Sometimes ignorance is bliss, as in, opening a luxury travel agency in the depth of a major recession. That’s exactly what Craig Carter, CEO and president of Irvine, CA-based Luxe Travel, did in 2008.
Nearly a decade later, however, the move has worked out for the best. Carter’s agency currently services a healthy luxury leisure market as well as a very strong corporate business segment (think medical, entertainment and sports), with all offices on track to pull in a combined $450 million in sales this year.
After working for American Airlines from 1991 to 2003, most recently as regional manager for sales and marketing for Southern California, Carter left to pursue his own travel business. “I was just an airline guy,” he says before his move to the agency side.
Why the move? An opportunity had presented itself when American began consolidating the number of relationships it had with travel agencies. “They were cutting contracts left and right with agencies,” Carter recalls. His thought? If he could aggregate these agencies, he could help them continue to make, and potentially even enhance, their contracts. And so Carter left the airline in 2003 and began collecting, and eventually buying, agencies as affiliates. Luxe Travel was officially born five years later from this venture.
The timing was interesting, as the United States was headed toward the depths of the “Great Recession.”
“Fortunately I was blind to that,” Carter says about his decision to open in 2008. His primary goal at the time was to communicate that, although the Luxe Travel brand was relatively new, the team that comprised it contained some of the most seasoned travel professionals from all areas of the industry.
Luxe Travel initially exclusively sold corporate travel (today, it makes up roughly 70 percent of its sales). Carter, who had a long list of clients he had worked with at American, was also able to penetrate the entertainment industry to build his clientele. “We had a production desk at American that fell under my responsibility, so a lot of the entertainment accounts were something I knew,” he says. And that sector was keeping its head above water, despite the economic downturn.
“What happens frequently with recessions is that one particular industry will get hit incredibly hard, but another will pick up,” Carter says. “In recessions, people tend to cocoon and therefore the entertainment industry is out filming left and right.” Musical artists were reviving their tours as well, since people wanted to be entertained so they could forget about the recession, he adds.
Comfort and value were the biggest factors when convincing his potential clients that he was the best option for them. With an airline background, Carter could obtain the waivers that the artists needed. Negotiating for club memberships and reduced pricing for transporting equipment were other perks he could provide, which was vital for his clients with traveling bands. “No matter how much money someone has, everybody wants to make sure that they are getting the best price,” he tells us.
Carter is mum on who’s on his entertainment roster of clients, but assures us, “These people are very, very well recognized names.”
With this strategy in full swing, he led his company of about 20 advisors through the downturn.
It all paid off. Today, Luxe Travel has more than 100 full-time employees (75 of whom are advisors) and another 100-plus independent contractors under its umbrella. Along the way, he varied his clientele. Through his entertainment clients, Carter was able to permeate the sports entertainment segment. Luxe Travel now has several NFL athletes on its list working with sport management companies that manage and market professionals. Luxe also organizes travel for the MLB’s Texas Rangers and NBA’s Orlando Magic. The agency is currently bidding on the Los Angeles Rams, which could work out since Luxe Travel and the team are both partners with American Airlines.
He won’t attribute his decade with the company as the sole reason why he has such a beneficial relationship with the airline industry (he has other former airline executives working for him), but notes, “Sometimes airlines can be very serious organizations to work with if you really don’t know what to ask for or how, or what they really are seeking when they want to partner with you.”
Luxe Travel’s involvement with the medical field started via word of mouth, but then it progressed quickly to hiring additional advisors and creating marketing campaigns. Bringing on an independent contractor who was familiar with the medical industry and had about $13 million in sales didn’t hurt either; another employee was hired for its marketing team to advertise to the biopharmaceutical start-ups in Silicon Valley and San Diego. Today, many of those companies are doing “very, very well,” according to Carter. In the interim, that advisor’s sales have jumped to $30 million.
This was a tactic that Carter found to be effective and continued to replicate it, leading to his company’s current success.
The move into leisure came when Carter realized many employees of the corporations Luxe Travel handled were booking their own vacations. Carter decided that needed to change — and quickly.
“Officers at various corporations were calling us to do their luxury travel. You know, ‘Book me a yacht in Monaco,’ or, ‘Get me a private jet somewhere out of Frankfurt to Greece’,” Carter says. “We didn’t do that stuff, and I came to the conclusion that we’re just throwing away opportunities.”
And so he sought out advisors who were successful sellers of luxury leisure travel. This time, however, he took it a step further and simply bought entire agencies.
Luxe Travel’s leisure segment grew fairly rapidly after that. It hired additional back-end employees and joined Signature Travel Network, whose amenity programs were attractive to leisure travelers. Word of the benefits, which include exclusive perks such as free transfers, upgrades and breakfasts, spread throughout the Luxe Travel network of offices “which kind of proliferated itself out to all our offices in word of mouth, and growth and reoccurring business just happened as a result of it,” Carter says.
Seven years since joining Signature, Luxe Travel has expanded its luxury hotel programs to the point where, now, it belongs to Classic Vacations’ Million Dollar Club, Rosewood Elite, and The Ritz-Carlton “Ritz STARS.” It’s also a Four Seasons Preferred Partner.
While Carter gives plenty of credit to Signature for the expansion of Luxe’s luxury leisure sales, the agency deserves credit of its own. For instance, it has a team of dedicated luxury cruise advisors, [email protected] that sells numerous brands and nearly every destination. Looking to add an adventurous shore excursion? Not a problem - the agency can help organize a private tour.
Nearly all of Luxe Travel’s leisure advisors have a specialty — whether that’s a destination or a brand. Carter prefers his destination advisors to be multi-lingual or, even better, to have lived in that destination. He says that despite the recent unrest in Europe in the past year, it remains one of Luxe’s top destinations from the U.S. Specifically, vacations to London, Greece and the Mediterranean are up.
Mexico is another hot destination. Zika never proved to be a huge issue in the region for the agency; rather, its clients were more concerned about safety. Carter credits the destination for marketing itself as a safe, high-end place to go. With its West Coast base, Luxe sells a lot of travel to Los Cabos and American Airlines, Delta Air Lines, United Airlines and Alaska Airlines are all increasing inventory in the market from California. Private jet travel to Mexico is also on the rise, which speaks directly to Luxe’s clientele.
Handling that clientele with kid gloves is a key Luxe Travel strategy. Recently, a family of 16 was set to go on a cruise leaving from Florida when Tropical Storm Cindy caused their flight and cruise to be cancelled. The family’s advisor pitched them the One&Only Palmilla in Los Cabos. The advisor detailed the various amenities the property has, including access to beachfront, yachts and private planes; the natural beauty of the location on the Baja Peninsula only helped the sell. When the family okayed the idea, the itinerary was put together in one afternoon.
The advisor then called down to the property to explain that the family needed to be very well taken care of — and they were.
Refunding deposits weren’t an issue, either. Carter explains that Luxe has a waiver program with its partners in the event of inclement weather (“or whatever circumstance may arise”) that gives them the ability to receive either a full refund or postponement of the trip. Since time was an element for the family — having already taken off — Luxe opted to have the money refunded and allocated it toward the Mexico trip.
A large segment of Luxe Travel’s leisure sales come from families and multigenerational travel. Many are taking cruises, Carter explained, with Paul Gauguin, Seabourn or Crystal, but just as many are opting for experiential travel, all while staying at luxury brand hotels.
Although one of Carter’s strategies has been to purchase smaller, niche agencies (Luxe already has seven), you won’t find Luxe Travel-branded offices all across America. That’s because many still operate under their own name. “I’m not going to ruin a good thing that’s already been tested and proven,” Carter says.
When looking for a company, Carter says he seeks destinations “that have the economic base…to handle a very luxury, high-powered office.” Luxe Travel-affiliated agencies can be found in Beverly Hills and Century City, CA; Chicago and Dallas. It’s on the verge of adding two more — one in San Antonio and a second in Dallas. Luxe even has its sights on expanding abroad. Carter was on a phone call with a representative in London in search of a new office just before we spoke.
“The fact is, in the entertainment industry, having a London presence makes us more competitive,” he says. “Not to mention, Europe is still our number-one destination for leisure, especially high-end leisure, and having a London office allows us to focus on supporting our clients…that may need support.”
You will be able to find additional Luxe Travel offices, however, in Boca Raton, FL — one each for leisure and corporate — and in Beverly Hills.
All of the affiliated agencies receive the same benefits that advisors working directly for Luxe receive. These include Luxe’s “best in class airline contracts,” its preferred partner relationships and benefits offered by Signature, including a free luggage-shipping program.
A Mix of Old and New
Carter says that his agency’s relationships with its suppliers and with its affiliates are equally as important, and that they must all work in sync to provide the best services for each other.
“We’re very relational in how we manage [our suppliers and affiliates]...We’re nothing without our suppliers and what they can do for us, but we’re also nothing without the affiliates, in terms of how they support us. And they appreciate the things that we bring to the table…that allows them that special amenity or upgrade on an airline that they wouldn’t get if they were just solely working by themselves.”
To keep the company feeling whole, Carter organizes at least one yearly summit, more often than not in Orange County. This year’s will be at the Ritz-Carlton. Affiliate agencies and independent contractors are invited as well. These summits usually run more than a week to help facilitate as many schedules and offices as possible.
Craig Carter and wife Amy Carter explore the Great Wall of China
Unlike many other agencies in 2017, Luxe Travel’s leisure offices, in Boca Raton and Irvine, handle a high number of walk-ins. Carter credits that number in the Florida branch to its excellent location in a high-end shopping center. At the Irvine office, on the other hand, Luxe Travel recently hosted a marketing campaign directed at seniors in Orange County. The retired community has both the time and the discretionary income to spend on vacations, and by using a walk-in approach, as many in the community may prefer, Luxe benefitted greatly.
Approximately 65 percent of Luxe’s full-time advisors work out of their offices, meaning they were more than capable of handling the increase in walk-ins during the campaign. In an effort to be transparent, each advisor has a large HDTV hooked up to their computers on the wall behind them. Clients can see as the advisor searches flights, pricing, destinations — whatever it may be.
Not all of Luxe Travel’s clients are “Matures;” many, if not most, are Baby Boomers. But they fall in a similar category. Boomers are nearing, or are already in, retirement, and they’re the ones booking multigenerational vacations. That isn’t to say Luxe avoids Gen Xers or Millennials. Carter says the agency is seeing an increase in travelers in their 40s. Millennials, on the other hand, “are out there in full force.” Carter explains that Millennials often come prepared when looking to plan a trip. “They want a lot of detail about the trip; they’ve done an inordinate amount of research in advance of contacting us,” he says.
Not all, but a handful of Luxe’s Millennial clients come from Silicon Valley. San Francisco to Frankfurt to London and even New York have been popular bookings for the agency recently.
A free marketing tool that Carter is proud of is his company’s Yelp rating — a perfect five stars, if you were wondering. “People do look at Yelp,” Carter says. He explains that this has also been the reason for a significant portion of their walk-ins.
One review reads: “Luxe is simply the best. The owner, Craig, is a fellow [University of Kansas] Jayhawk, and has treated me like family since day one.” Another common comment: “I wish I could give more than five stars.”
While the internet was seen by many to be the death of travel agencies, it’s turned out to be quite the opposite. In addition to Yelp, Luxe Travel maintains a Facebook and Twitter page. Social media isn’t used as a direct marketing tool, but rather more as an indirect one — “just to inform the public of various new things that are happening in certain destinations.” Luxe had posted to Facebook an update on Los Angeles International Airport’s new Private Suite terminal, where guests can spend their pre-flight time in their own personal suite, complete with its own bathroom, food pantry and two-person daybed - and no paparazzi. The agency immediately received enquiries on the terminal.
Looking forward, Carter is extremely optimistic about the future of luxury travel. The Internet has yet to prove to be the “panacea” to booking travel, as he put it, in the way that many predicted. If anything, it’s only reassured that advisors are just as important as they’ve ever been.
“The relationships that we have with the hoteliers around the world are incredibly beneficial to our clients,” Carter says. “Those particular elements of what we do are critical for our customers, because we give them that special experience as a result of our relationships.”
For Luxe, specifically, Carter has seen a significant increase in advance bookings for 2018 — many of which are coming from multigenerational cruisers. It’s a small step toward Carter’s goals of doubling his company’s size in five years. To achieve this, Luxe will keep on using the blueprint it has followed since its inception: the agency will continue to advertise in specific communities, they’re hiring sales people to help organically create and grow corporate business sales, and Carter plans to acquire agencies that specialize in groups, meetings, leisure and business. The two Texas agencies that Luxe has been negotiating with bring in a combined $420 million. The acquisitions could make Luxe one of the nation’s top-25 Airline Reporting Corporation accredited agencies.
That’s tremendous growth in a short period of time, but Carter finds it quite do-able.
“Our growth has been increasing at a steady rate, which makes it manageable internally and externally,” he says. In order to keep the agency’s service level high while growing its team so rapidly, it has to maintain a very ‘fluid’ structure, says Carter. “We want to enable our organization to grow a little more organically rather than based on a preconceived idea of what it should be.”
Along the way to expansion, however, one mantra will remain key. “Our number-one objective is to offer incredible customer service, which continues to be a competitive differentiator for Luxe Travel,” Carter tells Luxury Travel Advisor.
Headquarters: Irvine, CA
President/CEO: Craig Carter
Chief Marketing Officer: Bill Kramer
Chief Financial Officer: Lili Dalla
Number of Agents: 75, plus 100 ICs
Annual Volume of Business: $450 million
Agency Website: www.luxetm.com