When David Hu of Classic Vacations attends industry events, he’s not surprised upon occasion when people ask him what he does for the luxury travel company. When he responds that he is the president, he’ll sometimes get an embarrassed grin from someone feeling foolish to have asked. Hu, who has led Classic for nine years, doesn’t mind the question one bit. He says it’s more about the team members at Classic, who help him run the custom travel company on a day-to-day basis, than about him.
“Ultimately, it’s about the brand, it’s about the company; it’s not about me, so whether I’m here or somebody else is, ultimately the company is still solid,” he tells Luxury Travel Advisor.
And the company is solid: It’s turning 40 this year, and while some travel advisors may still think about it as “Classic Hawaii,” its original moniker, Classic is now in 11 regions, including Europe (1996), the Caribbean and Bermuda (1998), Mexico (1999), Australia / New Zealand (2007) and beyond (see sidebar). Last year, it launched in Asia, with an initial focus on Southeast Asia and plans to expand further.
As a wholesaler selling FIT vacations, Classic, which is based in San Jose, CA, sits squarely in the luxury sector. Indeed, 80 to 85 percent of its sales are in the 4.5-star and above space, says Hu. And because of the strong business it does throughout the world, its reservation agents and business development managers regularly leverage its relationships with the top hotels to “VIP” its customers in the form of arrival amenities, personalized notes to clients and upgrades, depending on availability. The strong relationships with Classic’s hotel partners also mean that last-minute reservations can happen seamlessly, Hu notes.
A Focused Segment
Classic Vacations sells strictly to the travel advisor market, which might seem odd for a company that’s owned by Expedia Group, Inc., the travel platform that also owns consumer-direct sites such as Hotels.com, Expedia.com, Trivago, HomeAway, Orbitz and Travelocity, among others.
When Expedia acquired Classic (then known as Classic Custom Vacations) in 2002, it caused a rift in the travel advisor community, with concerns that Classic could end up selling directly to consumers. The strategy has instead been the opposite, to hone the benefits of selling through travel advisors, who tend to upsell their clients, as well as provide that essential travel consulting that enriches the overall vacation experience. That rift has long healed as Classic Vacations has used the power of its parent company to enhance its offerings.
“We went the complete 180 degrees and realized, why be in competition with travel advisors? Why not take the benefits of what Expedia brings, and give it to the travel advisors, and enable everybody to profit and do well with it?” says Hu.
As an example, Classic at one point had 800 hotels in its portfolio that it had carefully curated. That inventory was expanded four years ago to include the portfolio of Expedia Affiliate Network hotels, which filled in gaps for travel advisors trying to build complex itineraries. Now having access, say, to an airport hotel in Athens, could mean the difference between a travel advisor booking, or not booking, through Classic.
“Sometimes it drove me nuts when people would say, ‘Out of an eight-night trip, we’re missing one or two hotels and we can’t book with you,” Hu recalls.
Since Expedia links directly to hotel booking systems, customer service issues went way down, because there was no longer a need to deal with e-mails and faxes, Hu notes.
The move to layer in the Expedia hotels was done carefully, he says. “We slowly launched it and we had to be very careful with the messaging to get people to understand that this is really to your benefit. Since then, people have realized, ‘Hey it’s great to have one of place to go for everything and be able to put it all together, and put it all in a seamless itinerary,’” he adds.
David Hu says, “We are striving to make every part of the travel planning process easier, so that the travel advisor can spend their time doing what they do best: creating perfect memories for their customers.”
Tools for Travel Advisors
Using technology to enhance the travel advisor experience has been the major focus for Classic Vacations over the past few years and you could say the ultimate goal for the company is to enable the advisor to take advantage of Classic’s white-label FIT services, put their own name on sophisticated itineraries and do it all, or as much as possible, in a point-and-click fashion.
During the recession, the company made a major overhaul to its technology offerings for advisors and rode the wave of its success for several years. But in 2016, the Classic team took a long hard look at what it was offering and revamped its technology again. This meant the company underwent still more change, well into 2017.
What changed? You could say it was Classic’s overall mantra about what it really is. Yes, it is a provider of travel services, but it’s also a service for travel advisors. “Fundamentally, we’ve been working to become an organization that helps travel advisors become more efficient on the front-end, meaning all the trip-planning and advising at the beginning of the sales process now tie easily into the booking element,” says Hu.
Over the past year, Classic has built a suite of tools that allow travel advisors to create custom proposals, quotes and itineraries. In a Pinterest-like fashion, custom proposals allow advisors to quickly grab a selection of hotels and tours, add their own comments and share them with clients in a private-label format. The process takes just minutes, and the client can review hotel descriptions and photos on their phone or any device.
Custom proposals can also be saved to an agency library, which enables knowledge sharing between travel advisors. “With each of these features, our aim is to make the sales and booking process more efficient for travel advisors, and at the same time we’re providing clients with the information they expect, in the format they are using most often — their phone,” says Hu.
Adoption rates are steadily getting higher, but Hu is quick to point out that the system doesn’t replace the aspects of what Classic is known for, in terms of product or service. “It really tries to augment that and help facilitate the travel advisor to be much more efficient and proficient in terms of attracting and retaining clients, as well as being able to promote more offerings,” says Hu.
If a travel advisor wants to use the new booking system to do much of the legwork, then send it to a Classic reservations agent to complete the deal, that’s fine, too, he says.
“We’re trying to do business the way that our customers want to do it,” Hu notes.
There is still very much a human side to Classic. In fact, many of its team members have close relationships with luxury travel advisors, helping them carve complex itineraries for demanding clients, or helping them out in a pinch. The average tenure in its call center is about seven to eight years, with some stretching to as many as 30 years. As an example, Cindy Scherr-Zimlin, a strategic account manager, has been there for 21 years and Connie Tracy, the account development specialists supervisor, for 30. Jeanne Flood, the senior manager of groups operations, has been with Classic Vacations for 28 years.
And how about helping out in a pinch? One Christmas Eve morning, a distressed travel advisor contacted Paul Giannini, a strategic account manager, whose tenure at Classic Vacations is 11 years. The advisor had booked a family late in the season for a festive season booking in the best available remaining space. Upon arrival, the clients called the advisor, furious; they didn’t like the resort at all. And so, the challenge was to find space for this family with three children at another resort on the island the day before Christmas.
Giannini got to work with the inside team at Classic to solve the problem. “We phoned each resort and within six hours we had confirmed connecting rooms at a property on the same island,” he says. “The guests were thrilled and had a wonderful holiday.”
Louanne Warren of Maupin Travel provides this testimonial: “I was on the phone with Sharon early this morning and she solved a major issue for a honeymoon couple leaving on May 14. Thank goodness for Classic insurance and how wonderful all the agents are. I am so happy I book with Classic. Over and over again they amaze me in times of crisis.”
Leatta Perdue of Vacations Department says this: “The agent who helped me was beyond exceptional. It is so rare these days that I call a vendor and the agent I work with is so good that I completely trust everything they say. She redeemed my confidence in your company and I look forward to making many more bookings with you.”
Linda Schreiber of Starship Travel says, “I gave Classic a booking for 50 people to Secrets. The service I received from the Classic Groups Department was the best I have ever worked with in 31 years, from quoting to booking to documents!
Classic Vacations, based in San Jose, has 200-plus employees, whose roles range from technology to marketing and trip planning.
Strong Financial Past
David Hu has been with Classic Vacations for 11 years; for the past nine, he’s been the president. With a strong financial and corporate background, he’s enjoyed discovering the “people” element of the luxury travel business.
“You get to learn all the various different nuances and all the different personalities within the industry. It’s been a good ride to learn to understand all of that,” he says.
Armed with an MBA and experience in some of the major financial firms, you might say he’s surprised to have stayed so long at Classic. He says now it’s less about his career path and more about his career at Classic. “It’s about ‘How do I build this business?’ because I really had a lot of the raw materials when I first came in. I had a great brand, good people and a great following. [The question was] ‘How do we make all the various ingredients work to make it a great company?’”
Hu was born in Taiwan and raised in northern California by a family with a true entrepreneurial spirit. They, at various points, owned a roller skating rink, a small motel and a restaurant. When Hu was 15, his parents returned to Asia to launch a new enterprise; he stayed in the U.S. and eventually graduated from U.C. Berkeley. It was 1992 and the country was in the middle of a recession. He wound up at Coopers & Lybrand, the accounting firm, took a leave of absence after just three months and went to Asia to work for his parents for nearly 10 months while his brother tended to his new family. When he returned to California, he was intent on making it on his own.
“Unlike a traditional Chinese family where everybody goes back and works in the family business, I said, ‘No, I’m working on my own career track,’” says Hu.
Things progressed well at Coopers & Lybrand and after a promotion he asked to transfer from San Francisco to Hong Kong. During the three-year stint, he worked in auditing and corporate finance, which he enjoyed much more than accounting. Inspired, he headed back to California to get his MBA at UCLA. He ultimately ended up back in Asia, this time in Singapore, working for three years in the mergers and acquisitions division of Morgan Stanley. By now it was 2003; he and his wife had a child and the two decided to return to California to the familiar environment they had grown up in.
At a crossroads, Hu sought the advice of some private equity acquaintances; they complimented his professional resume, but noted he was lacking operational experience.
“Fair point,” said Hu, who as a result took a consulting assignment to turn around a small travel company in the Bay Area. The owner of the company referred Hu to Hotwire, which was owned by Expedia. Hu ended up as Hotwire’s CFO; a few years and a few promotions later, he ended up as the CFO of Classic Vacations, working with Tim MacDonald who was president at the time. When MacDonald left, Hu and Greg Bernd, who headed up sales, ran the company as co-presidents. Hu ran the company on its own after Bernd left seven years ago.
Throughout his tenure, he’s been applying his corporate expertise to refining exactly what Classic Vacations is all about and how it can better serve travel advisors. In addition to his strong focus on technology, Hu wants to make sure that Classic is providing stellar service throughout the entire travel process and not just in times of crisis.
“To me, it’s really about talking about what we do to help [travel advisors] get through this entire process and to think about us as, ‘Hey, we’re your partners in terms of getting that customer. We’re your partners in terms of making sure that customer has a good time traveling. And we’re your partners in terms of trying to get that client back to you after the travel,’” he notes.
For this reason, he says today’s Classic Vacations is not the Classic of yesteryear.
“We have put ourselves in the position to work with the most modern travel advisors with all the offerings that we have, and whether you work digitally, or you work in a call-center, we can work with you whichever way you want,” says Hu.
The company is always listening to advisors and it invites a select group to its annual President’s Circle event to get feedback and to discuss issues related to the company and the industry.
In Their Shoes
Classic recently redefined its core values: They now fall under the pillars of “Build, Deliver, Win and Care.” For the “Win” pillar, it was all about acting more quickly. “We need to think as if we are the client. We need to understand what their needs are, and not dictate what we think their needs are…to really ask the right questions,” says Hu.
That philosophical shift prompted some changes. Today, the team that’s on board is much more aligned to think about what it’s like to be in the shoes of the travel advisor. Hu coaches his sales team to find out what the pain points are for travel advisors and what Classic can do to solve these problems.
“We have an entire toolbox,” says Hu, “But the goal should not be to sell the entire toolbox. It should be to understand what their problem is and then to use a specific tool to solve a specific problem. When you help to solve their business problem, you become a partner at a different level.”
Rounding out the experience
Travel advisors tend to book a lot of hotel suites through Classic, but Hu says what’s important is what it can provide clients beyond the suite, which after all, are a commodity that other companies can also sell.
That’s where Classic’s concierge desk comes in, with the ability to fill in the experiences that make the trip, such as restaurant reservations, rail tickets (with luxury transfers to the train station), golf tee times, and private car and driver excursions, for instance, to the Normandy Beaches if you’re visiting Paris.
Hu tells Luxury Travel Advisor, “We have access to almost all the suites that you could possibly want, but the reality is for that high-end customer, rarely are you just going to that suite. If you’re going to Paris, you’re going to want to go to a Michelin-star restaurant and then you’re going to want to go to London. Those various pieces are things that we are layering on into the luxury travel experience, rather than just saying, ‘Hey, we can book that hotel or that hotel suite for you.’ It’s what you do once you get access to inventory, and what you build around it that really creates the experience and really where the travel advisor adds value, because ultimately that consumer can call the hotel and book directly.”
Classic is using the platform of having been in business for 40 years to say that as an industry, “We can do more,” says Hu. “If we’re able to help people travel, to see the world differently, then we help the world in a different way. That’s what our team is striving for.”
What’s ahead for the next 40 years? Hu says Classic is certainly evolving to help travelers enjoy more authentic experiences in a wider range of destinations. But, as always, it comes back to the travel advisor.
“Our mission is to develop solutions that are relevant to today’s travel advisor,” Hu tells Luxury Travel Advisor. “We are striving to make every part of the travel-planning process easier, so that the travel advisor can spend their time doing what they do best: Creating perfect memories for their customers.”
Pictured left to right: Denis Fastert, senior director, operations; Bari Jain, senior director, marketing; Dajana Levy, director, technology; David Hu, president; Jonna Jackson, head of strategic partnerships; Chris Griffith, VP-GM, groups; Sharon Conway, director of finance.
For Classic, Asia is the Next Frontier
At our tour operator roundtable in New York earlier this year, David Hu, president of Classic Vacations, discussed global growth for the company, which is turning 40 this year. He noted that Classic has been in Europe since 1996 and has a stronghold in the major destinations.
“We’ve been adding on, so there are now a lot of tertiary destinations, as well. We’re seeing great results because now you’re able to do multi-hops throughout the entire continent. People can do two nights in London, hop over to France and keep going. Having that complete inventory base allows people to explore on a more comprehensive basis,” Hu noted.
He said Classic has also added on many port cities to handle post-cruise business. “In Europe, we’ve done a lot to fortify the product portfolio.
“We’re seeing a lot of desire for experiential travel beyond the core beach destinations. People are saying, ‘I want to be able to come back and say I did something different.’”
Classic Vacations launched Asia last year, “as a trial balloon,” said Hu.
“We found significant enough demand so we’re going full-board, especially for Southeast Asia. There are a lot of different destinations there, where if you don’t go soon, they won’t be the same in the future. There are a lot of other places within Asia that we’re looking at to complete the entire portfolio,” said Hu.
“We would also love to look at Africa, but the problem is that it’s a much different product to sell from our perspective. Asia is the next foray in terms of product for us,” he added.
President: David Hu
Head of Sales: Dave Ferran
Sr. Director, Business Operations: Denis Fastert
Head of Marketing: Bari Jain
Head of Strategic Partnerships: Jonna Jackson
VP-GM, Groups: Chris Griffith
Locations: San Jose, CA and Summerlin, NV
Satellite Offices: Athens, Greece and London, UK
Offerings: 11 destinations, including Asia.
Curated Hotel Product: 5 Star, 4 Star and Boutique, Expedia Affiliate Hotels, Curated All-Inclusive Collection, Pre- and Post-Cruise, Preferred & Viator Experiences Groups (Destination Weddings, Corporate, Multi-Gen)
River Cruises: Scenic Luxury
Sea Cruises: Paul Gauguin, Blue Lagoon and NCL (Hawaii)
Air: Coach and Business Classic Connections
Established: June 13, 1978
Owner: Expedia Group
1998 Caribbean & Bermuda
2006 The Islands of Tahiti
2007 Australia & New Zealand
2011 Costa Rica
2013 Indian Ocean and U.A.E.
2016 Classic Connections