Last updated: 05:44 PM ET, Fri March 13 2015

Travel Insights: Behind Virtuoso's New Incubator Program

Host Agency & Consortia | Virtuoso | James Shillinglaw | March 13, 2015

Travel Insights: Behind Virtuoso's New Incubator Program

Late last month I wrote a story about Virtuoso's new travel technology incubator program. The idea behind this new scheme was to spur innovation by travel tech firms interested in providing new tools for the travel agent market, specifically those that Virtuoso, the luxury travel agency network, could use for its members.

On its face, it seems like a great idea. The Virtuoso Incubator program allows budding travel tech firms to interact with top agents and even become preferred suppliers to one of the top luxury travel agency groups in the world. But a good travel agent friend of mine, who incidentally is a member of a competing organization, wrote me wondering why we played up this story so much (and it was one of the most well-read stories that week). Ordinarily I would take such comments from a member of a competing group with a grain of salt, but this agent also has a background in technology development and innovation even before he became a travel agent. He knows his stuff!

His point was that a true technology incubator should also provide a financial investment in the companies that it includes in its program, which I pointed out in my story was not the case with Virtuoso Incubator. He also said what Virtuoso is doing is already being done by other agency groups today. I tend to agree that this is very much a different kind of program, but I'm not so ready to say what Virtuoso is doing isn't a good thing for itself and the travel agent community at large.

Virtuoso's idea is to allow outside companies to develop applications that can best serve the needs of Virtuoso travel advisors. It's also a move to outsource technology development beyond Virtuoso itself. Virtuoso has a long history of innovation in technology, but it also has not always been as successful in that area as it perhaps wanted to be. Some of its internal technology projects have taken a long time to develop and have been quite costly. So this move seems a way to mitigate costs, if nothing else. Indeed, other agency groups, and I'm thinking of Signature Travel Network here, have long been recognized for their successful innovation on the technology front.

On the other hand, Virtuoso Incubator could also be a way to spur outside companies to invest in new technology development designed for the travel agent community at large. Current of former Virtuoso agents or agencies have developed many of the candidates for the Virtuoso program (most are focused on developing itinerary management solutions). The carrot for these fledgling companies is that they potentially can become preferred suppliers to the Virtuoso network. They also get access to some very high-end travel advisors who can give them feedback on their products.

So no, Virtuoso Incubator is not a source of financing, unless the companies get money from individual Virtuoso agencies themselves. Virtuoso CEO Matthew Upchurch has also been known to invest in technology companies. Nevertheless, I believe Virtuoso's program can help attract technology start-ups to the travel agency space on put renewed focus on travel agents as a potentially lucrative market for innovative companies.

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