PHOTO: Sam's Club Travel will offer online booking, in-store booking and telephone booking. (photo courtesy Sam's Club Travel)
Sam's Club Travel, the new travel package brand for the wholesale club of Walmart Corp., will be available to the 50 million members of Sam's Club. Behind the face of the brand is a 20-year old business-to-business travel giant called Tourico.
An Altamonte, Fla.-based wholesaler, Tourico claims to be able to provide access to 4,500 worldwide destinations, 90,000 hotels, more than 6,000 attractions in 800 cities, 150 airlines, 18 car rental brands and 13 cruise lines.
Tourico was established in 1994 as an inbound tour operator and was one of the early developers and adopters of Internet booking technology, which powered the company's rapid growth.
In 2001, the company began offering private label websites to companies that wanted to put their own brand on Tourico's portfolio of air and ground travel components. In 2003 Tourico introduced a "dynamic packaging" technology that allowed online booking of separate components allowing consumers to create their own packages from scratch. At the time most companies could only offer online booking of pre-formed packages.
Dynamic packaging was a highly advanced technology at the time and powered a new wave of growth as it began to open product development offices in international destinations such as Sao Paolo, Buenos Aires, Sydney, Europe, North Africa and the Middle East.
Today it is a $1 billion dollar company with 29 offices on five continents and more than 500 employees. The company claims a 42 percent growth year-over-year growth rate in 2014, its 20th anniversary year.
Walmart Enters the Travel Industry
The Sam's Club Travel product can be booked online or in any of the company's 600 store locations. Initially the in-store presence is mainly just to create awareness of the product, but customers can book packages in the store with the guidance of in-store personnel who can walk customers through the booking process using an interface such as an iPad.
The company also has a call center for handling more complex bookings or for people who just prefer to book over the phone. It will be available 24/7.
Isar Meitis, the managing director of ecommerce for Tourico Holidays, told Travel Pulse the target market is expected to "primarily be interested in travel in the U.S., Mexico, the Caribbean and a little bit of Western Europe, but if somebody is booking a business trip to Bangkok or Argentina, they would still be able to book it."
The company says it can provide travel anywhere in the world, including hotels, air tickets, car rentals, activities and cruises. It hopes to add escorted tours later.
The demographic of the Sam's Club's 50-million members starts at 18 years of age with few in the older senior's segment. According to Meitis, between 20 and 25 percent of U.S. households are Sam's Club members.
Prices are expected to be discounted up to 50 percent off hotel rooms, 15 percent off rental cars, 10 percent off cruises and 25 percent off attractions and activities as compared to average market prices. However, according to Meitis, price is not the only attraction.
"It's not always about price," said Meitis. "It's about price and other kinds of values. In many cases it is upgrades in car rentals. The cruise industry is a value-add industry. It may be that there will be more things offered to a Sam's Club member than a non-Sam's Club member. With hotels, it will be price and some perks, anything from free breakfasts to free parking to free Wi-Fi, and especially to Sam's Club Plus members."
Sam's Club has three tiers of membership and the top level, Sam's Club Plus, will be offered the greatest values.
The Sam's Club Travel offerings are more comprehensive than competitors such as BJ's Wholesale Club and Costco, said Meitis.
"BJ's and Costco offer cruises or pre-defined packages," said Meitis. "If you don't want to go to Cancun for four nights between those dates or don't want to go to London for five days between these dates, it's really not for you. With Sam's Club Travel you can book anything you want. It's a lot more complete, offering with a lot more flexibility from the member perspective."
On the other side of the competitive landscape, the major online travel agencies, Meitis said, Sam's Club will beat them in price.
The OTAs, he said, provide "everything under the sun, but it's all the same thing. There's no price advantage. You'll see the same rates across the board. There is nothing out there that provides both the value and the bandwidth or availability of so many different things in one place that Sam's Club Travel Offers."
The selection also covers the entire range from economy to luxury, said Meitis, "from a Motel 6 to a Marriott Marquis."
Is there any place for travel agents to become involved in the distribution?
"Not that I can think of," said Meitis.
Walmart is one of the world's largest and most profitable corporations. With 4,000 stores in the U.S. it dominates the U.S. retail market by a large margin. In 2011, when Walmart showed a revenue of $454 billion, its closest retail competitor was Kroger with a revenue of $85.5 billion. In fiscal 2014 the company reported a revenue of $476.3 billion.
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