NEW YORK --
Houston-based Frosch International Travel, a $250 million business
with 14 locations in nine states and a member of Virtuoso for 20
years, will leave that group at the end of the year and join
Signature Travel Network, a smaller but growing co-op for agencies
focused on high-end leisure travel.
In a press
release, the agency publicized its reasons for leaving Virtuoso.
But in its own announcement, Virtuoso said it notified Frosch on
Dec. 1 that the trade group was terminating the agencys membership.
Regardless of which came first, its clear the parties interests had
diverged.
The addition of
Virtuoso, Ensemble and other agencies plus organic growth by
existing members has fueled a striking rise in volume for
Signature, from $1 billion-plus last May to more than $2 billion in
the new year, counting both Frosch and New York-based Tzell Travel,
a $500 million agency that switched from Ensemble to Signature this
year. Frosch will represent 12.5% of Signatures volume.
Differences over branding
Frosch President
Bryan Leibman said his firm determined that its business model and
that of Virtuosos are no longer aligned. He said Virtuoso is
committed to the promotion of its brand, whereas Frosch wants
clients to see only one name -- Frosch.
Signature
Executive Vice President Ignacio Maza said the group has gained at
least three other members from Virtuoso in the last couple of
years, and the main reason is Virtuosos approach to branding.
Signatures new member agencies want only their own names in the
public eye, he said.
People change
[affiliations] because their business models change; they have
different strategies, he added.
Keith Waldon,
Virtuoso vice president, alliances and travel clubs, defended
Virtuosos approach to branding.
The development
of the brand is so we can bring appropriate new opportunities to
agencies, and we promote the agencies and even individual agents;
we dont make them secondary, he said. Our branding allows us to
build partnerships with luxury brands like Neiman Marcus and
Bergdorf Goodman that members couldnt secure on their own. I think
99% of our members would agree [with the strategy].
Not
enough bang for the buck
Leibman also said
he believed that Frosch was not getting its moneys worth with
Virtuoso. For example, he said the required marketing spend was not
creating enough bookings at Frosch to cover the mailings, whereas
for different members, there is a different experience.
Another factor,
Leibman said, was that Virtuoso is a privately held, for-profit
entity whereas Signature is a nonprofit cooperative, hence focused
on the interests of a different set of owners.
He said Frosch
decided months ago to leave Virtuoso, and he did not know why the
agency did not survive Virtuosos cut.
However, he said,
Virtuosos CEO, Matthew Upchurch, knew how I felt ... maybe that was
the reason.
Kristi Jones,
Virtuosos president, declined to specify why Frosch was terminated;
a few other agencies did not make the cut, either, but she declined
to give details because we try to make our decisions privately, and
because all terminated agencies have the opportunity to
appeal.
Over the years,
she said, Virtuoso has reviewed its members but was more formal
about it this year. In other trade groups, members are sometimes
terminated for failure to produce for preferred suppliers, but in
Virtuoso, Jones said, that is almost a nonissue.
Rather, she said,
Virtuoso looks at something more subjective: Is the net gain [from
each membership] beneficial to the entire network?
We know Frosch is
looking for a different sort of relationship, and we truly wish
them the best, added Jones.
To contact
the reporter who wrote this article, send e-mail to Nadine Godwin
at [email protected].