Luxury Travel Agents Face Off Against Online Competition

by Richard D’Ambrosio
Luxury Travel Agents Face Off Against Online Competition

The Hotel Plaza Athenee is seeking reservations online.

The New York Times recently published a story that said mass market online travel agencies (OTAs) are making inroads into the luxury travel market.

But agents and others say that online sites are no match for expert agents, whose direct connections at luxury properties make personalized service come to life.

The Times story pointed out how long-standing OTAs like Expedia and Booking.com, and start- up travel apps like Skylark and Lola, are including more and more five-star properties in their inventory, and bundling discounted packages with first-class airfare.

Leslie Cafferty, Booking.com vice president and head of global communications, is quoted in the article saying her company’s five-star hotel reservations through September 2016 grew 40% this year versus last. For example, the five-star Hotel Plaza Athenee, Paris, part of the 10-property Dorchester Collection, is available at Booking.com.

Experts are closely watching the trend, but question whether high-net-worth travelers want to take a chance on booking through an OTA.

“There is no solid data to support the claim of increased bookings by OTAs for luxury travel. That is hard to find and or prove,” said Paul Breslin, managing director of the Atlanta office of Horwath HTL, a hospitality advisory firm, when contacted by Travel Market Report. “We are not sold that the luxury traveler is going to take a chance with the OTA; they are unlikely to spend valuable time to search and book with the OTAs.”

But he did agree that booking behaviors have been changing across demographics, and he is continuing to monitor the trend.

“I am not seeing many of my clients use OTAs for luxury travel,” said Michael King, president of Great Getaways Travel, Kansas City, MO. “Where I suspect some of them use it is for corporate travel for the convenience. My clients want a live person who has knowledge of the options, to discuss with them the various choices and help select which one might be best for them. They may search on line for information—but they want me to confirm what they see as factual.”

Valarie Contrino, certified travel advisor at her Staten Island, NY, agency, Contrino Travel Inc., also believes that agents aren’t losing bookings to online websites.

“Contrino Travel hasn't seen a decline in luxury bookings, so I'm not sure where the Times is getting its info from,” she said.  “In fact, we're seeing an increase, which could be related to our new rebranding of the company.”

Belmond Ltd. CEO and president Roeland Vos recently spoke about the unique value only an expert agent can provide. At an event recently in New York City for his luxury hotel company, Vos said agents “know exactly which suites are best for their customers. They know where the elevators are. They know what times of the year the weather is bad. Many times they know more about our hotels than we do.”

Vos described agents as an extension of his sales force and noted the company has strong, personal relationships with agents who regularly book Belmond’s 46 properties.

“Luxury travel agents have always offered something different. Our travelers come to us with a broad idea of their holiday and look to us to create their experience,” said Andrea Grisdale, CEO and founder, IC Bellagio, a luxury destination management company based in Italy.

“Over a typical booking period of 10-14 days there will be dozens of different experiences which are curated into a single holiday - flights, transfers, accommodation, tours, visits, meals, exclusive visits all of which are tailor-made for that client,” Grisdale said. “OTAs sell commodities. We offer experiences and we look forward to doing so until an online algorithm can make a reservation with a 75-year-old Italian grandmother, without access to the internet, to lead a pizza-making course for six Texans all with different dietary requirements in the back-streets of Naples.”

King, meanwhile, recalled an occasion when “a wonderful, very popular property was showing ‘sold out.’ A client of mine called rather close to his travel date wanting to book the property because he and his wife spent their honeymoon there, and now he wanted to take her back for their 10th anniversary. He called because I had helped plan his honeymoon, and he wanted to see if I knew of another hotel. I called the director of sales, someone I know personally, and was able to confirm the exact room they wanted. I am now their hero.”

King said he often is “able to get additional amenities for clients at no additional cost and in some instances I can get the accommodations for less than an OTA.”

At a Virtuoso event earlier this fall, Elite Travel International's Stacy Small recounted how she worked with a Paris hotel she books regularly for a customer’s first trip to Paris. The couple didn't drink alcohol, but the client wanted a romantic environment. Small was able to get them a room with a terrace overlooking the Eiffel Tower, and the hotel brought them chilled milk (their drink of choice) in an ice bucket with champagne glasses.

Interestingly, some of the OTAs and startups are using markdowns to encourage luxury bookings. Skylark, the Times noted, is offering discounts of up to 60% off certain package deals, and when a booking is made with a Virtuoso agent, those packages could include property-specific Virtuoso perks, like space-available upgrades and meals.

“I feel that those looking to price-match the OTAs are about the same,” Contrino said.  She hopes that "price-checkers" will move along to someone else who will work with "nickel-and-dimers."

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