Why Travel Agents Own The Luxury Market

by Doug Gollan
Why Travel Agents Own The Luxury Market

Entrance to the International Luxury Travel Market (ILTM) in Cannes. Photo: Facebook.

In the past year, I’ve attended the International Luxury Travel Market (ILTM) in Cannes, the Americas version in Riviera Maya and the Asian edition in Shanghai. I’ve also been to the The Affluent Traveler Collection’s meeting in Palm Desert and Virtuoso Travel Week in Las Vegas. Last week I was in Deauville, France, for the annual conference of Traveller Made, a Paris-based consortium of agencies that focus on selling luxury. 

There are other players in the luxury space whose confabs I didn’t get to, namely Travel Leaders, Signature and Ensemble. I didn’t get to the PURE show in Morocco either, a trade event based more on creating experiences and less around insightful speakers or getting updates on luxury hotels. There are also ILTM events in South Africa, Japan and Brazil. 

When I started in the industry back 30 years ago none of these groups or events were in existence or had the mission they have today. Even in the late 90s travel agents didn’t seem to have any particularly significant role in selling luxury. So the fact that today you can spend your entire life going to luxury trade events is significant to me. Trade events are a sign of a robust and healthy industry.  

I’ve spoken with scores of travel agents who sell “luxury” at these conferences. I know I use the word “travel agent” at the risk of offending some readers, but I do not do it out of disrespect. Virtuoso calls its travel agents “travel advisors,” playing off money managers, who are often referred to as “financial advisors,” its CEO Matthew Upchurch says. It’s an interesting choice, because many predicted that financial planners would be made extinct by online trading services—but it certainly hasn’t turned out that way for either group. Traveller Made calls its agents “travel designers,” founder and CEO Quentin Desurmont picking up the term from fashion designers.  In both cases, the goal is to reposition yourself in the minds of potential customers not as a processor of tickets but as a consultant and expert who can create memories that last a lifetime. 

There are many reasons you are thriving in the luxury arena. The rich have the wherewithal to hire people to do time consuming tasks for them, be it managing their finances, keeping their lawns and gardens pretty, or decorating their homes. While it’s possible to do those things themselves, they prefer to pay someone a fair price to do it better than they can. 

The fact that consumers prefer to use agents, planners, counselors, designers, advisors, etc. for their trips doesn’t stop the OTAs from spending a considerable fortune (over $3 billion annually) churning out commercials that claim they cannot only find the lowest price at hotels, but can also create unique experiences. Frankly, I wouldn’t use them to buy an airline ticket from New York to St. Louis—but then again, I spent a considerable amount of time researching their awful record of consumer complaints, including numerous muck-ups that would have been funny if they didn’t ruin someone’s vacation or business trip.

Suppliers naturally have to keep their feet on both sides of the fence. While they would love for customers to book directly, many find the rates they sell on their own websites are lower than what you sell. The OTAs provide reach to anyone who has an Internet connection, of course, but they attract the price shoppers—and their distribution costs are as much as 300% higher than when you sell the same product for them. 

Yet suppliers have to consider the future.  Will you really be around in 10 or 20 years? Maybe in some dorm room in Stanford, some graduate student will figure out a way to do what you do at a touch of a button. What would happen if you go away? They have a responsibility to their owners and shareholders to be thinking about a world 20 years from now. When I started as a junior reporter in 1987 I was still using a typewriter and the fax machine was some contraption out of Star Trek that took eight minutes to produce one page. 

Back to today. I’ve been impressed with how some of you use Twitter, Facebook and Instagram to get bookings from current clients and attract their friends. You no longer sit behind a flickering CRT from 9 to 5. Former Carnival Cruise Lines president Bob Dickinson used to exhort you to keep your stores open on weekends and evenings. I know many of you work partly from home and mainly from the road, trekking to see new luxury resorts and taking copious notes on which suites have the best views and which offer only the clanging of dishes from the restaurant when you open the windows. 

The technology that was supposed to put you out of business has instead made you the lifeline to which your clients cling. You sleep with your smart phone, incessantly checking your e-mail and various messenger apps in case a client needs something. You program in the places your clients are traveling to on your Weather.com app so if you see it’s raining in Phuket, you can email your clients a couple suggestions before they wake-up. And of course, when airlines cancel flights, while other travelers are waiting on hold or tweeting for a rescue, you are emailing your customers with their new confirmed flights, changing their airport pick-ups for their new arrivals and alerting the hotel. You are probably also cajoling the DOM to waive any fees, something they will likely do for you, knowing that you provide a reliable and steady stream of business where web bookings are one-offs. 

Attending some of those trade shows, you amass thousands of business cards. Even if you’ve never been to Guangzhou, you know the general managers at the best hotels there. When your customer needs a waiver or favor, or when something goes wrong, you are there to help. Remember the part about sleeping with your cell phone.

Yes, there are still doubters and yes, there will be luxury sold directly via online services, by suppliers and hybrids. I’m not sure if there is a need for more luxury trade shows, or if the current roster will continue to grow. But it shows me that in the luxury market, for suppliers that want to show real ROI, robustly embracing the trade is the smart strategy.

There is one more bit of luxury news I want to share. Travel Market Report has launched a luxury channel dedicated to bringing you all the industry news about luxury you need to serve your clients the way you do. And that is, just spectacularly. 

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