When Virtuoso announced it was partnering with one of the Internet's new, private sales sites, Rue La La, I have to admit I was stumped.
The announcement came during Virtuoso's annual Travel Mart in Las Vegas. It was the first Travel Mart I had attended, so initially I figured the confusion was mine. As hotels editor, I thought maybe I was too involved in the lodging side of things and not savvy enough about the inner workings of the agent world to understand how it would benefit them.
But when I looked around, I saw that others seemed equally perplexed. Hotel representatives who work with Virtuoso said they had been all but banned from selling their property on private sales sites. And agents, who admit they see everyone and everything on the Internet as competition, said they couldn't see how a partnership with an Internet sales site would bring in business.
Most perplexing, however, was Virtuoso's response. Although the consortium had just announced to the 3,300 Travel Mart attendees that they were entering a partnership with Rue La La, they declined to say why or how the deal would work, promising only that a release would be issued at the next day's news conference.
At the evening cocktail party, young men and women in colorful T-shirts carried iPads around to sign up new Rue La La members, although many attendees had no idea what they were signing up for.
"All I know is if Virtuoso put it together, it must be good," said one agent.
At the next day's news conference, it took more than 30 minutes before the big announcement was finally alluded to. And when reporters pounced for details as to exactly how agents would work with Rue La La and what sales would be commissionable, Virtuoso executives hesitated to respond or seemed unsure of the answers. Finally, they cut us off, stating that it was time to move to another topic.
"I don't understand," a fellow reporter whispered, wondering if I had any further insight.
In talking with a few people after the news conference, it became clear that the deal had just recently been completed and that Virtuoso officials had probably decided they needed to announce it at Travel Mart, even if they didn't have all the specifics worked out.
But in their rush, they missed communicating what I can only deduce is the most important reason for entering such a deal: It gives them a new way to connect with an audience that has never before even thought of using a travel agent.
After all, Rue La La targets a demographic that does just about everything online, from communicating with friends to reading the news, shopping, watching movies and, of course, booking travel.
Asked if that was indeed a motivating factor, Virtuoso President Kristi Jones said it was. "Our audience is primarily boomers," she said. "Theirs is primarily Gen Xers."
Aha! Finally I realized the significance of the deal. Instead of shunning or even just ignoring the latest Internet competition, Virtuoso was embracing it and entering a partnership that has the potential to draw in a new generation of customers.
While I think Virtuoso missed a key opportunity to explain that aspect of the deal to its agents and suppliers, the alliance might well prove to be a brilliant move for both Virtuoso and Rue La La, which will essentially be sharing customer bases.
In a trial conducted jointly by Rue La La and Virtuoso, 17% of Rue La La shoppers who were offered the chance to contact a Virtuoso agent before booking did so. Of those, 80% booked their trip through the agent instead of directly off the website. Such sales give agents the chance not only to make commission on the hotels or cruises, but also to put together air and land packages.
More importantly, they have an opportunity to introduce a generation that is used to getting a run-of-the-mill room off a discount site to the upgrades and perks that are often available when bookings are instead made through experienced travel advisers.
Rue La La is among several private sales sites, including Jetsetter from the Gilt Group and Travel + Leisure's Vacationist, that offer special sales on travel to a members-only list. Basically, the sites partner with hotels and cruise lines to offer specials during times when the properties are underbooked. The sales are usually offered for specific dates and are available for booking during a short -- typically 48-hour -- booking window.
The sales sites differ from online travel agencies such as Expedia and Travelocity in that they usually offer only high-end product and they do not offer competing properties at the same time. Also, only members can access the sales, although any member can invite anyone to join, so growth in membership is viral.
Many of the specifics of the partnership with Virtuoso are proprietary and confidential, and other details are still being worked out, according to Rue La La. But the deal basically has two elements.
The first is special sales that will be put together by Virtuoso agencies and suppliers. Those will be posted like all other Rue La La sales but will be tagged as Virtuoso specials and will include contact information for Virtuoso agents.
Rue La La is also developing a site with sales that will be accessible only to Virtuoso agents and the clients they invite to join. Agents then will make commissions on all purchases by their clients on that site, even if the client books directly.
Additionally, Rue La La said travel agents who invite their clients to join will receive merchandise credit for anything their clients buy in the site's other boutiques, which include clothing and jewelry.
So the deal is what many would call a win-win for both. Virtuoso gains access to a younger generation of clients, and Rue La La gains entree to the boomers.
It is the first such partnership between agents and the private sales world, but don't expect it to be the last.
The Jetsetter private sales site, part of the Gilt Groupe, which helped launch the popularity of such sites with its fashion sales, is also exploring new ventures.
"Jetsetter is open to new partnerships," said Drew Patterson, Jetsetter's founder and CEO. "We are not ruling anything out."
Email Jeri Clausing at [email protected].
This column appeared in the Aug. 30 issue of Travel Weekly.