Building on Its Strengths

Virtuoso touts formula for success and spotlights marketing alliances, initiatives at its annual Travel Mart

By: David Peterkofsky

LAS VEGAS Lauding his group’s members for finding ways to thrive amid a “vicious cycle of consolidation and commoditization” in the industry, Matthew Upchurch, CEO of agency marketing group Virtuoso, outlined current programs and upcoming initiatives at its annual Travel Mart here last week.

Upchurch said the 267-agency group’s emphasis on customer service over order-taking and the quality of a trip over its price continues to resonate with clients, particularly with baby-boomers who remain more concerned with the overall value of a vacation than its price tag.

“Ultimately, people don’t travel because of price,” he said. “They travel because of experience.”

Virtuoso’s conference, which drew 1,700 agents and suppliers, came hot on the heels of stories in Conde Nast Traveler and Travel & Leisure that tout the expertise and service levels of many Virtuoso agents.

“This is something the boomers want,” Upchurch said, referring to Virtuoso’s high-touch approach to travel sales. “The cover of Conde Nast proves it.”

Upchurch and other Virtuoso executives spoke of the ongoing challenges that come with creating a luxury-travel brand, including a double-digit drop in international leisure travel among U.S. travelers and a dwindling number of agency locations. But they also pointed to recently launched initiatives designed to draw more high-end leisure travelers to Virtuoso agents.

One such alliance is with the Neiman Marcus department store chain, with which Virtuoso has developed a customer-loyalty program that lets shoppers redeem points for trips through Virtuoso suppliers and agents. Virtuoso launched the Neiman Marcus alliance earlier this year, and it announced at the Travel Mart that Silversea Cruises and Intrav will be the program’s official supplier partners in 2003.

Kristi Jones, Virtuoso’s president, noted the similarities between Neiman Marcus’ and Virtuoso’s respective clienteles, pointing out that roughly two-thirds of Neiman Marcus frequent-shoppers are females with a net worth of more than $2 million. The store also offers Virtuoso specialists gift cards to give their top clients.

Jones offered tips on how agencies can proactively enhance their profitability, such as identifying the agency’s most active clients; assigning only one sales person to each client; and tracking each client’s “profit contribution” to the agency.

Perry Lungmus, Virtuoso’s senior vice president of marketing, demonstrated the group’s ability to customize brochures and other collateral using its variable data printing technique. Virtuoso can customize, say, the text and images in a Classic Custom Vacations brochure on Hawaii based on a particular client’s interests.

Virtuoso will soon offer similarly tailored e-mail marketing in its Great Escapes e-mail blasts, again based on the client information agents enter into their databases.

On another tech development, the recently redesigned agent site added a promotion-search tool that lets agents zero in on destination- or supplier-specific specials, as well as an online contact-database tool.

Lungmus added that Travel + Life, one of several publications Virtuoso distributes directly to consumers, will soon be available on a subscription basis to the general public, potentially bringing new sales leads to Virtuoso specialists.

Membership Changes

Jones revealed that this year Virtuoso changed its agency-volume requirement for membership. In the past, the group required member agencies to post at least $1.2 million in annual sales. The requirement now is a per-agent minimum of $150,000 in sales and a client list of at least 200 households for each agent.

The old method of qualification, Jones said, “rewarded the consolidation of volume rather than the execution of knowledge” among individual staffers, whereas the implementation of the new requirement has “forced the agency to ask, ‘Who’s my talent?’”

Upchurch noted that industry consolidation has fueled a drop in the number of membership applications Virtuoso has received this year. But on the rise, particularly since Sept. 11, has been the number of independent specialists joining Virtuoso agencies, along with requests for Virtuoso’s help in matching independent contractors with host agencies, he added.

Upchurch downplayed member complaints about, the redesigned site for member agencies. The site, which was relaunched in June, allows users to bundle itinerary information along with hotel or cruise-ship photos and distribute the information to clients.

Some agents said the site is now more cumbersome to navigate. But Upchurch contended that the new site is “trying to do 10,000 more things” than the previous agent site and that agents will gradually adjust to, and embrace, the more powerful trip-planning tool.

Virtuoso also announced plans to launch a consumer advertising campaign in 2003 that will target affluent travelers. The promotions, to appear in upscale magazines, will feature specials created by Virtuoso suppliers and the group’s Web site, as well as a toll-free number.