Trafalgar's Gavin Tollman

By Michelle Baran
Gavin TollmanGavin Tollman was named Global CEO of Trafalgar in May 2010 after stepping away from the brand for a few years. In the last two years, he has worked to put the escorted tour company on a sustainable growth path, and part of that strategy has meant emphasizing the U.S. as a growing destination market. Tollman recently sat down with Senior Editor Michelle Baran to discuss his vision for the guided vacation business.

Q: How much is the U.S. growing as a destination for Trafalgar?

A:
In the middle of June, we will launch our new U.S. and Canada program. We have added an additional 10 itineraries. We are now running 51 itineraries in 2013, just over 20% additional departures. We are looking at about 30% growth.

Q: Why do you think the U.S. is booming as a destination?

A:
It's not a deterrent that the dollar decreased. So the value proposition is exponentially higher. Each of the various destinations has become more interesting within the country itself. The greatest growth we see is in the cities: the New Yorks, the San Franciscos. No. 2 is the national parks, which have never been more interesting.

Q: How does the U.S. compare with other destinations?

A:
Europe is still exponentially the largest destination. Everything else pales in comparison. Our business in the U.S. has been hugely successful, and we have seen -- it really has been in the last four years, and you can almost tie it directly to the GFC [global financial crisis] -- we just saw this huge acceleration in Americans doing domestic travel.

Q: What brought you back to Trafalgar?

A:
I became the head of TravCorp USA and Canada in 2002, and then we decided the biggest opportunity was for me to actually take over Trafalgar worldwide. I stepped into the brand in 2004. We started doing some interesting things. But then there were a couple of issues that came up, and I worked on a separate project. But having been involved at Trafalgar for a couple of years and seeing where it was going, I was very critical of it. [The board said], "If you think you can do better ... why don't you come in and do it?" Back in 2009, I came back in, and it was then when I started asking many of the tough questions.

Q: What was the state of the company when you came back?

A:
Trafalgar is a hugely successful entity. It is the cornerstone of the Travel Corp. My question was a very different one. I was less concerned by the financial success of this business than I was by the long-term sustainability of it. You look at what cruises have done in the last 20 years, what the hotels have done in the last 20 years, and all of them have evolved their product to make it far more relevant to the needs of the traveling public. And I was concerned that we were not doing that. We were doing things very similarly to what we had always done.

The challenge I set for Trafalgar when I rejoined the company is, how do we create a long-term, sustainable-growth business model whereby we have an ability to attract a far greater, robust audience? ...I am looking to grow the pie, and at the same time not alienate our existing customer.

Q: What keeps Trafalgar competitive is price. But when you add new elements to the experience, like Trafalgar's new insider experiences that include expert guides and local family visits, are your guests having to pay a premium for the evolving product?

A:
It's a real balancing act. ... We always are looking for that value proposition. When you look at our USA and Canada brochure, what I've done is instead of taking these insider highlights and embedding them in the itineraries, I've gone out of my way to bring them forward. Because clearly there is going to be a premium to pay for them.

Q: In doing this, do you risk losing passengers who just travel on price?

A:
Clearly. That's why in our Cost Saver product we didn't do it. I'm building this to get it right for the long term, not for the short term. To grow the size of the pie, you have to not just worry about those people who are so value-conscious. I can appeal to both.

Q: How has the trade responded to your growth plan? What is their role in it?

A:
Agents who have adopted this business model worldwide have had a 100% success rate. Those who are passive, every single one of them is down year over year, because the market overall is down.

Q: The tour operator industry is very fragmented. Do you feel the industry would benefit from a joint marketing effort?

A:
If we could act collectively, in a unified way, the whole would be far greater than the sum of the parts. There is absolutely, categorically no doubt about it. The Travel Corp. has always believed that we should do it. I bet you, because I know this for a fact, if I took my past guest database [and compared it] with Globus' past guest database, I guarantee you they're the same people. Of all my past travelers, 90-plus percent of them have traveled with Globus, as well. That is not what this is about. I don't just want to be sharing the same customer. This year they travel with you, next year they travel with me. It's insanity.

Q: Isn't that the potential of an organization like the U.S. Tour Operators Association? To be that neutral territory where you can all come together?

A:
Sure. They should do it. ... The bottom line is there's an opportunity if all of us to start speaking from the same voice. There is no doubt that [the cruise lines] all understood that very early on. We didn't. And everyone understands it in theory. Delivery is something else.

For news on tour operations, wholesalers and river cruising, follow Michelle Baran on Twitter @mbtravelweekly. 
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