tracas explains. “That client, because he or she has an agent who is a Vacation.com member, will get an onboard credit—maybe a $100 spa credit or prepaid gratuities.” McGillivray adds, “This program is very popular among our cruise sellers because their competitors cannot duplicate it, giving our members a key advantage.”
Vacation.com’s Hotel Elite program is similar to Vacation Vignettes, but customized for hotels and resorts. “Our program features lower rates and higher commissions than hotel programs from other agency groups,” says McGillivray.
Agent education and assistance is also a Vacation.com trademark. There is an education calendar with listings of webinars—both supplier and product related. Recently, a Google webinar addressed how to maximize an agency’s website and how to perfect search engine optimization. “We had about 400 agents registered for that class,” Tracas says. Vacation.com will even help agents create their own websites. “Our job is to maximize each agency’s effectiveness,” he says.
A packed house during the General Session of Vacation.com’s 2009 meeting in Las Vegas
Unaffiliated travel agencies are paying attention. Vacation.com added over 140 new members in the first quarter of 2010 alone. That’s a big number: according to Tracas, the company brings in around 300 new members per year. With over 5,000 members now, can there ever be too many members? “I don’t think so,” Tracas says. “We are very scaleable. Our objective is to handle each member differently based on what their needs are.”
One of Vacation.com’s fastest-growing segments is luxury. Large sales volumes from a mix of high-end suppliers will raise any luxury profile. Their preferred suppliers include Crystal Cruises, Silversea and Regent Seven Seas on the cruise side and Kensington Tours, a pure FIT operation, for tours. “We have over $300 million in annual luxury sales,” Tracas says.
One of the reasons for Vacation.com’s success is its technology. EZguider, for one, is the company’s booking tool, which allows member agents to quickly compare similar products from multiple suppliers on one screen. Users can shop, quote and book from more than 500 airlines, 12 cruise lines, five preferred tour operators and multiple third-party insurance providers—all integrated into one passenger record and, as Tracas puts it, “all about increasing productivity.”
Another valuable tool attracting new members is the benefits calculator. The tool is located on Vacation.com’s newly redesigned www.joinvacation.com site and gives prospective members an estimate of the annual financial impact of a Vacation.com membership. Agents input four variables—annual preferred cruise sales, annual preferred tour sales, number of clients with postal address and number of clients with e-mail address—and immediately receive a dollar value based on their agency’s specific numbers.
Vacation.com is also there to try and cut through the clutter, says Tracas. “One of the challenges is all of the products and services that the travel agent has to sort through,” he says. “Our job is to pare it down, select and communicate to their clients those preferred suppliers. It’s about getting their telephones to ring.”
While Vacation.com is now a large operation, staying personal is key. Every other week, Tracas e-mails members updating them on what’s going on with the company and the industry in general. This tidbit bears mentioning: Every employee of Vacation.com, whether they are in graphics or accounting or marketing, owns and is responsible for 35 members. Meaning? “Let’s say we get an exclusive from Royal Caribbean,” Tracas explains. “If a member has booked Royal Caribbean during this period, an employee will pick up the phone and call his or her 35 agents and say, ‘Hey, I know you have got a lot on your desk but pay attention to this because you have a chance to earn really good commissions on this product and your client will really benefit.’”
Vacation.com has a lot in store for the future. “On the Engagement side we just struck a deal with TRAMS ClientBase that, with the approval of our members, will allow us to access the past travel trends of travelers,” Tracas says. “We’ll know where the traveler has gone and would like to go. That’s about the most targeted you can get.” He adds that they are currently signing up members for it.
The company is also now embedding videos in e-mails it sends out and, in the Canadian market, launching an agreement that leads to a business-to-consumer website for Canadian members.
This year’s theme at Vacation.com’s 12th annual conference in Orlando is “Time to Shine.” It’s “to play out the fact that last year was a challenging year, but this year has started really well,” Tracas says. Good news for travel agents who continue to contend with online booking portals and other non-traditional mediums. But, the uncertainty of the world (a volcanco in Iceland, for example) only enhances travel agents’ value. “The consumer has to realize that there are repercussions when booking online,” Tracas says. “The agents provide tremendous benefit.”