Luxury tour operator Abercrombie & Kent (A&K) hopes to broaden its market with its new lower-priced Connections program. True to its roots, though, the tour operator has positioned Connections at the top end of the market.
“Connections will appeal to a new market but it’s still a high-quality product, not mass market. We’re calling it premier, one notch below luxury,” said Keith Baron, senior vice president of strategic growth and development.
“Connections draws on A&K’s strengths. It is themed toward authentic experiences, local people, culture and cuisine; this is our strike zone.”
Priced at 30% less
Launched this month, Connections is priced at 30% less per diem than A&K’s traditional luxury group programs. It includes 17 itineraries in 22 countries on six continents.
“We didn’t take a luxury small group journey and say, okay here’s the template and let’s just put in cheaper hotels,” Baron said. “Connections are uniquely developed products for a world of people who are excited to come into close contact with destinations in much greater depth.”
Baron spoke with Travel Market Report about the program’s specifics and the strategy behind its introduction.
Why is A&K introducing a lower-priced product?
Baron: We want to take a whole new approach to group travel. The reality is luxury has done well in terms of the economy and our growth has been quite good, but we found an opportunity to broaden our reach in that next tier down from luxury.
Last year we tested the marketplace with lower-priced Egypt and Morocco itineraries to see what the response would be. It was tremendous. We were reaching customers we hadn’t reached before. This was our impetus to think more broadly.
What is your thinking regarding travel agents and the new program?
Baron: Our primary purpose is to reach a new audience — and that goes for both consumers and agents. There are agents who want to sell A&K who haven’t. When we work with one agent in an agency, there may be three or four other agents there who simply haven’t been able to capture our client base. With Connections they can reach out to a broader audience as well as clients they already have.
Why introduce Connections now that the economy is recovering, although slowly?
Baron: The economy has been the driver in all of this. Despite the fact that we’re on an upswing, slow growth tells us many people are thinking of traveling in a different way. We know people are carefully looking at every purchase they make with an eye towards value.
They have been challenged with spend in general and now they’re spending again. So we think this is the perfect time to introduce Connections.
Are you concerned you might be diluting the A&K brand?
Baron: We gave a lot of thought to that. First and foremost we are a luxury travel company. We’re creating another offering enabling people to travel with A&K but we’ve worked hard to insure that everything having to do with Connections is consistent with our brand.
Who is your target market for Connections?
Baron: The demographic will be relatively consistent with our existing guests. It skews age 55 and up including executives, entrepreneurs and the more affluent. Connections travelers might be younger but they’ll still be affluent and educated.
We believe there’s a world of people who are excited to come into close contact with destinations around the world in much greater depth. We expect travelers for Connections to value that authenticity over elegance.
Who will Connections be competing with?
Baron: That will depend on the destination. There are many small boutique companies that focus only on one destination and also larger companies we’ll compete with. But we’re hoping the agent community and individuals who know us will trust A&K.
One of the most critical things here is that we work with our own offices. We have 50 around the world and we’re using the same dedicated staff and local resident tour directors and guides for Connections. We also recognize that many of our competitors in this market segment accommodate as many as 44 or more people on their programs versus the 24 to 28 maximum group size for Connections.
Do you see Connections as part of a trend?
Baron: I don’t think it’s anything new for companies to expand their market segment. Even mass market tour operators have created more higher-end product at times. For us, because we’re at the high end of the market, the obvious direction is to move down.