Visions of Virtuoso

Chat with Matthew Upchurch for any length of time, and you’re bound to hear the word “relevant” come up quite frequently. That’s not surprising, considering that Upchurch has made a career of remaining relevant in the face of change. Just take a look at Virtuoso, the luxury travel network that Upchurch heads as CEO. An offshoot of the first agency co-op in the nation, Virtuoso has become a global sales and marketing powerhouse by predicting trends, welcoming change and refining its focus if necessary.

In sum, remaining relevant.

The invitation-only network is comprised of more than 300 independent agencies and over 6,000 travel specialists in 22 countries across North and South America, the Caribbean, Australia and New Zealand, as well as 1,000 top travel providers and destinations. Name a prestigious hotel, spa resort, lodge or cruise line, and you’ll probably find them on the list of Virtuoso’s preferred suppliers. Indeed, more than 300 hotels worldwide are available only through Virtuoso.

Not only does the organization produce $4.2 billion in annual sales, it does something even more impressive: capture imaginations. With a name that conjures up luxury, service and exclusivity, Virtuoso according to many observers is seemingly a mutual benefit society. Member agencies receive a much-lauded array of marketing tools, technological support, specialized training and accreditation. Suppliers gain crucial access to a sophisticated, upscale clientele to fill their luxury getaways. And consumers benefit as well, in terms of specialized amenities and exclusive access to products ranging from luxury hunting lodges to outer space travel and elite MasterCard benefits.

“Virtuoso is the gold standard,” said Janet White, director of travel and leisure sales at Montage Resort and Spa in Laguna Beach, Calif.

No where is the Virtuoso dazzle as much on display as it is at Travel Mart, the organization’s annual trade show. This year’s event at the Bellagio hotel in Las Vegas drew a record 2,800 attendees from more than 100 countries. As in past years, the program generating the most buzz was the traditional session of supplier-agent meetings. Likened to a marathon speed-dating session, the event results in more than 260,000 one-on-one appointments. For suppliers such as Jeff Johnson, the Montage Laguna Beach’s vice president of marketing, Travel Mart’s meeting sessions underscore Virtuoso’s emphasis on relationships.

“I’d say the true value of Virtuoso starts with the relationships that tie each aspect of the network together. Suppliers understand that the agents have extraordinary knowledge as a result of intense and ongoing focused training. Agents also have amazing relationships with their clients. It all meshes together in one big circle,” said Johnson.

Wendy Burk, founder and CEO of Travel Dynamics in La Jolla, Calif., brought 16 of her agents to this year’s Travel Mart.

“It’s invaluable, in terms of the education, networking and motivational sessions that they offer. There’s really nothing else like it in the industry. No other consortia operates on their level,” said Burk, who joined Virtuoso at the behest of key suppliers. “I have thirty years experience in the travel business, and my relationships with my clients are already well established. But, Virtuoso gives them so much more. My clients clear wait-lists and enjoy special shore excursions, cocktail parties and other exclusive amenities. And the marketing pieces that Virtuoso sends out are unbelievable.”

Burk’s enthusiasm for the organization is typical of the loyalty Virtuoso inspires in its membership.

“You can’t beat the professionalism of Virtuoso. It’s the difference between a Timex and a Cartier watch. They both tell time. But, the level we’re playing at is much better for our client base. Suppliers know our clients are the best of the best and they treat us as such,” said Burk.

Without a doubt, the ebullient Upchurch is key to the Virtuoso success story. One of the travel industry’s most high-profile visionaries, Upchurch is known for his charisma, chattiness and boundless enthusiasm, which he express unabashedly.

“I love my job. I love the industry and what it stands for. I love the business model that we’ve created, the whole idea of entrepreneurs coming together to create a global business entity,” said Upchurch.

In order to understand where Virtuoso is heading, it’s important to first know where it came from. That’s where Upchurch’s background as the scion of an entrepreneurial family comes into play. Upchurch’s father, Jesse, owned a series of travel companies. One of the senior Upchurch’s businesses, Percival Tours, purchased Allied Travel, the oldest agency co-op in the nation, in 1986. The merger of the two companies created Allied Percival International, later API Travel Consultants. Matthew Upchurch’s first major role in the industry came at age 26, when his father put him in charge of the new company.

“I had the good fortune of having been on both the agency side and the supplier side,” said Upchurch.

Early on, Upchurch realized that the single biggest challenge of the new company was in providing information to the consumer. So, marketing became a key focus of API.

“By the early nineties, we had become very good at marketing to existing clients. But, the question was, how would we grow beyond our core clientele? Because of the size of the market, we knew the direct-marketing model wouldn’t be enough. We couldn’t afford to contact every household. We didn’t know what to do, so we started developing and testing consumer market research. We looked at the databases of our members,” recalled Upchurch.

Realizing that he had to transform the agency model from reactive to proactive in order to generate more sales, Upchurch implemented a number of innovations. He introduced database and direct-marketing programs targeting specific client segments. He launched various consumer publications. And, in the late ’90s, Virtuoso debuted the first intranet in the industry, called API.Net, the precursor for today’s acclaimed Virtuoso.Net.

“Matthew took a lot of risk, especially by introducing so much technology in the early days. A lot of agencies were used to doing business a certain way. There was a resistance to logging on to the intranet every day. But, Virtuoso has always realized where the future is,” said Montage Laguna Beach’s White.

Right about that time, Upchurch was struck by one of many “aha,” moments, as he describes them. Not surprisingly, it involved the quest to remain relevant.

“As I was reviewing client databases, I realized what was going to happen to the industry. The customer base was going to change dramatically in terms of the baby-boomer generation. This wasn’t just a lot of people with a lot of money. They were the counter-culture, well educated and well traveled. Even if we could get to them, how were travel agents going to be relevant to this group?” Upchurch wondered.

With the Internet revolution in full force, and the beginning of commission cuts for agents, Upchurch gave a now-famous corporate presentation that he entitled “Back to the Future.”

“I told everyone that I had bad and good news. The bad news is that without a doubt the percentage of travel booked by travel agents in every segment is going to drop. The good news is that travel in general is going to boom,” said Upchurch.

He was certainly right about the latter. The year 2000 was the high watermark of travel according to a number of indicators. That’s also the year Upchurch’s company decided to rebrand.

“When we talked about rebranding, we specifically didn’t want a name with the word ‘travel’ in it. We saw our job as being in the life experience business and travel as a conduit,” said Upchurch.

The name Virtuoso, with the tag line, “Specialists in the art of travel,” seemed a perfect fit for a company poised to take the new millennium by storm. Then came Sept. 11 and a crisis that many in the travel industry never recovered from. But, Upchurch and Virtuoso managed not only to survive but to thrive.

“I’d say that one effect of Sept. 11 was to elevate travel as a core component of people’s lives. It actually made them want to connect more with family and friends, and understand cultures in different parts of the world,” said Upchurch.

That sentiment rang particularly true with the upscale clientele Virtuoso was targeting. High-end travel has boomed in the past several years. Many suppliers, such as Crystal Cruises, see Virtuoso as a direct factor in that growth.

“Virtuoso is our largest revenue-producing consortium by a large margin,” said Bill Smith, senior vice president, sales and marketing for Crystal Cruises. “Our World Cruise itinerary is out right now. Virtuoso sells more of that product than any other organization. We’re seeing the world cruise market continue to grow because it is attracting a new kind of passenger. It’s attracting someone looking for adventure and life-enhancing experiences. The average age is dropping. We’re seeing families taking world cruises. Virtuoso travel agents have that clientele and the ability to pitch this product to them.” Similarly, Virtuoso is also seen as a valued strategic marketing partner at Silversea Cruises.

“The organization is a true innovator and trendsetter in the selling of luxury travel,” said David Morris, Silversea’s executive vice president of worldwide sales and marketing. “We share the same high standards of excellence and personalized service that Virtuoso travel consultants exhibit worldwide. We’re delighted to be partnering with such an exceptional organization that shares our commitment and passion to satisfying the needs of the most discerning luxury travelers.”

Upchurch, meanwhile, continues to modify his vision of Virtuoso, making sure it remains relevant. He described another big “aha” moment in preparing for this year’s Travel Mart.

“I realized that I had made a slight miscalculation back in 1999 when I said there was good news and bad news. Back then, I was still looking at the industry from a product-centric viewpoint. But, instead of worrying about pieces of the pie, the reality is that those slices of the pie became their own pie. It’s called the advice industry,” said Upchurch.

Citing studies indicating that today’s most successful entrepreneurs are those providing advice in an increasingly complex world, Upchurch said the very nature of the Virtuoso product has changed.

“The product isn’t the agent or the consultant, but the unique process that each engages in to help the customer fulfill a travel experience. The real products are ideas and advocacy,” said Upchurch. “What came out of Travel Mart for me is that we now have the advice industry and if it is going to grow within the travel industry, we need a different framework. The traditional one is founded on a transactional way of thinking. We need to get and attract people who will chose us as a channel, then pick the product.”

Going forward, Virtuoso will devote a great deal of resources including five regional directors to help agencies create advice-centered business plans. It is also addressing one of Upchurch’s biggest concerns recruiting, developing and retaining what he calls “Type A” talent. The network has launched numerous programs in that regard, including a new Web site, BecomeaVirtuoso.com, as well as an ongoing series of Luxury Travel Seminars aimed at career recruitment.

All that new talent is necessary if the industry is to remain relevant. And Upchurch, no doubt, will strive to remain at the head of the pack. “What’s happening now is almost like the birth of a whole new industry with a whole new framework. Our primary role is to manage the network and create a new framework in which amazing results happen,” said Upchurch. “We live in interesting times, those of us in the advice industry. Our tag line is ‘specialists in the art of travel.’ Virtuoso’s members are creating masterpieces.”