|From left: Peter Bates, president, Strategic Vision; Mark Conroy, president, Regent Seven Seas Cruises; Dan Mahar, CEO, Tauck; and Susan Helstab, EVP of marketing for Four Seasons.|
The Virtuoso International Symposium, held in late April on the Regent’s Seven Seas Mariner, was a jet-setter’s delight, since it allowed participants to fly in to Rome and disembark in Monte Carlo. The two destinations are fabulous jumping-off points for visiting other locales in their regions and besides, who doesn’t want to hang out in Rome and Monte Carlo at the very least?
But first, the facts about the symposium: 350 were in attendance; that’s a combination of luxury travel suppliers and Virtuoso agency owners and managers. The Mariner was an ideal venue for the event, since it kept everyone fairly close together for great networking in a swanky environment. Even so, we found ourselves mentioning, along with others, that despite the intimate environment, there were still people we didn’t have a chance to see at all, even at the end of four days.
But that’s the nature of the luxury travel environment, there’s never enough time to see it all.
The core of the symposium was a general session that sought to explore “Today’s Travel Distribution Channels and the Elevated Role of the Travel Advisor.” Peter Bates, president of Strategic Vision, moderated the entire session.
“Luxury is back,” said Bates. That was clearly no secret to the advisors present, in fact, they had already heard the news at the group’s annual Travel Mart last August, when Virtuoso’s management team revealed that the network in 2010 had shown a 31.3 percent increase in annual sales over 2009. That figure is significant because 2009, a year in which the U.S. economy was on its way into a deep recession, saw a sharp 25 percent decline in sales from 2008, which is still seen as an excellent year in the annals of travel sales.
The figures were the effort of the entire network, which comprises more than 300 independent travel agencies in 22 countries (with 650 locations including branches).
Nevertheless, Bates was able to cite that consumers overall still think that when they use the Internet to research travel, they are way smarter than any-one else.
“Travelers feel doing their own planning is empowering and that the Internet gives them all the answers they need,” said Bates. “They believe using a travel advisor adds to the cost of their trip and do not understand the value that an advisor adds, or that an advisor is even readily available.”
Despite that fact, the travel agency business is still very much a viable network. In fact, it’s estimated that travel advisors sold $90 billion worth of travel in 2010 and will sell $100 billion by 2013, said Matthew Upchurch, chairman and CEO of Virtuoso. These are not off-the-shelf sales. Research indicates that “affluents” who use travel advisors spend 97 percent more on vacations. In fact, Virtuoso’s preferred suppliers ranked Virtuoso member agencies as the sales channel responsible for generating the highest average daily rate (ADR); second in terms of producing the highest net value per booking, and tied for first (along with the supplier’s own website) for fostering client loyalty.
Susan Helstab, EVP of marketing for Four Seasons Hotels and Resorts, who earlier revealed that Four Seasons is spending a whopping 50 percent of its marketing budget on interactive media (think social media) and its websites, echoed the fact that travel advisors bring more value to the equation, noting that from her perspective, clients who book through advisors average a 75 percent higher ADR.
This is all very encouraging, no doubt, but Upchurch emphasized that luxury travel advisors still need to bring it and show their worth when they’re working with their clients. “The only way we can make more money is to elevate the customer experience so that they are willing to pay more,” he said.
Back to the fact that luxury is here to stay: Stephen Kraus, chief insights officer of IPSOS, which produces the Mendelsohn Affluent Survey, cited that his research shows that there is an uptick in optimism among the affluent. Some advisors took umbrage at the fact that the study defines the affluent as household incomes that make $100,000 a year, however, Kraus double backed with the fact that many consumers have not had a salary increase over the past few years (thanks to the “great” recession) and that the number is indeed reflective of the general populace.
Specifically, one-half of the affluent folks out there are optimistic about the economy going forward and one-third are pessimistic.
Who has survived the recession best of anyone? Those retailers, such as Hermes and Louis Vuitton, who have not discounted or outsourced their fine products and who are able to explain their craftsmanship, said Kraus.
Another fun fact for retailers: Luxury consumers are suffering from “frugal fatigue,” a syndrome in which rich people decide they are tired of thinking about the value of every purchase they make. In other words, they’re longing for the good old days (think early 2008) in which they could spend frivolously, without considering price.
One of the biggest changes Virtuoso proposed at the symposium was changing the annual meeting, lovingly known as “Travel Mart,” to “Virtuoso Travel Week.” While this may seem trivial to some, advisors for the duration of the event were correcting themselves every time they said Travel Mart in reference to their upcoming meeting this summer. “I’m not sure I can get used to this,” was the general consensus, but they were all smiling when they said it so we’re sure they will.
The move is more than a name change; it aims to expand an annual event that takes place at the Bellagio in Las Vegas each mid-August between advisors and suppliers (last year 300,000 individual appointments took place between 1,680 travel consultants and 1,605 vendors) to one that includes consumers as well. This follows a strategy Virtuoso launched last year that aimed to “close the gap between the consumer and the advisor.” Prior to attending, agency members were encouraged to alert their customers that they were coming to Travel Mart to meet with travel suppliers from around the world. They also put out notifications on their Facebook and Twitter accounts, telling their followers that they were in Las Vegas and ready to ask specific questions of travel representatives on their behalf.
Expect to see all of these efforts expanded at the new Virtuoso Travel Week, when consumers may very well be welcomed to the mega event, or Skyped in to partake in a virtual meeting with their travel advisor and an international supplier, who can provide one-to-one counsel in helping to create a customized itinerary.
|Agents meet with suppliers onboard the Regent Seven Seas Mariner.|