S14 E01: Matthew Upchurch, CEO of Virtuoso

[music] You're listening to the luxury item, the podcast on the business of luxury and the people and companies that are shaping the future of the luxury industry. Here's your host, Scott Kerr. Demand for luxury tourism and hospitality is expected to grow faster than any other industry segment. This growth is powered in part by a sharp rise in the number of high net worth and ultra-high net worth individuals globally, many of whom are younger and increasingly willing to spend larger shares of wealth on upscale travel options. Here to talk about all things luxury travel is my guest Matthew Upchurch, CEO of Virtuoso, a leading global network of travel agencies specializing in luxury and experiential travel with more than 20,000 advisors and a portfolio of 2300 of the world's best travel brands and destinations. Matthew was a prominent figure in the luxury travel industry. He has led the Virtuoso network since its founding in 1986, expanding its global operations to 58 countries with annual network sales of $35 billion. He also serves as vice chair of the WTTC membership committee for the World Travel and Tourism Council. He has won numerous travel and tourism awards and has been inducted into the American Society of Travel Advisors Hall of Fame and the cruise line's international hall of fame. Welcome to the luxury item Matthew. Thank you for having me, Scott. Great to be here. So you know, your roots are deeply embedded in travel while Virtuoso was officially founded in 1986. The path to the birth of the brand dates back to the 1950s for my listeners who aren't familiar with Virtuoso. I think a good place to start. It's kind of a brief overview of how the company came about and what gap it was filling in the luxury travel market. This is actually I love talking about this origin story because it's so special on my side on my side of my family, my father was one of the founders of the United States Tour Upper Association. So he had built up a company called Personal Tours, which was the first company to open up African safaris in Kenya in 1960s. I always joke with Jeffrey Kent about three years before he got started. The famous giraffe manor there was the home of our managing director. So he did my dad did a lot of things on the tour off the more traditional luxury tour operator side. And so I grew up on that side. So I was actually a supplier to travel agents for many years on that side. But then I got involved with building up our mostly corporate travel agencies in the early 80s when I was in my 20s and developed that. And as we started buying up some agencies, we had a certain amount of leisure travel. And then we bought an agency called Jackson Travel in Tyler Texas that was a member of an organization I hadn't heard about but didn't really fully fully understand and they just blew me away and was called Allied travel. And I love telling the story because. You know, let's just say that by the 80s, you know, to be I don't mean to be cruel or mean, but the travel agent profession, you know, was fairly commoditized really had become more of a kind of a clerical booking job, you know, for the, you know, the use of the GDS and stuff. And if you go all the way back to 1950s, most people don't know this fact more people booked directly with partners with suppliers in the 1950s than even due today. Because you know, dealing with pan Am and dealing with those companies back, you know, post World War two, the beginning of the jet age. And dealing with an airline was like dealing with, you know, walking into an even Marcus right like good service. There was no complexity and airfares because they were all they were all managed by bilateral government agreements. There was no, you know, all this kind of stuff. So to be a travel agent actually in the 1950s is ironically kind of very strongly correlated even to the value today. And you know, you know, you know, you know, you may know clergies in London, I'm friends with a GM. You were the, you were community knowledge, you know, the other customers like you, you were, you know, a super high end kind of executive assistant specialized in travel. And if you were a boutique agency in 1949, and this is where the origin of all I travel was, if you were a boutique agency in 1949, renting a telex machine was a big deal as a small business, renting a leasing a word processor for my B.M. was a big deal. And back in those days there wasn't this new fangle technology, which is kind of funny to even think about it as a technology called a credit card no credit cards. So literally every agency had to have a one if you're going to book hotels, you had to have a one to one credit relationship with every single every single hotel. And then you would have to wire transfer money, right. And then you would have to have a lot of a wire transfer in 1949, if you were booking a couple of nights, you know, three nights that, you know, whatever the the Ritz and Paris, you know, there goes 50% of your of your profitability. And so what happened is this group of small boutique agencies mostly in the Midwest United States, they got together in 1949. They created Allied travel, opened up an office in Midtown Manhattan 1950. They hired a Swiss guy because the other thing that they that you couldn't find easily in the United States is that to do bespoke luxury, you know, customized travel, you need three areas of expertise, itinerary planning and design, causing and contract and operations. And so the agencies had to go to a tour operator like a personal tours in order that that had the resources and the relationships, the credit that is that to do that kind of stuff. But what they did is they decided that they wanted more control over the product, more control over the margins. And so really what they did is they hired all of those people that were in New York is quite frankly, you couldn't find them anywhere else. And so they were actively, you know, bought and leased all that equipment. They collectively found the experts and all those different areas of expertise. And so if I walked into your office in 1950 and said, hey, you know, Scott, I want to do two days in Paris. I wanted a little lower valley. I want to do this. I want to do that. I would sit there almost like a bespoke like a tailor and I most of the agency owners of the original allied were European expats. So it wasn't like they didn't know the destination. But they would sit down and kind of write, you know, kind of write down a skeleton itinerary, right. And then they would tell you, of course, in those days, people were going way further in advance. They said, well, give me a two or three weeks and they would take the skeleton itinerary sent it to the York where they would pull the train tables off the shelf and all this information, use their work, IBM word processor. And then they would create a beautiful itinerary that was sent back by mail to your agency. And then the number was actually in in Cincinnati, Ohio. And you would walk in three weeks later and here you would have this beautiful day. You know, you're staying at the rich and doing this. You're having dinner here. Then you're going on this highway. You're stopping up the little town. And then you're going to the little this little bistro and then they'll arrive in the North Valley, blah, blah, blah, blah. And everything was done in the name of your agency. So the first 35 years of allied travels history was this kind of cooperatively owned, owned research and operations center that was an extension of that boutique agency. And I think about it. I love telling the story because you know, I did agency sales for my family to company when I was 22 and I apologize if I'm insulting everybody, but I don't mean to, but the industry is a lot different. But after a year of agency sales, if you would have told me that I was going to hang out with travel agents for the rest of my life, I would run out the back doors, fast like good. And I don't mean to be mean of cruel, but then I met the allied members and they absolutely blew me away without incredibly, you know, professional. They were their their their their knowledge of destinations, the detail of whatever. I mean, they were really professional. But what also really, and do's me was the whole way that they had come together to share resources. And that that was something that was very intriguing to me because that's 19, you know, in 1986 and then 1987 the American Express Platinum Card was born and the era of direct marketing started. And that was when all of a sudden you saw this kind of approach to, you know, to big companies coming at them and I thought, you know what, why don't we do in other areas, what these guys have done, you know, in in operations. So we took our, you know, probably the first thing we did to, to make us a network instead of a tour operator is we, we took our global network of DMCs. And we made them available for agencies to go directly overseas and not have a middleman operator to operator. You can imagine how much margin that took off of that and how much more margin it provided, but it also extended the ability, you know, because that's the beginning of the facts machine, you know, that was one of the first things. I'm about to go do a speech at here 66 and Fort Laudel. And it's kind of going to be a very interesting coming home because in 1987 I did a, you know, one year after we bought Allied I did. I did one of my key presentations there wanting to ask people to install satellite dishes at their agencies, install a CRM, but of course I forgot that nobody had a PC back then. And then I did get away with getting them to all install a fax machine. So years, you know, decades later, the ethos are still the same. You know, we're really an organization that comes together to share resources and a common brand. And what happened is I dealt with, I dealt with this incredible group of agencies for what, almost 15 years, little over, yeah, about 13 years. And then in 1997, when the OTAs came along and the airline commission caps happened and everybody was saying that travel agents were dinosaurs are all going to go away. I said, yeah, the ones that are human-vending machines are going to go away. But these people that I've been serving for 15 years, there are 72 million baby boomers coming down the pike. And I guarantee you they're not all going to want to be DIY and sure the cheaper stuff, the whatever, the basic stuff is going to be there. And so in, but I was so frustrated because the zeitgeist at the time was that, you know, all travel agents were just, you know, whatever. And so that's when we got together and eventually rebranded ourselves in January of 2000, you know, three years into the OTA revolution as a virtuoso. So we went from Allied Personal International to API Travel Consultants to virtuoso. And we did that in order to create a consumer brand where people could say, hey, these people are different, right? These are real professionals. And it's been quite a quite a ride since then. Yeah. And you have many esteemed luxury hospitality brands and virtuoso's massive network, including a man, the peninsula, the Elmón, Abercrime and Kent for seasons. Yeah, it's just to name a few. I think there are about 1800 hotels and resort properties overall. What are the criteria for being a property partner with you? First of all, I think what's really important to understand is that virtuoso's very much a co-created organization. What do I mean by that? I mean that we as the management, you know, we really work hand in hand with our members to try to identify what's hot, what's new, what's great, what's what's what's out there. So it's by invitation only, you know, we don't take a brand as a whole brand, right? We take them, you know, individual properties. So we work with our members, a lot of which are specialists and a lot of, you know, in different destinations to really keep at the top of this. So the first and foremost is top of, you know, top of its class for what it is, right? So is it a palace type hotel? Is it a more, you know, is it a, you know, a ranch, a camp of this, whatever. So, you know, in today's world, there's a lot of different categories as luxury has become a lot more than just, you know, gold faucets and fancy things, whatever. There's a very broad perspective. So we basically work with our members out there and understanding what's going on, what's new, what's there. And then the other thing is the relationship and the added value and it's interesting because, you know, when the OTAs came out and the hospitality industry pretty much lost control of its pricing, its pricing and its distribution for almost a decade, from, I would say, from 97 to 2007, roughly, they were, everybody was scurrying around trying to figure out how they're going to protect, you know, what I would do with the OTAs. We went to the, we went to our partners and said, look, you know, what we want to sell your property at your estate ER, right? Because we want to support quality and we want to support this, but you've got to give us something to talk about with our customers. There's got to be some added value or something. Otherwise, I don't care how wealthy somebody is, right? They're not stupid. They didn't get wealthy by being stupid and being taken advantage of. So why don't you give us some benefits? That's when we started coming up with, you know, with upgrades with credits and things like that, breakfast included, things like that, things that we could do where we could get the customer to focus on the value ad. And because of the power of our relationships, you know, the virtuoso clients would get priority, quite frankly. So when people would come in, you know, they would get priority because of the amount of business that we were sending them, because we sent them business all year round, things like that, you know, it's not, it's easy to be full when, you know, it's new years or festive or whatever, but, you know, when we're wherever we'll provide business all year round, it gives us, so it's a combination of quality benefits, but also relationship. And at the end of the day, we really, really focus on a customer should feel different when they walk into a virtuoso property, by the way they're greeted, the way they're done, and the way the GM and everybody else is engaged. So how are your bookings last year versus the previous year? Did you feel the impact of inflation as consumers were a little more cautious with their spending or is it more bifurcated, whereas it didn't really impact the luxury traveler as much? Yeah, it didn't. Our ADR went to a record high in 2024. I can say some of the numbers were up. I mean, we were up, which was absolutely pretty incredible, because 23 was a record in huge growth. And in 24, I just actually got the final updated numbers for 24, and we were up across across all of our categories, almost 24%. So that's a huge number. Our ADR just barely just shy of $2,000 per night. That's our average ADR, not our highest ADR, average ADR. So if you think about that, now you're absolutely right. It definitely did bifurcate. We are starting to see a little bit of pushback in that the cholesterol, they put up with a little bit of the luxury customer and put up with a little bit of call it mismatch between rate growth and service delivery. So we are starting to see a little bit of pushback, but not so much pushback on the rate, but making sure that the rate and the value proposition match. But it's quite impressive. And if you look at it, there's still a, you know, there's still a death. I mean, we, I think the other thing that's really impressive is how far we almost don't even, we rarely today, like, like we're going to be updating our US members next week and for a lot of our annual forum. And we almost don't present sales on a one-year basis anymore, because if you're in the luxury sector, you're as busy right now, booking 26 and 27 as you are 25. Right. So literally in our sales on a two-year forward basis for 25, 26 are already now like 35% ahead. So who are most of your clientele? Are they the ultra-high-knit, worth individuals who just prefer remote, private destinations, accessible via private airport, and tailored experiences available nowhere else? Or are they the more aspiring luxury travelers who perhaps aren't super wealthy? They prefer visibly branded luxury, maybe value seekers, but will splurge on individual components of their travel, that type of thing. Sir, it's all of the above because basically within our network, one of the things that's made our network so successful is that the diversity of the virtue of so travel advisor today basically mirrors the diversity of the luxury traveler. So the luxury traveler today, so when you say ultra-high-knit, yes, we have members that deal with, and we're very specific, right. One of the biggest, one of my pet peeves today is everybody seems to be in luxury. Everybody's going in luxury. One of our members in Australia has a great new term. He calls it "lux jack" as a "lux" is a luxury. It's the luxury that's the top of the luxury that's. It's funny because when you think about it, we have a lot of straight-ations within the luxury sector. When you say ultra-high-knit worth, you're talking about people that are 30 million dollars in investable assets, whatever above and beyond, then you have high-knit worth, then you have the wealthy, and then you do have the aspirational. They all use some of them used. A lot of the aspirational people where we get the business and where I think a lot of advisors that truly aren't luxury advisors get a little bit of a pass is that they go to an advisor in general for a higher-end trip or more complex trip. A lot of the advisors that don't really specialize in luxury travel may think certain products for luxury, when in fact they're really what we call "mastige." They're just slightly fat. They're really more premium basis. Again, we all of our members serve. We have members that only work on retainers. We have members that work with only family offices. We have all kinds of all kinds of them. Also, what's fun is it's not only their wealth, but it's also generationally and and passion point driven. So, you know, We have, you know, we have members that are absolute rock stars and they're in their 80s and they're still going and it probably put you and I to shame and how much energy they have. And then we have, you know, brand new, you know, you know, Jen's ears and that are already in and doing quite well. So it's quite a variety. Yeah. And we've seen the psychology of luxury travelers shifts since the pandemic. Not only what luxury travelers are looking for, but even in something as basic as the way many are thinking about travel, it wasn't really until 2023 when COVID became a thing of the past and people adopted a different mindset. More business and leisure travel have intertwined, you know, you're seeing a pension for long, slow travel and a deeper desire for wellness travel. Who are today's luxury travelers and what do they want? Everything you said is absolutely true. I think the only nuance that I would give it a little twist is that everything you just talked about was there before the pandemic. And what I mean by that is that these were, these were actually growing trends. So there's a number of things around this, right? So every single one of those things, slow travel, multi-gen travel, skip trend travel, where grandparents, take the grandkids, you know, yes, one of the things that's probably was unique to the pandemic was the hybrid that the work for many where thing is probably one of the things that's probably the most specific to the acceleration of it. But even in that one, it was a trend that was already happening. And the way I see the pandemic is what it's the great accelerator. It's kind of like if you're a Mario Kart player, right? It's like that turbo charge when you hit it just right. And you just take off and pass everybody. But remember the fundamentals that made travel hit its high water mark in 2019, the fundamentals of the marketplace did not change. Meaning that there were a couple of, there were three major factors that were driving travel in general and luxury travel in specifically. Number one was the longevity revolution and the fact that we have never in the history of our planet ever had five generations and now six, six generations of people all traveling at the same time and the numbers are traveling. And why is that? The reason that is is because of the longevity revolution on one hand where, you know, I have a friend of mine, Dr. Ken Dijkwald has this incredible statistic that basically says that roughly two thirds, 66% of all human beings that have ever reached the age of 65 or older. And I don't mean in the last hundred years, 200 years, I mean all the way back to the beginning of mankind. Two thirds of all human beings that have ever reached the age of 65 or older are alive today. Now, we've had 65 year olds. We've just never had very many of them. Right. So you have the longevity revolution on one side, which of course travel is one of the key things and then you go to the other side, which is the younger generations where you had started to see the beginnings of particularly with a sharing economy and all these other things. You'd started seeing the prioritization of experiences over goods. Also accelerated by the fact that baseline quality of manufactured goods has grown, had really grown tremendously. I always use the example of a Hyundai 18 or 20 years ago and a Hyundai today. I mean, a Hyundai today is better than a Cadillac was 20 years ago. Right. And so as goods, as the quality, the baseline and durability of goods rose, then this whole desire for experiences and all this other stuff also take off. So you've got that, you've got generational, then you've got the rise of wealth, right, around the world. And then you had the fact that you had globalization, the rise of the rest. And those were three major factors that were already impacting travel. And then what you have is the pandemic was the largest, you know, first of all, the pandemic, this past pandemic, because it never happened even in pandemics before with the Spanish flu, whatever, was the first time in the history of the planet where every single border in the world was closed for some period of time, had never happened in the world history. So you had this psychological kind of, you know, this, this event that basically made people question, you know, the validity of their time and their, their humanity and all these kinds of stuff. And it really was, I mean, I call it the giant slingshot that made us, that made us do that. And you know, and travel had already been moving in this direction. You know, you go back to the great generation and the depression era, you know, travel was a luxury. And so that's why I call these accelerators because the idea that travel was really a God-given right, you know, part of your life, part of what makes you a human being, part of what's something that makes you interesting, something that deepens relationships and, and bonds, all of that had already been there. The travel industry has witnessed a significant shift in recent years with the rise of online travel agencies, the OTAs and, and digital booking platforms. Many predicted online booking platforms would render these travel professionals obsolete, but the opposite has happened. There has actually been a resurgence of the traditional travel agent or travel advisor and travel concierge services. It seems expertise is back and vogue. Why has the travel advisor industry experienced significant growth in recent years? It's interesting because I would go back to the fact that it's not just expertise, you know, because AI systems, to your point, I mean, AI systems are quite impressive, quite frankly, but so was being able to research all this stuff on the internet back when the internet first came out, right? So I think that what's happened is, first of all, the role of a travel advisor, a modern day travel advisor is very different than what we used to be known as a travel agent. And this is not something that's happened just in travel, right? Same thing was said about the online brokerage business, right? And a lot of other things. What happens a lot of times in these evolutions is that people start a certain thing, every industry in the world, the receptor in the world is polarizing between optimized commodity and optimized experiential. And so you're either Jeff Bezos or your Bernard Arnoh, right? You're an opposite end of the spectrum. And you know, being in the middle kind of in this muddled middle, right? Well, you're not really a commodity player, but you're not really a good experiential player. It doesn't work very well. I would always urge people to make sure that you're not in there. So the strength of experiential anything is in the fact that it's based on human connection and relationships and trust and just the fact that our inner chemistry is set up to be we're emotional, quite frankly, irrational beings. And so what's happened is is that the role of travel advisor has become, they're an influencer. They are a confidant. They're somebody that's fun to talk to. The modern age travel advisor should be delivering value in three different areas. What do you do before the trip? The whole thing, that's expertise and this and whatever. How you ask the right questions. I find it very interesting. Probably a decade ago, I literally said in the midst, you know, still in the midst of the normal online revolution, I said, you know, in a world where answers are a diamond. I mean, basically getting an answer is there's no cost to it, right? You can go online and find all kinds of answers. But really, what really stresses an intelligent person, traveler or whatever is that I ask the right question. That's what I'm always worried about. It's kind of funny because today when you think about the word or the concept of prompt engineer, what the hell is prompt engineer? It's basically asking a good question, right? And so the better you ask the question and the different ways you ask, you know, an AI system, a better question, you get different answers. And so I think what's happened is a great advisor today has a way in which they interact with a customer that is not only expertise driven, it's stylistic, it's energetic, it's personalities, right? That makes them feel good, whatever. And then how do you add value during the trip? It's travel. It's not if something's going to go wrong, but when something goes wrong, who's got your back, right? And what who, you know, I can go on find the guide.com, but that's not my guide. You know what I mean? In other words, I made it mad at him, I made it mad at him, whatever, but that's part of who we are and we're a reflection. One of the reasons that we at Virtue OSO led the way in the industry in literally getting our members to spend thousands of hours and money and treasure and whatever in networking, right? I mean, if you look at, you know, we started what is Virtue OSO travel, we could 1988. I mean, now there's, you know, I can't keep up with all the events, but we did it in order [BLANK_AUDIO] scale personal relationships. Why? Because if I know the GM of this hotel in Patagonia or this or this or this person, we're human beings. I call it, you can't take the human out of humanity. If you and I are friends, Scott, we've met and we've survived, you know, four days of a grueling virtuoso travel week, right? It's almost like a badge of honor. - Yeah. - When I send you a client, you're a human. You're just gonna treat him a little bit different. You're gonna say, "Hey, I don't want you. You get all blah, blah, blah." It's just gonna create a little magic there. And then the last thing that makes modern day travel advisor truly a trusted travel advisor and we actually have a lot of research around this is the fact that a really good advisor today and the data from the consumers will tell us, the actual travelers tell us. Because they tell us this, the single most powerful thing that differentiates a trusted travel advisor from a transactional travel agent is the quality and the style that fits my needs to understand what happened after the trip, right? The debrief, whatever, "Hey, Scott, if you could have changed anything from that trip, what would have been whatever?" Because then what it does is it creates a learning relationship, right? In other words, it's becomes a learning relationship where I learned better, what to do, what to do, how to do things, your trips get better, our relationship deepens. And that's so you've got to have this, you have this kind of holistic and there's a practical expertise driven and then there's an emotional bank account that you're building within that. - You know, I attended the Virtuoso Travel Week in Las Vegas for the first time this past summer. It was an amazing experience. For my listeners, the event brings together thousands of industry professionals from around the world for conferences, networking and deal-making. I believe it was the 36th anniversary this past summer of Virtuoso Travel Week. Many have called it the Fashion Week of Travel. What do you hope attendees get out of these conferences? - Well, the single most important thing has been the concept of scaling personal relationships, right? And, you know, we talk a lot about our greater purpose is enriching lives for human connection. So, you know, that's our greater purpose. We happen to use the Patrick Lentioni framework for the way we run the company and it asks you these critical questions and the first critical question is, what is your greater purpose? Like, not how do you make money? What do you do? But what, you know, if you were to disappear tomorrow with people even notice, right? - Right, right. - That's true. - And for us, it's enriching the lives of human connection. Well, when we say that, we don't mean it just for our customers. We mean it for ourselves. So, the quality, so we're just big believers in that the quality of the relationships that we do. So, that's the number one, the number one thing that we're trying to achieve there is a strengthening of building relationships. The second thing is, you know, is obviously knowledge. And it's, but it's not knowledge in that kind of just kind of robotic kind of AI way. It's kind of that, you know, there's that wonderful, who was it, T.S. Eliot or somebody, where, you know, where is the knowledge and information, but where is the wisdom in knowledge? So, we're actually moving, you know, we went from the information economy to the knowledge economy and we're now kind of going into the wisdom economy. And you know, you know, you don't gain wisdom just by sitting on a computer and reading stuff or whatever you want. You gain wisdom through the sharing of experiences and the relationships that you have, we have that. So, and then the other thing we're trying to accomplish there is we, you know, you know, if you were here last year, we had Simon Sinek back. - Right. - It was kind of, Simon's gonna become the unofficial Godfather of Ercho. So, because when he wrote the book Start With Why, you know, he reminds us that people commoditize the what, but they buy the why, you do something. And so it's also a gigantic global exercise in a shared why. - You know, when you spoke at the opening session of the event and you highlighted three strategic areas of your business, network, innovation and technology data that will drive growth for VirtuaO. So, could you elaborate on your overarching strategy and vision? - Yeah. First of all, it's kind of funny because I've always loved technology. You know, and, but I think what's really interesting is, and maybe let me address the technology piece first because a couple of years ago, I had this epiphany and it was like, why did tech companies, like real tech companies, right? Not people that use tech, but real tech companies. Why did tech companies always talk in terms of domination, right? We're gonna dominate whatever. And it occurred to me that there's actually, besides all the obvious things, there's also one other, like almost maybe hidden obvious thing, because it's actually possible. It's actually possible to be 80% of search, you know, or 90% of all the AI chips or whatever the heck it is. It's actually possible in the technology world. But in the human centric human dependent world, that's almost impossible. Because what I feel about that is that in the human centric and human dependent world, where the human is not seen as a cost to remove or put it in tech terms, where the human is the feature set, right? They are the user experience. Well, in a human centric human dependent world, the best strategy is collaboration. And so that's kind of, so what really, what worked, our vision on the use of technology is how do we build an ecosystem? Because I don't believe, you know, Virtuoso will never be the uber of travel advisors, meaning that a single way of a single user interface on how to do workflows and how to do something will never be the mark of success for us, because then we are commoditizing the creativity of those work processes, right? So one of the reasons that our members are so successful is because of the diversity of the way in which they, they handle their business, right? You know, somebody may say, oh my God, can you believe that, that shoemaker on the Pontovecchio is still sitting there cobbling shoes? Well, you may scoff at it, but it's also the reason why people pay them $3,000 for a pair of shoes, you know? It's the artistry of it, whatever. So for me, on the technology side, we really are focuses to become technology and the neighbors. I'm blown away by the utilization of different technologies. I remember the early days of the internet, but also that all the tech people are always talking about how they're, this is gonna displace travel agents, this is gonna displace travel agents, and when we get this done, it's blah, blah, blah. But for example, to just give an example in history, something that became so ubiquitous, so quickly, turn out to be the greatest technological accelerator of our profession. And that was mobility, right? 2007 was a huge year, because that was a year the iPhone wasn't-- - That was a launch, yeah. - Right? That was a year the iPhone was launched, and now we have computers in our pockets, and also accelerating mobility, and the birth of not Facebook, but Facebook on a mobile device, which is when it really took off. So mobility, the ability to work from anywhere, and social media became these two huge ubiquitous technologies that unchained the travel advisor from the desk, and actually created probably one of the first and original, digital, no bad professions in the world. Right? And the quality of people who became travel advisors when that happened just went through the roof. Next thing you know, I've got lawyers quitting their law practices, and all kinds of professionals and stuff, because those technologies help that whole thing. And when it comes to our network, the way our network works, the way we see the future is, Virtuoso has always kind of worked through this kind of network effect, where it's like, you know, Scott, you're the guy that everybody knows in Europe, because you're the guy that's the super high-end European hotel booker, and I'm the person that knows, you know, that every expedition cruise company knows, because I do all this business. And the way that our network is always worked, even all the way back to the beginning, is that it's a little bit of borrowing our street cred. It's like, "Oh, you're all Virtuoso." "Oh, well, you know, and so we borrow each other street cred, we borrow each other's knowledge, we share knowledge back and forth." And I think one of the things that really differentiates Virtuoso, and we've had members that have been in our network grew really large, and really didn't believe in this whole idea about sharing whatever and became over, you know, instead of collaborative, overly competitive, and sometimes they've got to move on. And that's fine, but who we are as an organization are for those, those organizations large and small that believe in the collective ability for us to do something. together. And so for now, what's happened is we're now starting to develop the ability to to take different areas of market opportunities, adventure travel. I mean, I mean, we did that all the way back in the in the mid 1990s. We saw that soft adventure was something that was that was building. And we had a bunch of advisors that really wanted to grow that area. But most of the top soft adventure companies did not deal with travel agencies. So Butterfield and Robinson, backroads, all these guys, they had a little bit of travel agency business, but they were mostly seen by the traditional travel agency community as anti-travel agent. Well, I used to tell them they're not anti-travel agent. If they would have relied on travel agents to sell their products, they would have gone out of business because they're each specific players. And I said, I don't care whether somebody has direct business. I care whether they're willing to be a good omnichannel partner, right? And as long as they're good at omnichannel, so we went out as a network and literally brought in a bunch of the world's top soft adventure companies and became great partners and grew their business tremendously because they were able to easily get to the enthusiast, right? The enthusiast, the enthusiast, whatever. We were able to bring them the person that was the more eclectic. When you're they go on a cruise, they take a bike trip, they do all this, whatever. And it was a great example. So what we see around the world is our ability to create, you know, to take the naturally occurring communities of our members and our advisors that, you know, that are really good at any particular thing and create enough critical mass so that it is able to create an advantage for those advisors that are specializing. But it also gives you an advantage, even if you're not specializing because you've got your brethren over here that are creating a real advantage and a real set of relationships and benefits and whatever. So when I need to do an a soft adventure something, and that's not my specialty, virtue also as a network can do that for me. So I want to talk about technology a little bit more, you know, the continual advancements in artificial intelligence are fundamentally reinventing the travel industry. They're already generative AI tools out there to answer users questions about destinations and properties, some are even creating itineraries. One day soon in the artificial intelligence-powered future, vacation may start by telling your smart phone something like this. You know, I want to take a multi-day guided tour exploring the country roads of Southern Italy in May. I want to indulge in the finest foods and views in Roman Cerento, hit the gardens of Augustus with a local expert, and then I'd like a 7 PM dinner reservation near the hotel at a restaurant with vegan options and a great wine list, and your phone's going to spit out the perfect itinerary. Do you see AI as a threat to your business? I love that because, first of all, everything you just said, everything you just said, could be the most amazing travel advisors own AI partner and assistant, right? And so I actually think what you're going to find is it's going to be a very interesting world going forward. Am I going to ask that of the greater LLM in this guy? Or am I going to ask that of a small language model based on the personalities and the this and the that of my advisor or a network or a particular whatever? It's going to be interesting to see where this goes. I already have, you know, what you just said is exactly what's happening, and it is impressive. Like I'm doing in my talk next week, I'm talking about one of the ads I'm showing is the new Pixel 9, the Google Pixel 9 ad, right? Where the TV ads are all about where now they're not just they're sitting there having a conversation. They're laying down on a pillow and they've got their phone next to us. You know, hey Gemini, you know, can I interrupt you? Of course you can and da da da da da da da da da da da da, but I'll tell you this right now, right now, we are social animals. And at some point, we're also adaptive animals. And it's going to be interesting how I just I love interviews because it makes me think about how could I say it differently? I really wonder about the future and about what makes us human and what makes us what moves us emotionally, et cetera. And I'm literally sitting here, you know, when somebody loses a key capability like sight, right? You know how they say that all their other senses become more developed? Yes. Yep. I wonder if that's what the future of humanity is going to be with AI because I mean, at the same time that this is happening, one of the articles that I'm referring to in my talk next week is first of all for your audience. If you don't subscribe to No Mercy No Malice by Scott Galway, I don't agree with, but I don't agree with everything Scott does. And I wish to hand some of my meta-stop back when he was pissed off I don't particularly like Zuckerberg and some of the things that social media is doing and I think there's some issues around that, but I won't get on that self-bugs, but he has a great episode. There's a great one of the newsletters that came out here recently was people are the new brands. And it basically talks about why is it that Joe Rogan, politics aside, whatever there's got nothing to do with that. Why the hell does Joe Rogan have an audience that's greater than all three networks put together? Right. Right. And why the hell do people know them and why do whatever? And he talks about the fact that, and this is the sadder part, in that same article, we basically Americans, I don't have the stats outside the US, but Americans are spending 70% less time with friends than they were a decade ago. And so what's happening is they've done the studies where, you know, all these influencers, you know, Mr. Beast and this, blah, blah, blah, blah, they call it parasocial relationships. So these parasocial relationships that are online with these people that let you into every little whatever basically lights up the same area of your brain that lights up when you're with a friend. But where is, but where are we going to go with this? Where is a, where's an authentic relationship? Where's empathy? You know, it's fine for, you know, Gemini to say, of course, you can interrupt me Matthew. But where's our bullshit meter? It's, you know, it's human beings, right? And the more that, and the more that gets real, I mean, I just had somebody tell me yesterday, it's absolutely incredible. They, they're, they were talking about, I think it's called Delphi, right? This new AI thing, Avatar. Yes. Right? Well, it's a little creepy when you're sitting there talking to the Avatar. And then this friend of mine says, and then the Avatar says, Oh, Matthew, can you tell me about that picture behind your desk? Oh, yeah, I don't, you know, it's, it's going to be an interesting thing. It's the movie she, it's the movie sequel. And it's a life. But you know what's going to be interesting for now. Let's bring it back to the more practical. So here's, here's the more practical. I had one of our members in Mexico City who literally just said this. He goes, I have one of my best clients. She's all enamored with AI, whatever. So she went in and said, I want to go to Poolyah. Tell me the best things to do. blah, blah, blah, blah, blah, and all this kind of stuff. And she came to me and goes, look, look, now, what do you think? Great. This is whatever, this is whatever. Hey, but you know, here's the other piece. Brunei Brown, who also spoke to us, whatever, and said a little deviation here, because I think it's important in the story. The single most important way that human beings build trust with each other is showing vulnerability, vulnerability, right? The fact that to show your humanity, to know whatever. And it's very interesting because I've been telling advisors for years, don't just tell people you're an expert. You tell people you're an expert in today's world. It's just like put a bit of bullseye. It's a sport. Let me, let me see how you know, whatever. Tell me you're also a great collaborator and tell them you don't know. Of course, I don't know everything. But by Goli, I got your back would do this, bring me whatever you know, and I wouldn't, you know, whatever. So he takes this I turn around and he goes, wow, that's interesting. I didn't know about that. He didn't send that up for a chance that you know everything that AI'd come up with. But then he goes, but you know what, here's, here's some things that I would change. And by the way, I can't believe that it doesn't have this place. Well, it's over in, I think it was in Miterra. But because she asked what are the best places to do in Poulia, the AI system took it literally and this place, which is like, you know, five minutes away from this other place, but it's, it is officially in another, another province. It wasn't in Poulia, right? So it's going to be interesting to see how, because I think what you're going to see is that biotrists become critical, much more easily adept at using the AI themselves. And today, you know, this whole back to this whole thing about prompt engineering, well, did you ask it this question or what about that question? Well, let's ask this question. And then there'll be the human layer, right? One of the things that there's going to be a scarcity of in, in, in, in the road now, let me go back to really long term. You know, humanity, we've hit peak childhood. I think it was called in the article, peak childhood year. I think it was either, it's either this year, it was this year or next year. And after that, it looks like population is going to decline. What's gonna happen in the world down the road where then the scarcity, so it's gonna also be the value of the relationships. Yes, they can tell you this, whatever, but you don't have mine. And we're already seeing that, right? We're already seeing some of our relationship driven people and organizations where they are hiring, where somebody was a freelance guide for somebody, you know, for a bunch of years. But they ended up deciding to stay with this particular virtuoso onsite because all in all, that particular virtuoso partner gives them a greater experience of community, of being part of something larger of this, of that, whatever. And they would rather give their exclusivity to that particular partner, right? Then to just be open to the open public. So I have another saying, Scott, I call, and that I've been saying, I honestly don't even remember, it's been, I know it's at least more than 15 years ago, but probably one of my most repeated sayings that I called many, many, many years ago was, automate the predictable so that you can humanize the exceptional. Well, last year, what I said was, folks, the mother of all automate the predictable is upon us, and it's called AI. But this year, what I want to really dive into is, what does it mean? How do we go deeper into humanize the exceptional? What does that actually mean? And it reminds me of back in the early 2000s, when we started calling our advisors advisors, nearly 20 years before anybody else asked or anybody else called it, they were still calling, everybody was calling it. But we challenged ourselves. We had an innovation team of agency owners that volunteered to put together the stigma, and we called it the agent to advisor leadership group. And basically, the readman of that innovation team was, okay, other than the fact that we're calling them advisors now, what the hell does it really mean to be an advisor? How do we as agencies and businesses need to change the way in which we interact, train them, support them, do whatever? What does it really mean to be an advisor and how do we really scale that, right? And I think we're gonna be asking ourselves, that's something that I wanna utilize the Virtua. So network is, first of all, I think the answer's gonna be, you gotta be yourself, right? And be more confident yourself. But what are the fundamental things? How do you do that? How do you augment that? And so what, for me, 2025 is the year of, how do we go deeper into what does it really mean to humanize exceptional? - I mean, I don't have to tell you luxury hospitality is in the middle of a boom. And in an effort to target well-heeled travelers, it's becoming very apparent that ultra-luxury hotel players, many of them are in Virtua, also as network, are focusing their attention to our providing top service and more personalized immersive experiences. They wanna state hotels that deliver beyond already high standards. For many luxury guests, these intangibles of spirit are what they're paying for, not the opulence and the glitz. Do you think that's what defines true luxury hospitality today? - I do with one caveat, that design, location, so design, the way in which something's designed, not only for visual, I mean, I have a huge respect for design, right? And design is not just, you know, not just a designer dress, but a rates it's, and in fact, it brings me to one of my favorite things I'm starting to talk about again, because when we rebranded, we called ourselves specialists in the art of travel, right? So I could know a really wonderful artist, and they're really gregarious and fun to be with, but maybe they're shitty artists, right? - Right, right. - Or at least their artwork, I mean, like, I'm still, I still don't understand the banana with duct tape on a canvas, that's a whole other, that's for a whole other podcast. But the flip side of this is the whole idea of the design, is, you know, just, it's, and the idea, and I love this definite, I love, in the world of AI, I love this definition of an artist, 'cause we rebranded ourselves as Verchosa, we said, "Specialists in the art of travel." And what do I mean by that? And I love the definition that I remember knowing about it years ago, but it's just kind of, I've reconnected with it, and I love this definition of an artist. Somebody who produces something you didn't even know you wanted. Right, it's like, what does an artist do? They create something that, I don't know why I wanted, but I wanted, right? - Right, well, Steve Jobs do that when he launched the iPhone. - Right, right, so it's like, it's whatever. So, but I will tell you this, so obviously design, quality, locations. I mean, those things are still there, they're still important, but I will, I do feel that the reason that that's so important is that, how did you make me feel? I've been talking for a couple of years now, that another way of calling, of calling luxury luxury is to rebrand it as, how did you make me feel business? And I don't care whether you're, I did, I think the first time I started using that is I did a presentation, the Walpole, which is the British luxury organization. - Yeah. - And it was really around the idea of like, how did you make me feel? Which is why storytelling, origin stories, I always talking about, isn't it funny how when you get to know the winemaker, the wine taste better? Or things like that. Again, it brings us back to this whole idea of us being, you know, emotional, social, irrational beings. And so I think the critical piece, and I've actually said this to the hospitality industry, I think what's gonna be really critical around this is that they say they do all these things, but the most important thing is gonna be culture. - Right. - I think that those organizations, those hospitality organizations that truly make their team members feel like they are enriching themselves that they are in a culture of purpose and scene and this, whatever that's gonna be, they're the ones that are gonna take the lot and share the success. - So Matthew, my final question is the luxury item question, which I ask all my guests. So if he was stranded on a deserted island, and you can only have one single luxury item with you on that island, what would that luxury item be? It can't be any form of air or water transportation to take you off that island or anything that requires mobile service so you can call somebody in the virtual also network to pick you up and get you off that island. It's just you on this lonely island may be represented by virtual so who knows, what would that one single luxury item you would like to have with you? - Other human to talk to. That's not Wilson. - That's a good answer. - I mean, it was like, no, that shit would matter to me. I would go back crazy if I didn't have somebody to talk to. Now that poor person, I wanna leave the island after a few days. - Matthew up church, chief executive officer of VirtuaO. So thank you so much for joining me on the luxury item. - Thank you so much Scott. (upbeat music) - That's it for this episode of the luxury item podcast. Thank you so much for listening. If you found this useful and entertaining, I would be really grateful if you can share it with a friend or colleague. I would love it if you subscribe so you never miss an episode. And while you're there, be sure to rate and review us on Apple podcasts. It really helps other listeners find us. The luxury item podcast is a production of Silver Tone Consulting. I'm your host Scott Kerr. Until next time. (upbeat music)