A new platform for retail travel sales is now open in Austin, Texas. Keith Waldon, formerly Virtuoso's vice president for business development, has opened the Departure Lounge, a coffee and wine bar in an upscale setting in the Texas state capital. The establishment also happens to be a travel agency staffed by outside contractors. Contributing Editor Richard Turen, our "Reality Check" columnist and a member of Virtuoso, recently sat down with Waldon to talk about his transition from consortium executive to entrepreneur.
Turen: So, Keith, you've left Virtuoso, where you rebranded the entire $9.6 billion organization, formed numerous strategic alliances and helped make Virtuoso a household name in those households worth $1 million plus. Now you're using all of that talent and background to open a rather unique concept that merges coffee, fine wine, light food and travel planning in a swank new space in Austin's thriving downtown area.
What did you see in the future that led to this decision?
Waldon: First, it's what I've seen over the past 25 years I've been in the business. Travel retailers have become seemingly less relevant and certainly less visible in communities. You can walk through the most vibrant areas of many cities worldwide and not see a travel company, and that's a problem. The result is generations that don't know travel agencies exists, why you would use one or where you could find one.
So Departure Lounge's business mix was conceived with a focus on being more relevant and engaging with current travelers, as well as being very high-profile in the heart of downtown Austin on one of the city's busiest corners. I interviewed more than 200 passionate travelers in Austin and asked them what type of travel company they'd want to work with, and what they described had very little to do with a traditional travel agency.
Turen: Was it the bad carpeting they didn't like? The cheap-deal flyers stuck on the windows? Or the fact that they couldn't see the magic screen the agent behind the desk was seeing? What exactly did they feel was missing from the purchase experience? It had to be more than a righteous espresso and a knock-your-socks-off pinot noir.
Waldon: Actually, very few of them had used or were using a travel agent. The vast majority booked their own travel or used a service through their credit card. They stated a strong frustration with booking online.
The person in the household booking travel had a lot of stress/pressure to not make mistakes, and maneuvering through all the information and marketing on the Internet was daunting. Keep in mind, Austin has more than doubled in size since 1990 and is now the 11th-largest city in the United States, but it has a small number of travel agencies, and most of those are not easy to see/find.
Turen: That's really interesting, because you've launched a startup that is targeted at fairly sophisticated travel consumers who are experiencing Internet information overload. And you know that it's only going to get worse.
Which brings me to the professional travel consultants working at Departure Lounge. It is a coffee cafe in the morning and early afternoon and, as I understand it, a wine bar after 4 p.m. But how have you integrated travel planning with a beverage-oriented, upscale hangout in the heart of downtown? Exactly how does the travel planning work?
Waldon: We are sensitive to the bar atmosphere not feeling like a pressured sales environment, so we use a softer approach to letting in-lounge clients know that we offer travel planning and arrangements.
There's a section of a food-and-beverage menu that covers travel under a separate tab. We use a check presenter insert to also get the message across as to why lounge clients should work with us to plan their travel.
And, most importantly, we've hired bar staff with great travel backgrounds and trained them to engage lounge guests in conversation, and within those conversations to get the point across about the reasons to reserve travel via Departure Lounge travel advisers.
Our direct marketing to affluent residents in Austin is much more direct in focusing on our travel planning, of course. We also have a team of bright, engaging advisers, and they're very active in the community. We focus on scheduling appointments for lounge guests to come back in and meet with an adviser to plan a trip, and that has worked well so far.
Turen: So you don't subscribe to the "get the deposit before they leave the premises" rule. I think we're kindred spirits. So, to make sure I understand this, your service staff is travel-oriented and bright enough to know how to recommend your services, but your actual consultants work by appointment and are on call?
Waldon: That's correct. Our advisers primarily work by appointment and are on call. They are all independent contractors. They bring clients they source into the lounge for meetings, and they also receive and manage leads sourced by Departure Lounge. Some of my advisers live just a couple of blocks from the lounge, so they can arrive within the time it takes to drink a cup of coffee or a glass of wine and peruse our Virtual Getaways on the flat-screens.
Turen: Your ICs must love having a dedicated coffee/wine bar to call home. But I'm wondering about the liquor laws in Austin. I know in my locality, a travel seller may not offer a drink to a customer until after the sale is consummated and paid in full. Alcohol cannot be served during the sales or "deliberative" process. Is that an issue you've been able to work out?
Waldon: Texas is not as restrictive, but such a law would not deter us. Our clients purchase whatever food and beverages desired, if any.
Turen: Did this come to you as a revelation or during a night out in Austin with friends? Or, I wonder, was this idea something you've been carrying around with you for years? Do you remember how the concept first came to you?
Waldon: It was a puzzle that the residents of Austin helped me put together. I'd been pondering how travel could get back into a front-and-center position in a community for years, and my interviews with Austinites helped me start connecting the dots.
As you know, Richard, I'm a branding guy, so the Departure Lounge name/brand popped into my head last fall in September, and the concept started to evolve and take on a life of its own in my twisted brain fairly quickly.
I first worked for Rosewood Hotels during and after college, so those days helped me bring a "sense of place" to the hospitality part of the equation. Then, my experience with Virtuoso member agencies and preferred suppliers, combined with my marketing and branding background, helped me create the vision for how to inspire, market and sell travel in a fresh way.
I'm happy to say that after a few weeks of being open, I really like and enjoy how it has all come together. Occasionally I get to sit in the lounge and pretend to be a guest, and it's a great space and definitely fuels wanderlust.
Turen: Can you describe the space a bit? I'm wondering where the ICs would sit to meet with clients. Would I be able to order a nice cabernet and get to listen in on a nearby conversation about someone's travel plans?
Waldon: Departure Lounge is approximately 2,100 square feet, and two-thirds of that space is open, with lots of couches, love seats and chairs arranged in groupings for five to six people each. And each of these seating areas has a large flat-screen adjacent to it.
Then we also have a couple of Moroccan-arched booths with drapes and 40-inch touch screens.
Finally we have a private room that can seat 12 people around a conference table, and that table divides into individual tables for when we want to use that room for multiple groups or individuals for additional lounge seating.
Our travel advisers reserve the booths for meetings with clients, because it's a semi-enclosed space where you can use the 40-inch screen to go over options and get client input and decisions.
Departure Lounge is a great place to have a glass of wine and listen to others' conversations about their trips, and we're seeing that conversations between strangers are naturally happening, which was by design.
Turen: I'm sure it has not escaped you that coffee and wine are two of the highest-profit-margin products any dining-
related business can offer. Does that give you some breathing room when it comes to your long-range plans for the travel portion of your business?
Waldon: Coffee and wine not only have good margins, but they're made and grown in countries that are typically great destinations for travel. We've been very detailed in our selection of boutique wines, beers and sakes, and I met with more than a dozen coffee roasters before selecting our roaster and the specific coffee beans we offer at Departure Lounge.
Our food and beverage sales are certainly a significant part of our business model financially, and they are key elements to fuel wanderlust and conversation.
Turen: There is this story that Howard Schultz got the idea for Starbucks by walking by a large number of bars in Milan where locals were enjoying their morning cappuccino or espresso. He scribbled "America's pub" on a bar napkin, the idea being that America had nothing like the British pub where friends and neighbors could gather and talk.
If you had to write your plan for this business on a napkin in just a few words, what might they be?
Waldon: My two words would probably be "escape hatch," which is also what we call our private meeting room at Departure Lounge. Our brand tagline is "Your Place to Escape," and the double meaning for this slogan is key to our brand DNA. We are both a great place to escape for an hour or two and a great place to plan a real escape to the best places on earth.
Italians are passionate about their coffee and lifestyle, and Starbucks has helped spread that passion around the globe. Departure Lounge pleases the taste buds and provides a great gathering place, but it also taps into wanderlust and triggers great travel memories.
Right after 9/11, you may remember that I created a slogan for the Virtuoso network, and it was "Boundaries divide. Travel unites."
I grew up in a small, backwoods town in northeast Texas, where most residents don't get to travel much. When people are isolated and don't get to experience other cultures, they sometimes develop prejudice and fear toward things they don't know or understand. Travel is a bridge to understanding and compassion.
My dream for Departure Lounge is that it can have some role in fostering that breaking-down of boundaries, and it can serve as a community's portal, whether virtual or literal, to discovering a world of diversity that should be celebrated and not feared.
While that last statement may sound like a scripted statement used by a pageant queen, I assure you that I'm a 47-year-old bubba from Texas, and I'm earnest about that dream.
By the way, I'm drinking Departure Lounge coffee as we speak.