Spire to take on Gilt Groupe's Jetsetter

SAN FRANCISCO Tue Jun 21, 2011 9:21am EDT

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SAN FRANCISCO (Reuters) - Gilt Groupe's Jetsetter luxury travel flash-sales business will have a new competitor called Spire starting this week.

Spire is being launched by Perfect Escapes Inc, an online luxury-travel company backed by venture capital firms Trident Capital, Saints Capital, Wand Capital Partners and Big Bang Ventures.

The new effort is headed by Perfect Escapes Chief Executive Alan Josephs, a veteran of the online travel world who previously worked at Ebookers, Orbitz Worldwide Inc and Travelocity.

"The game is on," Josephs said in an interview with Reuters. "There are other competitors, but we feel we are going to be the most consumer-friendly travel flash-sales site."

Flash-sales websites offer steeply discounted products and services for a limited time. The model has caught on quickly in the retail industry - especially the luxury apparel sector where Gilt Groupe currently leads.

In 2009, Gilt expanded the model to luxury travel and hired Drew Patterson from online travel discount firm Kayak to run Jetsetter.

Spire is planning to tap the existing membership of Perfect Escapes, which has more than half a million subscribers to its luxury hotel email newsletter The Perfect 10.

Spire will also access more than 125,000 members of Travel Intelligence, the UK and European arm of Perfect Escapes.

These customers have an average household income of $200,000 and go on more than five trips a year.

"Hotels have been excited to work with us," Josephs said. "We have an established base of affluent customers who love to travel."

Through Spire.com, the company plans to run flash sales that will offer luxury hotel discounts of at least 30 percent to members. The 30 percent discount applies to deals at other flash-sales sites too, Josephs noted.

There's a guarantee in which customers get $100 in credit for future bookings if Spire deals don't meet the target of at least a 30 percent discount.

So if a customer buys a Spire deal for $1,000 and then finds the same hotel on another site for $1,200, they will still get the $100 credit, Josephs explained.

"I've worked in the online travel business almost all my life and have lots of experience with guarantees," Josephs said. "The most important thing is to stand by your guarantee."

Spire will also allow cancellations, giving customers refunds for up to 72 hours after a trip is booked, minus a $29 fee.

"Not to criticize any specific competitors, but we're the only one who will offer customers the ability to cancel," Josephs said.

(Reporting by Alistair Barr, editing by Dave Zimmerman)

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