Travel advisors — formerly known as luxury travel agents — have a strong future ahead, despite the rise of artificial intelligence and other automation, according to the leaders of two leisure travel agencies that specialize in serving elite clients.

‘The transactional elements are going to be phased out and done more efficiently by software,” said Jack Ezon, founder and managing partner of Embark, speaking at Skift Global Forum on Thursday in New York City. “But travel advisors who can create value are thriving. Our mantra is to transcend the transaction.”

“[Agents] who were like human vending machines have gone away, and the ones that focused on providing value have thrived,” said Matthew Upchurch, chairman and CEO of Virtuoso — and who has perhaps done more than anyone to popularize the adoption of the term “travel advisors.”

Upchurch bet long ago on the potential of the sector.

“I never got the notion why the baby boomer generation that invented the personal chef, the personal trainer, and so on — it never made sense to me that they’d want do-it-yourself for luxury travel,” he said. The first baby boomer didn’t turn 60 until the early 2000s, and Virtuoso has emphasized attempting to “super-serve” the elite segment of this sector.

“If you look at the online revolution in financial services, we’ve had the greatest growth in independent wealth management services but they’re not well known because they’re not mass market consumer brands,” said Upchurch. “The same metaphor applies to luxury travel advisors.”

That’s why Upchurch believes travel advisors are “the hottest new thing that never went away.” He predicted that “artificial intelligence will be the greatest thing to happen to our profession.”

Travel advisors have to embrace technology, not ignore it. Being able to automate the routine parts of service is key, but being able to triage messaging in the way customers prefer — such as text messaging or WhatsApp — is equally important.

Attracting the best talent is critical for agencies, said Ezon in an on-stage conversation with Rafat Ali, founder and CEO of Skift. That’s why Ezon’s firm is sunsetting the Ovation Vacations brand to launch a new concept in the luxury travel and lifestyle space called Embark.

Instead of building an independent contractor model as is typical, Embark aims to build a partnership model where forward-thinking travel advisors can become partners in the firm.

Ezon has a storied background in luxury. For many years he was president of Ovation Vacations, growing the travel business from $3 million to more than $400 million. Ovation Vacations has been a key brand for Ovation Travel Group, a $1 billion business and the sixth-largest travel agency group in the U.S. His team has an average age of 28 and it books an average of $3 million to $5 million a year in business, Ezon said.

READ THE FULL EDITED TRANSCRIPT OF THE INTERVIEW

Skift: The reality is that travel agents, now called travel advisors, have certainly come back in many ways but in a very different way than people expected. I’ll open with this sort of big picture question…the rebranding of travel agent to travel advisors, is it done?

Matthew Upchurch: Well I think, first of all, thank you for having me back because three years ago we were talking about it and I love representing the hottest new thing that never went away. The reason I say they never went away is because from 1977 to 1997 the airline GDSs created an artificial monopoly on the information inside a GDS and so the number of quote unquote travel agents went from 4,000 to 40,000 between that period of time because there was an artificial monopoly.

Now if you go back to the 50s, the 60s, the 70s, the people who were always advisors, who always were not just about the booking but about community knowledge, knowing the people and the destination, understanding the holistic value of before, during, and after the trip, had actually never gone away.

The tools have changed. And so what happened is when the online revolution happened in the late 90s and that artificial monopoly went away, the people who were human vending machines-and I don’t mean that in a cruel way but frankly- were gone. And then the people who were truly advisors, truly in it from a consulting perspective, flourished.

And I remember in ’97, you know Expedia, Travelocity, everyone had been born. Everybody said that we were road kill, forget about it, quit now.

But I always thought it never made sense to me that the baby boomer generation, at that time, who had invented the personal chef, the personal trainer, the personal everything, was gonna do everything DIY. It just never made sense to me.

So obviously we rebranded as Virtuoso in 2000 because the problem with the profession was that it was viewed by the lowest common denominator. And so we wanted to build a different brand that said this is what we do, this is how we’re different. And then after 2000, the biggest problem we had was our best advisors after we rebranded—because the first baby boomer didn’t turn 60 until 2006, and then there were 10,000 a day, we rebranded in order to create an attraction— were like “I don’t have enough hours in the day to handle all the business.”

And then that’s when we changed our mission in 2001 to say: we have to make this a financially and personally rewarding career to attract new talent. And that’s probably where I’m the most excited and the most proud of what’s happened is the amount of career switchers. Young people that have become travel advisors. And I’ll tell you this right now. I’ve never seen in my entire career people who have come into this profession and gone from zero book of business to multimillion dollar producers in a short amount of time.

Skift: So, Jack, would it be fair to say that you were Agent Super Advisor?

Jack Ezon: I’ll take it.

Skift: I think Bloomberg said that, I think, in one of the stories about you. Would it be fair to say that the role of travel advisors, and this is what you do, is now in a certain subset, luxury and that’s it and obviously cruises is sort of this other part of it and that’s it?

Ezon: I don’t think you can say that’s it. I think it’s still changing and finding its feet. It’s definitely moving in a direction. The direction I see is the transactional humans are going to be phased out I think. Or they’re not going to be as lucrative. Because you know, we’re all talking about great technologies today. They’re gonna be doing it a lot more efficiently and a lot better. Where humans need to focus is where the value is, and where people value that service. Not everybody values service. You know, there’s a big difference, we were just talking before, of price and value. Price is what you pay, and value’s what you get.

We need to focus on that market of people that value service and value things that can’t be done in an automated fashion. And that’s where I see humans, travel advisors, moving. The reason why I believe Matthew changed the term, or helped change the term from agent to consultant to advisor is really- it’s indicative of what’s happening in our marketplace. And yes it’s a very small niche.

Most of you have never even touched this niche. They’re talking to us about their personal life. Not just about their trip next week to the Bahamas. They’re talking to us about their most precious time, their leisure time. How to enrich their lives and how to take that to another level. So our conversations are about their lifestyle on a holistic level and we’re there to advise them on how to plan their life through travel as a lens of the things they want to experience and achieve in their life.

Upchurch: If you look at every single industry in the world, generally every industry in the world is bifurcating itself between optimize commodity and optimize experiential. So if you want to look at what’s happened to travel advisors, it’s the same thing that happened to stock brokers.

The problem that you have is you have a feeling that when you get these huge consumer brands who have billions of dollars of advertising, they look like they’ve taken over the whole thing. But if you look at the online revolution in financial services, during that same period of time we’ve had the greatest growth in independent wealth management firms in the world. They just happen to be much more broken out and they’re not these huge consumer brands that look like they took over everything.

Ezon: And I think a lot of that is because there’s so much information it becomes information overload. And we’re going to financial consultants and real estate consultants, any kind of consulting, beauty consulting, life coaches, because there’s so much out there and it’s brain freeze.

People come to us every day if I can count, five ten people calling us, new clients saying help, I don’t know what to do, what’s good for me. And our job is to specialize in our clients and to know the world. Not to be specialists in India or France or wherever it is. To understand that client. To understand them on an emotional level, a deep level, about their whole life. Not just what they want to do tomorrow.

Skift: So, it looks like you’re a part of Ovation, the larger company. You’re semi breaking away to start your own company under Ovation, which is sort of in a different model. Explain what you’re doing.

Ezon: I think to step back, most people here probably don’t understand the luxury travel retail space. And it’s mostly composed of independent contractors, almost like real estate brokers, that work under larger house firms. And that’s a great model, but we see with all of the new technologies coming out and things changing in the marketplace that we have a feeling that we need to change the alignment of independent contractors with their global house.

Our model is emulating the professional service firm, because again we’re likening ourselves to financial advisors or lawyers or accountants and to make more of a partnership model.

So not only do we align ourselves more closely with our advisors and our partners but we grow, create a platform from which to grow other partnerships. Whether it’s in the financial space, in technology, in marketing, in training.

One of our partners is Master Connections. It’s the leading training company in the world. They’ve built Ritz Carlton’s and Four Seasons’ training programs. We’ve brought them on as a partner because we believe that great service is gonna be the cornerstone for our success. Because if we don’t deliver amazing service, then you can go to a robot to do the rest.

Skift: So Matthew you talked about, and I think you wrote about it as well: travel agents, travel advisors now historically always looked at as intermediaries.

Upchurch: Yeah. I hate that word.

Skift: And you’re saying it’s a wrong construct to look at that world.

Upchurch: Yeah.

Skift: Tell me what you mean.

Upchurch: Well, one of the hot topics this year was the term intermediaries. And what’s very interesting is the reason I don’t like that word is because I think it’s slightly, if not totally, should be retired. Because back in the day when there were technological and logistical issues that kept the actual producer from being able to sell directly to the consumer, intermediaries were more of a real thing.

Today there hardly is anything you can’t buy direct from the producer. So therefore my position is that when a consumer makes a conscious choice to not book direct, they’re doing it for reasons. So I’m not the intermediary, I’m the primary. They’ve hired me to be the person to deal with you.

Skift: Does that mean that brands don’t have to pay you any money?

Upchurch: No, no, no. Well, by the way…one of the things that’s interesting, Rafat, is that in all the different conversations over the years, I’ve always been grateful of one thing. There’s only one person that determines my future and the future of our members. It’s the consumer. The client. They’re gonna determine whether I’m valuable or not.

And so I think what’s interesting is then when you talk about intermediaries, I actually was, I kinda had an epiphany this year because if you think about it, if I went to the board of directors for any one of these big companies and said if I could go out there and find a sales force of people who are as diverse as the clients you’re trying to reach, who will speak their language, who will connect to them emotionally, who will get your products sold not based on just price. And by the way I can build this huge sales force out there and you don’t have to pay them until they produce, would you like to have that sales force? And most people would say yes, right? They’re called travel advisors.

I actually would profess that good travel advisors are more aligned with a brand’s direct to consumer. When our advisors sell a product, all the data is there. A lot of times an OTA or something, you’re lucky if you get the arrival date, the departure date, and you don’t even know the form of payment.

When we send somebody to one of our partners, not only do they have all the data, not only is it a complete collaboration, but we literally call them in real time. “Rafat and his family are coming.” And we give them data that elevates the experience because I know you in real time. Because we’re able to collaborate with a partner, elevate the experience, you think it was a better experience worth paying for. Therefore higher repeat factors, greater satisfaction, and the desire to pay for more.

Ezon: I think the word partner is really the key concept here. We don’t need to work with people on a transactional basis. In fact, something we see every day in our business is transcend the transaction. And there’s so many better vehicles and channels that we’ve been talking about today for that. We work with people that want to work with us.

Talking about brands, yes branding is very important and having a great branding budget and marketing budget is important. But when a client comes to us, they’re coming to us to curate an experience that’s right for them and who they’re going with and I don’t- the brand doesn’t always translate into what they need.

And big brands today are also facing a lot of challenges with our really tough challenges, especially our younger clients, because they don’t want that predicable, they don’t want that predictability. They want the best, unique, most authentic place and oftentimes they call up and they say “I don’t want a brand.”

So what does that mean? So sometimes it’s my role to say yes, you want that brand here. Or you don’t what that here. And if we know that client and we know who our partners are and who is going to deliver an incredible experience for them and open doors they can’t do on their own, that’s who we’re gonna work more closely with.

Upchurch: And I think the other thing that’s really important, we had her as a keynote speaker, some of them I’m sure you will recognize, but we had Dr. Brené Brown as a speaker at our conference years ago before she became as famous as she is today.

People were like why are you bringing a PhD in Social Work Research to talk to a bunch of travel people? And the reason is because there’s also this whole thing about human connection. We really believe in it. It’s the reason we spend so much of our time building relationships because we believe the quality of our relationships and the quality of our connections with people all over the world truly make a difference in the way our clients experience their travel.

I remember her saying very, very clearly, she said “The human species exists because we’re social animals and we’re collaborative.” And I loved what you said today when you talked about those premises, about compassion, about collaboration. And I remembered Brené saying that as technology becomes more ubiquitous, there will not only be a desire, there will be a craving for authentic human connection.

I think that’s one of the things that happens. And last more thing. I was told that okay, you survived the baby boomers. Well when the millennials come, you’re really out of business because they’re doing everything on their mobile phones and blah blah blah. It’s been the exact opposite.

Skift: If my Uber is a minute late, I’m antsy. So digital versus travel advisor. What are you building in to get over that instantaneous satisfaction?

Upchurch: Well, first of all, a couple of things. When I spoke here three years ago, one of the things is we get so enamored with the latest app, the latest whatever, that we actually forget that two technologies actually completely reinvented our profession: mobility and social media. And simple things like texting. Today, what, it’s still 70-some-odd percent of all activity on a mobile phone is some form of messaging.

Skift: Do your clients text you a lot?

Ezon: Yes. WhatsApp, text, Instagram message, email. It’s anyway how someone wants to communicate. I see everything going towards a hybrid method. We need to invest in technology. We need to embrace artificial intelligence. In fact, as a company we’ve invested into a company called Skylark, which, it’s a hybrid model. I mean, you can do it yourself but text us, call us, instant message us. Where should I stay in London? Should it be at The Connaught or Claridge’s? Help me figure this out. Or stay at The Plaza Athenee in Paris and call us the next day and help us organize a scavenger hunt through The Louvre or something that they couldn’t necessarily do on their own.

Upchurch: And I’ll give you another example of technology and human connection. First of all we serve the best educated, most traveled, most computer savvy, technologically savvy people in the world. So you can’t BS these people. So you don’t present yourself as I’m the expert and know everything. I’m the expert, as Jack said, my job is to know you. I get into a certain level of discussion. You know what a lot of our great advisors do, we have this global network.

And you start to get to a level of sophistication, and you say you know what? Let me get our partner in Bhutan. We’ll do a three-way Skype or a Zoom. Next thing you’re doing, you’re talking to the person in market that knows it. It’s a collaboration and it’s real time. The beauty of that is not just oh, did I, was I able to book something. I’m literally sending you to somebody that I know, that I trust. It’s no longer about can I find a guide, I want your guide. I want the person that you thought did an amazing [job] I want Fulvio in Rome.

Skift: So let me ask this, I’m in the market let’s say for a travel advisor. Is discovery easy today?

Upchurch: Discovery?

Skift: Finding the right person. Because it seems like I go on Conde Nast Traveler, and who gives a shit about that these days.

Upchurch: Well, I’m not touching that one. Because we actually got that list going.

What interesting is we actually have an advisor catalog. We had a relationship with Merrill Lynch, and we still do, and it was very interesting because the de facto kind of desire was you’d connect them. What we have found is that the customer doesn’t spend a little bit of time an energy in deciding who they want to deal with, it’s probably a customer that we don’t want because they’re looking for a transaction. Forcing the customer to look at our advisor catalog, see where people have been, what kind of personalities, et cetera, that process.

Skift: If I don’t know Virtuoso or if I don’t know Jack’s company, how the hell am I gonna find you?

Upchurch: The number one, still, number one by far is referral. The vast majority of our business is referral. I was asked years ago how you were gonna find the next luxury traveler of the future. It’s been by developing the luxury advisor of the future. So when I get a 35-year-old young woman in Atlanta who becomes an advisor, and all the people around her go you became a what? You bought a what? But once they tend to find out what she does, it spreads like wildfire.

Ezon: We talked about influencers. Our best influencers are our clients, because they have the sphere of friendship and relationships that are probably your customers and it’s less expensive to service that than to have a broad net of people who are not your customers. And to qualify that is expensive. It’s not a pleasant experience.

Part of what we need to do as advisors is know who our customer is and who our customer is not. And that’s part of the whole process.

Skift: I do have a quick question before we go to the questions. Press today, mainstream press. What are they getting right, what are they getting wrong?

Ezon: I feel like mainstream press is imploding from within. I still see huge demand, especially from my clients. And my clients are mostly GenX millennials, not baby boomers-responding to mainstream media. Whether they’re seeing it in print, whether they’re seeing it digitally, but credible, credible media outlets are still what I call. They’re the pitchers and we’re the catchers. So really important to us.

Skift: Let’s go to questions. So, the first question, what kind of demand are you seeing for travel advisors from younger generations?

Upchurch: I love this. I mean, if you were to force me to say there’s only one thing you can pick that you are the most proud of what’s happened is that we’ve brought young people in this and they themselves are finding this as an amazing career.

So the amount of new talent that we have added in our network in the last seven years is incredible. And they’re driving. And by the way, if you look at this career and you talk, I went to Cornell and I showed a picture of a bunch of our advisors who were sitting in a pool in St. Barts with their laptops, this group of agents. And I said do you really want to work at a hotel or do you want to be at the forefront of the digital nomad revolution building a book of business with really interesting people, traveling all over the world where your travel generates new business.

Ezon: The average age of our agent is 28 and they’re doing between three and five million dollars of business.

Skift: Three to five.

Ezon: Million dollars.

Skift: The top question now is do you see Google and TripAdvisor’s new planning functionalities based on machine learning and influencer content as big threats?

Ezon: I’ve been talking about this for a long time which is a lot why I’m changing the model of my industry but I think artificial intelligence is going to change our future and I think it’s incredible. I think maybe five years away. It’s gonna really have a big impact. And what I say is that we need to embrace that. We need to augment artificial intelligence with what I call intuitive intelligence. And that, again, is us being in touch with our customer. Knowing them. Because yes, a computer can do a lot of things but a computer can’t do a lot of things and that’s emotional impact.

We’re in the emotional impact business when we send people away and it can be something as silly as sending somebody earplugs because we heard on the phone that they were frightened to be with their grandchildren on a multi-generational trip in one villa and they didn’t know how they were going to sleep. And they remember that for life. And that means that you heard me. We do that every day. In fact, with every trip we do we have an EI factor, an emotional intelligence component, where we need to impact people on another level. People are craving people. They’re craving connection.

Upchurch: So two things, Rafat. Number one is I actually have become, particularly in this last year, I’ve actually become of the opinion that I think artificial intelligence is going to end up being one of the greatest things for our profession. My philosophy and our organization’s philosophy about technology has been for over 20 years, automate the predictable so you can humanize the exceptional.

Ezon: Exactly.

Upchurch: So use technology to do that. And the other thing that’s interesting is that it is exactly about that. I said to our membership a year ago, I see the future of our profession will be not in what you can see but in what you can feel. And as everybody, as there’s this escalation of war of date and information and process I can leverage those very same tools in the hands of an advisor. But it’s that other piece of it, of how I make you feel. And the last piece of it is, the really good advisors today are never working on one trip at a time.

So we’ve actually developed a platform that basically is like Pinterest meets Netflix that is the gamification of organizing somebody’s bucket list. And the youngest person to use our platform so far is six years old and the oldest person is 86.

Ezon: I think it’s like we said before, it’s the hybrid of it all. Nathan Lump from Travel & Leisure [Lump has since resigned], he came up with this great phrase called non-algorithmic decision making. It’s really important. Because not everything’s a Boolean equation. Right? Our clients at our level, at the level that we work, that people want to pay for us, they want things that aren’t rules. They don’t do rules. They do guidelines. But they want things that cannot be had. They want the room that’s not there. They want to go to the Chanel haut couture fashion show and have dinner the night before with Karl Lagerfeld.

Skift: How much does that cost?

Ezon: Forty thousand dollars.

Upchurch: The other problem is, guys, this is not just a little niche. I think that’s the other problem sometimes. Our network had almost 20% growth this year from 23.7 billion to 25.8 billion.

Ezon: Don’t let the secret out.

Upchurch: 27 billion. So this is not, this just applies to the few uber wealthy people. It’s not about the value of the product. It’s whether they value the advisor. So advisors don’t just book…it’s the entire servicing of the client and their life’s energy.

Skift: Thank you. We could go on for hours, but thank you.

Photo Credit: Shown here are Matthew Upchurch, Chairman and CEO of Virtuoso, (right) and Jack Ezon, founder and managing partner of Embark (center), talking with Skift CEO and founder Rafat Ali (left) at Skift Global Forum on Thursday in New York City. Skift