The announcement that Virtuoso made last month declaring that the travel agency network was reinstating Classic Vacations as a preferred tour operator was a classic and, in some regards, a virtuoso example of the fine art of press release writing.

In addition to stating the news at hand, it signaled to Virtuoso members that the organization had not backed down from a once-contentious fight, reassured other preferred suppliers they were not being usurped and subtly declared victory in an ostensibly no-fault reconciliation.

Some background for those new to the industry: Three-and-a-half years ago, Virtuoso very publicly dropped Classic, a division of Expedia, from its preferred roster, in part because IAC Chairman Barry Diller declared in the pages of Travel Weekly that Expedia was a competitor to traditional travel agents. Classic leadership, clearly caught off guard, stated that its commitment to travel agents had not faltered and countered that Virtuoso had a hidden agenda to become a tour operator.

The reconciliation of the two respected luxury brands in many ways reflects how the travel industry and, in particular, travel agent attitudes and ambitions have evolved since late 2003.

December of that year might well have been the high-water mark for the channel wars waged between traditional travel agents and their online rivals. Agent frustration was palpable, and while there was not much they could do about airline commission cuts, the post-9/11 falloff in travel, SARS or the Iraq war, they could lash out at a competitive channel that was luring away clients with Web-only fares and technological advantages such as dynamic packaging.

Taking control of inventory through merchant models and "wholetailing" seemed an attractive new route. The additional step of becoming full-fledged wholesale tour operators also seemed promising, especially for high-end agent groups like Virtuoso and Signature, which also dropped Classic during that period.

But times have changed. The impact of SARS, 9/11 and Iraq receded; the growth of the online channel flattened (as has the playing field for Web-only fares); and the business climate improved on most fronts for traditional travel agencies.

And, it turns out, being a tour operator is a lot harder than it looks. Virtuoso and Signature have backed away from their ambitions in that arena. (Virtuoso has focused instead on pre- and post-tour add-ons.)

The culture at Expedia has changed, as well. The arrogance of the past has been replaced by measures of diplomacy and tact, both practiced artfully by Classic's new president, Tim MacDonald.

Virtuoso even may have concluded it could learn a thing or two from the online channel: Its new executive vice president of sales and marketing, Tony Gonchar, was hired from Expedia.

So when late last year Classic's vice president of sales, Greg Bernd, crossed paths with Virtuoso CEO Matthew Upchurch at Valerie Wilson Travel's 25th anniversary party, the time was ripe for reunification talks.

Interestingly, Virtuoso's rift with Classic occurred almost exactly one year before its relationship with the card side of American Express began to unravel. The troubles followed the AmEx announcement of a card program that favored AmEx agencies over others; it seemed to resolve after Virtuoso and other groups refused to cooperate, and AmEx suspended the program. But rather than heal after Virtuoso's apparent victory, the division widened, culminating in Virtuoso's deal to provide services for a specially issued elite version of MasterCard.

Will three-and-a-half years ultimately be enough time for AmEx, too, to reconcile with Virtuoso?

In the end, an essential component to bringing Classic back into the fold was Virtuoso agents' continued attraction to Classic's products. It would be a positive sign for AmEx if latent affection for its card resides in Virtuoso agents' hearts, but AmEx will, in any case, face a more formidable barrier than Classic faced in establishing a relationship with Virtuoso in the future. Unlike preferred tour operator relationships, when it comes to credit cards, polygamous relationships are almost unheard of.


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