Suite Deals Members Only

A new breed of travel websites offers exclusive discounts on high- end hotels. But can these ambitious companies survive an improving economy?

WANT TO STAY at the trendy Gansevoort Miami Beach for $200 less than the regular rate? Or book a lavish junior suite at the Hotel Teatro in Denver at 65% off the standard list price? No problem—as long as you’re a member of the Jetsetter club.

Over the past year, the idea of exclusivity has spread from hip restaurants and posh nightclubs to invitation-only travel websites hosting private sales on accommodations. And while Expedia, Travelocity and Hotwire have been publishing discounted travel deals to the general public for years, the growing field of members-only sites focuses specifically on coveted, brag-worthy destinations.

“Many of the travel websites out there just list a huge range of generic choices with a few words of text about each one and their price points,” says Jetsetter founder and CEO Drew Patterson. “We list a smaller number of hotels because we want to curate great experiences and inspire travel to places that are truly luxurious, distinctive and memorable.”

Jetsetter, a spin-off of the invitation- only designer retail site Gilt Groupe, features 10 to 15 sales per week on high-end hotels and resorts, exotic villas and international cruises at prices unavailable to the general public. “Jetsetter members visit our site to learn about new destinations and resorts, much in the same way that people ask their friends or read a travel magazine for vacation ideas,” Patterson says.

There’s also Tablet Hotels, which offers hugely reduced rates for fashionable properties in locations all over the world. And those who join Vacationist, a new venture from Travel + Leisure and travel site Luxury Link, can save 25% to 40% on chic getaways. Once people become members of these sites, they receive emails that alert them of upcoming sales.

To make sure the sites offer only the most luxurious accommodations, properties must go through an intense vetting process before being cleared. Jetsetter, for example, only features hotels that have been hand-selected by a team of two dozen globe-trotting correspon- dents, mostly travel writers with long backgrounds in the industry. “There’s no substitute for human judgment,” Pat- terson says, “and we only talk about trips that are exciting and of the moment.” Recent Jetsetter listings include the Sir Francis Drake Hotel in San Francisco and The Atlantic Hotel in Ft. Lauderdale, FL.

Like Jetsetter, Tablet Hotels works with travel experts from the business, hospital- ity, design and even culinary worlds to anonymously scout properties, subjecting them to a rigorous review process before they are listed on the site. “We don’t use the star rating system,” says Julie Waters, the marketing manager for Tablet Hotels. “What makes a hotel great can really vary from property to property, so we look for personality and attention to detail.”

Consumers get a say, too. Anyone who books through Tablet Hotels can rate his or her stay on the real-time Tablet Hotels Meter, and if a hotel’s rating falls below 15 points (out of a possible 20), it is automati- cally removed from the site. Vacationist chooses its mixture of urban and exotic properties based on data collected from members and their buying patterns.

So what does it take to become a member? Despite their exclusive image, the sites are easier to join than you might think. Gilt members are automatically Jetsetter members; others have to be invited by a friend. Vacationist members are either existing Luxury Link members or Travel + Leisure subscribers, or they are asked to join; others may request membership online. Getting past the virtual velvet rope is even easier with Tablet Hotels. In addi- tion to its regular, open-to-everyone site, the company recently made the private sales more public—allowing anyone to access them as long as they create an account. Other points of entry include receiving an invitation from a member or ponying up $195 for a Plus-Level member- ship, which includes early access to private sales and other perks like complimentary room upgrades, spa vouchers and special rates and packages.

In addition to creating an air of exclusivity, private sales generate a sense of urgency and spontaneity by presenting nonrefundable deals for a limited time. Vacationist’s sales last three to seven days or until trips are sold out (booking is first-come, first-served), and Tablet Hotels’ weekly sales are live Tuesday through Thursday. Jetsetter getaways are offered for five to seven days, but members get some leeway with the “hold” feature, which allows them to pay 10% of a room’s cost and hold it for 72 hours after the sale ends. They can then pay the remaining balance or use the deposit toward a future booking. There are some last-minute getaways on all of the sites, but the travel window can be as long as six months to a year.

Despite the strict booking policies, membership numbers are growing: Tablet Hotels has about 500,000 registered users, Jetsetter has almost 400,000, and Vacation- ist has attracted nearly 100,000 in the three months following its debut last April. New people are signing up every day—and the sites are closely watching this rapid growth. To paraphrase Groucho Marx, who wants to belong to a club that’ll let anyone in?

“We are conscious of the balance required to maintain exclusivity, so growth is controlled by only making memberships available to those who have been invited,” says Diane McDavitt, Luxury Link president and a 20-year luxury travel industry veteran.

And as Patterson puts it, “We don’t want mass-market appeal and aren’t trying to be all things to all people—there are plenty of those sites already. There is tremendous growth potential in our core audience of mass affluent.”

THE BOOMING SUCCESS of members- only travel websites can be traced back to the global financial crisis. The recession hit the luxury sector harder than any other: In 2009, occupancy rates at luxury accommo- dations went down 8.8% and average daily room rates decreased by 16.3%, according to the June-August 2010 Hotel Horizons report by Smith Travel Research and Col- liers PKF Hospitality Research. And during the first half of 2010, average daily room rates went down 2%, according to STR.

“One thing that really impacted the luxury hotel segment’s fall was the surge in supply,” says Robert Mandelbaum, director of research information services for Colliers PKF Hospitality Research. “There was a huge 8.9% increase in supply in 2009, while companies affected by the economy… began shying away from luxury travel.”