Forbes: Meet The Biggest Travel Company You’ve Never Heard Of
Read the full article on Forbes.com written by Doug Gollan
When we think of the big players in the travel industry, the first names we go to are probably the likes of Marriott or Hilton, American or United Airlines, or perhaps Hertz and Avis. Behind the scenes, we can probably envision CFOs getting ready for quarterly earnings calls, outside consultants advising on how to improve corporate efficiency, and teams of marketers engaging advertising agencies and research companies to stay on top of the latest trends. Their feedback leads to collaborations with designers du jour and celebrity chefs who match the psychographic profile of the target customers.
Here’s another story.
Every year in January, the mother of the CEO starts working on holiday gifts for the next year. She begins with her list of every present that was given from previous holidays. Some go back several decades reflecting longstanding employees. Fortunately, perhaps, her involvement is limited to the hotel group and river cruises, so her list includes only 4,000 of the over 10,000 people the group’s 30 companies employ.
With a history that can be traced to a small hotel outside Cape Town in South Africa from the early 1900s, its fourth generation is now onboard, and the company operates on all seven continents, with over 40 offices. It serves over two million customers per year. It generates annual revenues of about $2 billion, says its chief executive Brett Tollman, with about half from its tour operator business, and the rest split between its river cruises and luxury hotel portfolio.
The fact that you may never have heard of The Travel Corporation doesn’t particularly bother Tollman, who is one of nine family members deeply active in the business. Even its Red Carnation hotels may be better known by their individual names such as Ashford Castle in Ireland (below), Hotel D’Angleterre in Geneva, The Chesterfield in Palm Beach, The Twelve Apostles in Cape Town, Bushmans Kloof in South Africa’s Cederberg Mountains, and its six hotels in London, including The Milestone and 41 Hotel.
Its tour brands such as Trafalgar, Insight Vacations, African Travel, Brendan Vacations, and Luxury Gold, its newest, may not be particularly well known to the general public, as most sales come via travel agents. As Tollman tells it, his preference is to focus money on supporting the trade and putting it back into the product instead of consumer marketing.
One area TTC has been particularly aggressive is giving back. Tollman says much the philanthropic focus is to make sure money goes back into the communities where it takes guests, from rural India to Africa and Latin America. A new initiative with Toronto-based social enterprise ME to WE (pictured below) enables customers to engage in “purposeful” travel. That group donates 50 percent of profits to projects such as building schools (over 100 have been built), making sure clean water projects are sustainable (40 percent fail in the first three years because there is not after support), with the other 50 percent going to social enterprise. In fact, while TTC tour brands will promote the ME to WE programs to their customers, it doesn’t receive any revenue or profits, and while one can combine TTC tours with ME to WE programs, they can also take them separately. “It’s completely altruistic,” says Tollman, noting that the dark side of the travel industry is the perception and sometimes reality that little of the money spent by vacationers stays in the places they visit.
TTC also funds The TreadRight Foundation through company revenues. In eight years its 40 projects have impacted over 30 countries, including protecting over 130 bush art paintings in South Africa, conservation of reefs in the Caribbean, stopping elephant abuse in India, providing clean water in Cambodia, and connecting rural artisans in Greece to global markets, creating sustainable employment.
The do good approach is one of TTC’s core beliefs and is on display even when the CEO is not around. During a trade show media meet-and-greet in Las Vegas in August while cruise lines, hotel groups, other tour companies and travel suppliers used their time to talk about new ships and upcoming hotel openings, the president of TTC’s African Travel brand used his five minutes to spread the word on how tourists could help in the fight against poachers by engaging in safe social media.
While Tollman says TTC is debt free, he isn’t against looking at acquisitions. He points out that the company’s growth beyond its hotel roots began in the 1940s when his father acquired tour operator Trafalgar. Earlier this year the company decided that it will expand its hotel footprint with management contracts, not just the current ownership model. Last decade it jumped into the fast growing river cruise market, buying Uniworld, a mid-market entry, and in the past five years it has repositioned it into the luxury segment, rebranding it Uniworld Boutique River Cruise Collection.
It may not surprise you that staterooms and public areas aren’t designed by trendy designers. That task falls to Brett’s mother Bea of the aforementioned holiday gifts and his sister Toni. It then may not surprise you that like rooms in its hotels, no two cabins are the same, the pair making each stateroom a “piece unique.” To further define its offering, the company borrows heavily from its hotels, particularly when it comes to culinary. While competitors’ fleets are often similar in style, the Uniworld vessels, says the CEO are each unique in interior design, meant to represent the regions they are cruising, much like its hotels are closely aligned to the local aesthetic. Its newest ship, Joie De Vivre, coming in 2017, will cruise the Seine and there will be an outdoor, rooftop dance floor and movie cinema.
One of the travel industry’s largest privately held companies, the TTC story is not just blue skies and clear sailing. Tollman points out that terrorism attacks in Europe have pushed down demand. He sees travel agents as a key conduit to calm the nerves of antsy consumers who are put off by scare headlines. “There’s no reason not to go to France right now. The lines are short, the value has never been stronger,” he says. And while Uniworld only brings on one new ship every two years, the market is now suffering from oversupply, and then of course, what is the future of escorted motor coach tours? Will newer generations really want to explore destinations on an, “If its Tuesday, it must be Belgium basis?”
Tollman says, from 2001 through 2010, volume on its escorted programs fell by 50 percent with many customers moving to ocean and river cruises, however, he believes there are now growth opportunities. He says the focus is now adapting the traditional approach of being in the lobby by the crack of dawn to later starts in the morning, more free time, and private access that travelers who don’t have a millionaire’s budget would not normally be able to arrange. He points to after hour museum visits, avoiding the crowds, visiting a family farm in Sorrento, then joining the owners to help cook dinner in the kitchen, while enjoying views of the Bay of Naples. Because of TTC’s buying power, consumers also save money.
Tollman thinks the idea of traveling with a group adds to the immersive experience customers today want more and more. He says for consumers who really want to learn about the places they are seeing, having an expert local guide with you 24 hours a day provides insights and insider views independent travelers miss out on unless they can afford the expense of private cars and such. Even at the higher end, Tollman believes there is room for the bus. Luxury Gold by Insight Vacations is described as “the art of touring in style.” All meals are at Michelin and notable restaurants with offerings from Europe to Asia.
The website Reluctant Entertainer traveled on an Italy itinerary and the writer pointed to features such as before opening access to the Vatican Museum. In addition to top restaurants, they group stayed in hotels “with marble bathrooms,” and the blogger talked about how nice it was to have a guide “we could ask anything. There were no dumb questions.” For those that believe motorcoach tours mean second rate hotels, it was an eye opener.
Beyond TTC, Tollman is bullish on the travel industry. He serves as vice chairman of the World Travel & Tourism Council, a group of 100 CEOs from a variety of travel companies that provides the industry a unified voice in speaking to governments. He points out the industry supports over 270 million jobs, and notes that while high end luxury goods and fashion are facing strong headwinds, travel, perhaps due in part of social media, is increasingly becoming a badge of honor, with more and more consumers eschewing jewelry and handbags or new shoes so they can see the world.
While the future may not be a given for TTC, Tollman says he is intent on making sure he and his executives understand what customers want. Since assuming the group’s leadership in 2010, he says he followed former GAP boss Mickey Drexler’s advice, and now several times a year joins his tour groups, mingling with customers and experiencing the product first hand. His brand executives each do the same.
Tollman notes that successfully transitioning a privately held family business from one generation to the next is no easy task, and while at 51 he expects to be in charge for the foreseeable future, with his brother’s children engaged, it is now time to start keeping an eye out for who the next leader will be.
Of course, it’s the small touches that might help get TTC into the 22nd Century. Coming into the Milestone on a dreary, cold London afternoon, there is a roaring fire, and in the area next to the front desk is a table with a crystal flask of brandy welcoming the visitor to pour their own glass, sit down and relax. “When you are with us, it’s like you are family. You are visiting our home,” says his sister Toni. In this case, it’s not just marketing spin developed by an ad agency trying to create a story.