LAS VEGAS — The Virtuoso network continues to grow in size and sales, building upon a foundation of luxury travel products.
Last week, at Virtuoso Travel Week, held here at the Bellagio, the consortium announced it now has 1,000-plus agency locations, up 200 in the past year, representing 17,500 travel advisers, which is 15% more, year over year.
Virtuoso has agencies in 50 countries around the world — Turkey, Monaco and Uruguay are new this year — representing $23.7 billion in sales, up nearly 90% from 2013's figure of $12.5 billion.
"The good news is the number of clients is keeping pace with the network growth," said Misty Ewing Belles, managing director of global public relations. "And I want to point out that this is not just because we're expanding into other countries and bringing new agencies on. A lot of this is organic growth, as well, so I think it means that the agencies are growing, they're prospering, which is why the adviser growth is there, as well. For the last five years we've seen a 126% increase in the number of advisers within this network."
The number of high-end clients has also increased by 156% in the past five years, she said.
A number of groups have made pushes into the luxury space in recent years. For example, Travel Leaders Group merged with Altour and has acquired several luxury agencies, including Andrew Harper Travel. A number of host agencies have also reported their independent contractors are selling more luxury products this year, helping to boost their annual incomes.
Combined with the success of Virtuoso and other luxury players, it begs the question: At what point will there be too many agents selling luxury products? For now, it appears the answer is "not any time soon."
"I think we're a long way from there being too many advisers selling luxury," said David Kolner, Virtuoso's senior vice president of global member partnerships. "The No. 1 competition of a luxury travel adviser is not another luxury travel adviser, and it's really not even card affiliation or loyalty programs that are out there. It really is do-it-yourself. There is a bottomless pit of do-it-yourself that's out there."
Kolner said travelers with a DIY mentality are major competition for all levels of the travel agency channel, not just luxury. But Virtuoso, specifically, is trying to bring more consumers to luxury advisers. New luxury products are also being brought online, creating even more future space.
"There's going to be a lot of expansion of product availability," he said. "And as affluence increases around the world but also people are on this trend of wanting to spend more on experiences and also valuing service, I think those things combined trendwise have a long, long runway in front of them."
Consumer demand is also there.
According to Belles, among Virtuoso's best clients, the ones who account for 40% of the network's sales, research shows 75% agreed that luxury will always have a place in their lives. Similarly, 75% agreed that luxury brands are worth the cost, and 71% said they expected to spend more on luxury travel this year.
Becky Powell, president of Protravel International, a Virtuoso member agency owned by Travel Leaders Group, pointed to demand from millennials. Several studies have shown that age group, usually defined as between 22 and 37 years old, to be the most likely to use agents. And they are using luxury agents, Powell said.
"They have these unbelievable jobs at tech companies, and they don't buy cars, they don't buy homes, they spend their money on travel," she said.
Sharon Fake, director of operations for the host agency Travel Experts, agreed there is room for new agents coming in. She referenced a lunch with Silversea Cruises she had attended at Virtuoso Travel Week; the cruise line said some of its clients were in the so-called 1%, but a "huge and significant chunk" are in the 10%, offering opportunities to agents in that space.
"I definitely think there's a lot of room," Fake said. "Is there a lot of skill? That's the gap."
Agents entering into luxury tend to have several factors in common, she said. They are motivated, they are confident, and they are willing to learn the "nitty-gritty," such as the procedure to properly complete a booking.
"It comes with experience," said Claire Canady, Travel Experts' manager of North Carolina operations. "There's not a shortcut to it."
Kolner agreed with the notion that luxury can be segmented into different classes to suit a variety of consumers.
"Even within luxury, it's important to have an idea about the type of clients you'd like to target as part of your business," he said. "I do think a lot of luxury travel advisers have a mix of clients. They have clients that are superaffluent, and then they can have clients that are just modestly ultrahigh-net-worth clients but just love to travel."