A popular new marketing concept that offers private, online sales of designer clothing is expanding into the luxury travel space.
Jetsetter.com offers limited sales of high-end travel products ranging from hotel rooms to African safaris. The site, its founder said, offers consumers a new way to find discounts while offering hoteliers and other suppliers a chance to sell excess inventory without diluting their prices.
CEO and founder Drew Patterson, a former executive with Starwood Hotels and Kayak, formed the site with Gilt Groupe, which has become a hit with Gen-Xers and Gen-Yers with its deeply discounted but limited sales of designer clothes that hit some 2 million member email boxes.
Jetsetter was built with access to the same member database, which Patterson said is a new audience for most high-end travel suppliers.
"One of our partners had gone through and compared the customers we generated with their historic customer base and found that 95% of our customers were new customers," he said. "That’s exactly what suppliers are looking for … to expand beyond the traditional set of luxury buyers."
Patterson emphasized that the site is aimed at a niche audience and is not intended to compete with online travel agencies.
To be eligible for membership, a consumer requests an invitation from the website. The bulk of Jetsetter members are young adults with high incomes who are not looking for the best deal on hotel rooms or airfare but instead are looking for new experiences, he said.
The concept of the private sale is catching on in the travel industry. Since Jetsetter launched its beta site last fall, several competitors have entered the space, including Kayak Private Sale, which requires consumers to register to receive notice of the deals, and Voyage Prive, which bills itself as "the world’s leading invitation-only travel site."
Patterson said that since the site launched in October it has sold "tens of thousands of packages," ranging from hotel rooms to safaris to private villas and yacht charters.
The prices, he said, are 35% to 60% off those offered in traditional travel channels.
"The logic is a finite amount of inventory," he said. "We are taking a subset of their inventory in promotional format for limited dates. That limits their dilution risk and helps us fill in their soft spots."
The site also has correspondents who visit the properties or take the excursions in advance and offer detailed write-ups that are posted with the sales.
"For our partners, it’s an enormous marketing value," he said. "We send out an email to 1.5 million members when we launch each sale and tell them why it’s a great vacation for Gen X and Gen Y."
Members can sign up for daily and weekly emails about current and upcoming sales. The site also has a calendar that shows current and future promotions.
Patterson said the site offers much more than hotels, but in recent weeks that’s all that was listed. The offerings included specials at high-end brands such as Gansevoort, Fairmont and Six Senses.
A price check of an offering from the Greenbrier in West Virginia showed the site selling rooms as low as $90 compared with the $149 rate for the same room shown on the Greenbrier’s site for the same dates.
Although consumers have to be "invited" to be members, the site encourages its members to add friends with promotions offering rewards such as $25 gift certificates when someone they have invited makes their first purchase.
The concept is being launched at a time when luxury and the industry in general has excess inventory to move. But Patterson insisted the concept can last even when the cycle turns.
"Even in the best of time, the industry runs at 72% occupancy," he said.
And unlike bargain hunters who may have tried higher-end brands over the past year but are unlikely to return when rates regain strength, Patterson said the Jetsetter audience has a strong potential for offering his partners repeat business.
"This is a very sophisticated audience," he said, noting they are buying Vera Wang and other high-end clothing designers. "This audience has a real passion for luxury and a real passion for luxury brands."