Travel club takes 'advantage' of Cendant's pull

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NORWALK, Conn. -- Although the name Travelers Advantage may be a new one to your agency, the members-only travel service quietly has become a force in the trade.

For starters, it booked $500 million in leisure sales in 2001.

Moreover, it claims to beat Expedia, Travelocity and Orbitz on price more often than not.

And, with the negotiating power of 2.5 million members, it has preferred deals with major suppliers in every category.

Travelers Advantage is one of several membership clubs, along with shopping, health and entertainment services, operated by Trilegiant. Formed in July 2001, Trilegiant is a privately held Cendant affiliate that's owned -- and in large measure run -- by the former managers of Cendant Membership Services and Cendant Incentives.

Cendant and Trilegiant are joined at the hip. Cendant last year outsourced its membership and loyalty business to Trilegiant, pumped $100 million into the group to support its marketing efforts and provides Trilegiant with a $35 million, revolving credit line.

When consumers telephone Travelers Advantage, which describes itself as a "travel-service intermediary," they reach one of the 1,500 res agents of Cendant's in-house agency, Cendant Travel, in three call centers: Denver, Oklahoma City or Nashville.

And when travelers telephone Cendant subsidiary Avis to reserve a car, they are invited to join Travelers Advantage.

In addition, Travelers Advantage sells a wide array of Cendant hotel and vacation rental inventory, although an official pointed out that the club, which was formed in 1985, partnered with many of those properties before they belonged to Cendant.

So, how does Travelers Advantage work?

For an annual fee of around $80, members can call a toll-free number or visit www.travelersadvantage.com and access discounted tour packages, flights, hotels, car rentals and cruises.

Formerly a Sabre customer, the club switched its Web site to Cendant's Galileo in July.

The club offers a lowest-price guarantee on air, hotel and car rental reservations, and members receive 5% cash back on eligible travel reservations when they complete their trips.

From what it calls its Airline Savings Certificates to Hotels at HalfPrice, Travelers Advantage offers members deals that often are unavailable to the general public.

Of course, you have to be a member to view and book the full slate of inventory.

Travelers Advantage can negotiate these discounts because of its clout and below-the-radar presence.

"We are really large," said Travelers Advantage vice president Julia Ryan. "And we are in a closed loop. Service providers give us special discounts and don't consider it public because we are a membership service."

A random sampling of Travelers Advantage's offerings shows them to be competitive with online products:

• Seven-day Disney Park Hopper Plus tickets, for example, were a few dollars cheaper through Travelers Advantage than at Disney Online.

• A seven-night stay at the Lahaina Ohana Maui Islander in November was $262 per person (or $249 after the 5% rebate) through Travelers Advantage compared with $272 per person at Expedia.

The vast majority of Travelers Advantage bookings take place over the phone. That's not surprising because the club's Web site is primitive.

When users select "Get A Price Quote" for a three-night stay at the inclusive Moon Palace in Cancun, Mexico, they must e-mail their vacation quote request instead of receiving a real-time response.

Travelers Advantage promises a rate-quote response in an Internet eternity -- one business day.

"People are focused on the Internet and have the impression that's where to get the best rates," Ryan said. "We're able to provide better rates."

With Cendant funding its growth, Travelers Advantage has ample marketing ammunition as it targets what Ryan termed its "middle-America" membership base.

The club's business is based on acquiring new members, and one of the ways it grows is by operating clubs -- and soon client-branded Web sites -- for large banks, oil companies and retailers.

The travel service, though, may evolve and target new demographics, Ryan said, as it explores expanding into upscale and Hispanic markets.

In addition, Travelers Advantage is considering new ways to leverage its Cendant relationship, including partnering in a membership service for Cendant's Trip Network.

As Travelers Advantage explores its options, it's enabling its members to do so, as well -- and sometimes in unusual ways.

In partnership with Space Adventures, for example, Travelers Advantage is running a sweepstakes promotion, with the winner flying on a Russian MiG-25 "to the edge of space."

High-visibility stuff from a company that likes to stay below the radar.

Clubs target products to members

NORWALK, Conn. -- With the exception of a few firms that handle their bookings, travel agencies essentially are on the outside looking in when it comes to supplier sales through travel clubs.

That represents a potential loss to the trade.

Forrester Research conducted an offline survey of 8,000 U.S. households in April that found that while 2% of leisure travelers belong to fee- or coupon-based travel clubs, the average annual household income for these club members was $63,100, and they averaged five leisure trips per year at a total price tag of $3,325.

Travelers Advantage "is probably the Carnival of travel clubs," said Michael Thiel, founder of an upscale travel club, Hideaways International Travel Club, in Portsmouth, N.H.

"From a suppliers' perspective, the best clubs do a good job of targeting their product to their membership," said Thiel.

"It's extremely difficult to launch a new one and be successful," he added. "That's mainly because they don't differentiate themselves and deal with appropriate niches. And the marketing costs are fairly high."

It remains to be seen whether clubs like Travelers Advantage will increase their foothold or whether the Internet will hurt them.

As for online competitors, "Travelers Advantage doesn't have the playing field to itself anymore," said Forrester Research senior analyst Henry Harteveldt. "Others will harness technology to attract and retain customers." -- D.S.

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