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What’s one of the impediments to getting ahead in the travel advisor business?
According to Matthew Upchurch, the CEO of Virtuoso, a network of luxury travel agencies, travel advisors often don’t control their own time. They arrive in the office in the morning and might plan to work on long-term strategy, but an important client has her flight cancelled in Paris because of a storm or strike, and then travel advisors have to jump on that as cancellations build. Soon, the day gets away from them.
That’s one of the reasons, he said at a briefing for the press at Virtuoso headquarters in New York City Tuesday, that the agency group recently unveiled a strategic collaboration program, which pairs travel agencies with regional directors or account managers to create strategic plans.
The agencies select three priorities for the next 12-18 months, and the Virtuoso staff and the agencies craft an action plan together. That how Virtuoso touts the program.
What were the four most-popular priorities that agencies selected to work on so far? If you thought maximizing revenue was number one then you’d be wrong. The top four in descending order were: Improve advisor efficiency; talent development, finding new advisor talent, and maximizing marketing.
One of the ways agencies can improve advisor efficiency is to employ sales and other assistants for top producers, which enables “people to do all the rote stuff,” Upchurch said. “The jump in productivity is immense.” He said that’s also a great way to develop new talent.
When it comes to marketing efficiencies, Virtuoso found that agencies that had received a complete marketing plan from the luxury agency group generated an additional $22,686 in consumer spending on average in 2018, and that was a 12 percent increase compared to the previous year. Virtuoso clients that received no marketing plan or one that was less than complete saw consumer spending rise $5,481 and $14,988, respectively.
That’s not a lot of money when you consider the competitive nature of the business.
Virtuoso has a presence in more than 1,000 agency locations in some 50 countries. Its 20,000 affiliated luxury travel advisors did $26.4 billion in sales in 2018, an 11 percent increase over the previous year. A little more than half of the travel counselors are based in the United States.
Asked how Virtuoso can craft strategic marketing plans for all of the agencies that want to collaborate on a plan, Upchurch said that’s why Virtuoso limits the priorities agencies can select to around 10. He said a byproduct of the collaboration is that the joint-planning helps Virtuoso determine what kinds of new products to develop.
So what is the outlook for travel agencies in 2019? Upchurch said the single most important factor affecting consumer confidence, and presumably their vacation plans, is stock market volatility. Not the real-world economy, but the fluctuations of the financial markets. Upchurch called it “the wealth effect,” where people potentially planning trips will really feel it if their retirement plan or net worth plummet.
Virtuoso queried 510 travel agency owners and managers from the U.S. and Canada at its forum in Las Vegas January 24 about whether stock market fluctuations impact consumer confidence at their businesses, and 42 percent indicated “yes,” while 52 percent said “no.”
Regarding their sales outlook for 2019, the survey respondents stated sales would be down (1 percent), similar to 2019 (7 percent), 1-10 percent higher (42 percent), 11-20 percent higher (34 percent), and 21 percent or higher (16 percent).
One thing that might help sales is when travel advisors become skilled facilitators, Upchurch said. Only a subset of travel advisors can “pull things out of people without giving them all the answers,” he said.
That’s a skill that’s hard to teach.
Correction: Virtuoso found that agencies that had received a complete marketing plan from the luxury agency group generated an additional $22,686 in consumer spending on average in 2018. That figure was not the increase in marketing spend.