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Taking the roads less travelled

Brett Tollman, group CEO of The Travel Corporation, shuns public ventures but instead, banks on the passion, dedication and loyalty of people inside his privately-owned and family-run business.
Saturday, February 6, 2016 - 05:50
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'Happy staff make happy customers which make happy owners. We've always applied that ethic and approach to business.'

SINCE childhood, Brett Tollman, global group chief executive of family-run The Travel Corporation (TTC), has spent his summers working in the family business.

When he later joined full-time at the age of 21, he continued to learn the ropes from the ground up, working in different roles across the group.

His favourite experience so far has been working in the kitchen as a cook.

"It's hot, it's pressured, but everyone has a common purpose of getting the food out on time, making sure it's as good as can be so people have a memorable and enjoyable time," says the South-Africa born businessman.

The hands-on experience has given him a strong understanding of the business, one which he recommends to any business owner.

In fact, all the group's executives still spend one day a year working in the group's hotels, which could see them doing anything from making beds to playing bell boy. Doing these labour intensive jobs serves as a reminder of where you come from and what your staff go through, he emphasises.

"Happy staff make happy customers which make happy owners. We've always applied that ethic and approach to business," he adds.

Spanning four generations, the privately-owned, family-run TTC has grown over the years from just one small hotel in South Africa before expanding its footprint to a group operating in about 70 countries today. Its portfolio lists over 30 different brands, including well-known names such as Trafalgar Tours, Insight Vacations and Contiki Holidays; this enables it to serve around two million customers a year across the range of holiday styles, be it independent or guided, luxury travel, safaris or river cruises.

Guided tour company Trafalgar is TTC's core business - and has been since the 1950s. Over the past six decades, the group went on to acquire new brands - such as Contiki and Uniworld Boutique River Cruise Collection - and established a number of start-ups. Today, its guided holidays contribute some 40-50 per cent of revenue, while river cruises and luxury hotels account for about 20 per cent and 10 per cent respectively. Other businesses such as free, independent traveller (FIT) and its ground operator services contribute to the remainder.

"Our core brands - Trafalgar, Insight, Contiki, Uniworld - are doing well and will continue to do well. Our premise is to deliver outstanding quality, value and consistency in all of our experiences in all our markets," he says, adding that this leads to repeat customers as well as new customers through user-generated content on online platforms such as TripAdvisor.

Acquisitions tend to be opportunistic since the group doesn't believe in over-leveraging itself by overpaying, says Mr Tollman. Recent purchases include Ashford Castle in Ireland by its Red Carnation Hotels company for 20 million euros (S$31.2 million) in 2013.

While the US remains the group's biggest market, Asia is the fastest growing. Today, 10 per cent of the group's revenue stems from the Asia-Pacific but Mr Tollman projects that this could rise to 20 per cent in the next five years.

"We put more and more emphasis and focus on (Asia), based on the pivot from the West to the East and the projection of growth out of Asia."

Over the last five years, Trafalgar has seen "wonderful" growth out of Asia, and Contiki, Insight and Uniworld have also started to see similar growth, he highlights.

While Mr Tollman declines to reveal overall group revenue and profit figures, he says that both the top line and bottom line have grown 5-8 per cent in recent years. The group is "largely debt free", with the majority of profits being ploughed back towards the business, allowing it to make investments in new products, technology as well as capital-intensive businesses.

"China and Asia have been a particular effort and focus of ours. We've taken a couple of our brands to China where we've started a Mandarin-speaking Trafalgar programme, for example, for outbound to Europe and North America."

There could be as many as 200 million outbound Chinese travellers by 2018, it has been projected, which no doubt makes for an attractive prospect for the global hospitality industry.

Other promising growth markets for the group include Japan, Indonesia, India, Malaysia, the Philippines and Myanmar. "There's no market we've closed eyes to, or aren't looking to expand in," he adds.

Where business segments are concerned, Mr Tollman identifies river cruising and hospitality as potential bright spots.

"River cruise is going through a dramatic growth curve. Anyone who's taken an ocean cruise is certainly a potential customer for river cruising," he continues. "The hotel business continues to grow well. There's amazing growth anticipated and it's been seen over the past several years in long-haul travel."

This is not to say that the tour and travel industry is bereft of challenges. Political instability, foreign exchange volatility, disease outbreaks, government policies; all these can - and have - hit demand for individual markets or regions at one point or another over just the last year. For instance, demand to Africa has fallen in the wake of the ebola outbreak.

But diversifying the business helps to smoothen out the lumps and bumps. Meanwhile, new investments by TTC in additional destinations and experiences will also pay off, he reckons. For instance, Insight has launched Luxury Gold to cater to the luxe holiday segment, while its value-brand Cost Saver has undergone a restructuring.

Growth out of Asia will likely clock 10 per cent this year, but Mr Tollman is still taking a cautious stance when it comes to the overall outlook for 2016.

"I don't want to ramp up and then have to cut back. The world out there is very uncertain," he says, pointing to softer demand for markets such as Paris, Egypt and Russia due to political instability or terror attacks. "You have all those kinds of issues which are constantly bubbling up, which one has to react to and do your best to mitigate."

But he remains bullish on the long-term outlook for the travel industry, pointing to an emerging middle class, burgeoning global population and continued robust demand for luxury travel.

With the future looking bright, could an initial public offering be on the cards for TTC any time down the line?

"We've been involved in some public ventures before, and certainly didn't care for them, so the answer is no," he says. "With public companies, you're always under pressure from shareholders and the markets. Not having any of those pressures allows us to take a long-term commitment to our people, our investments, and ultimately to our customers. That's a wonderful side of the business to be in."

"Being a family business, we bring a lot of passion and dedication and loyalty - and (our employees) know that," he underlines.

His father, Stanley Tollman, is the founder of TTC. Two of Mr Tollman's relatives, Gavin and Michael, are heading up certain businesses, while Mr Tollman's niece and nephew are also working with the group.

But the family also made headlines in 2008 after Mr Stanley Tollman pleaded guilty to tax fraud and agreed to pay the US government over US$105 million in back taxes and fraud penalties over funds stashed in bank accounts in the Channel Islands. Earlier tax charges brought against Mr Stanley Tollman's wife Beatrice were dropped. However, Mr (Brett) Tollman reportedly pleaded guilty to tax evasion in 2003 and was slapped with a US$3.5 million penalty and sentenced to over two years in prison, the Belfast Telegraph reported. TTC did not comment on the matter after a query from BT.

Despite its present size and scale, TTC is doing its best to stay nimble and react to new and emerging trends which are coming to the forefront, such as Airbnb and EatWith. The latter offers travellers a chef-cooked meal in any given city.

"You always need to make sure you're staying ahead of current trends and changes in the marketplace," he says. "Competition keeps you alert and on your toes - and we always embrace that. But we also believe you can't spend too much time worrying about what the competition does. You focus on running your own business as well as you can and largely, everything takes care of itself."

To stay relevant, TTC is rolling out new, unique experiences. For example, Trafalgar offers "Be My Guest", which sweeps travellers off to a vineyard or a chateau for a home-cooked meal and a chance to learn about the family who lives there, their culture and their community.

"How you differentiate yourself is what makes the difference between you and (a competitor) being chosen. That's something we're constantly working on in order to stay current, stay relevant and to appeal to some of these emerging or demanding trends by travellers," he goes on to say.

Similarly, there is an increasing transition to online and mobile bookings, which has prompted the group to make hefty investments in the "tens of millions" towards adaptive and intuitive websites as well as mobile apps over the last seven years.

"The growth of mobile will continue to get stronger and stronger," he reckons. "For all of our brands, we're constantly bringing in new booking platforms. We're always challenging ourselves to make things as simple and easy to use as possible."

In addition, TTC is eyeing Internet-related acquisitions both within and outside the travel industry - as long as the business shows strong growth opportunities and doesn't require sizeable capital requirements to the tune of hundreds of millions, he says. "It's not something that most family-run businesses could afford, and/or could put you in substantial jeopardy if you over-extend yourself."

As the chief executive of a travel company with a diverse geographical footprint, it perhaps comes as little surprise that he is on the road 250 days a year for work.

But Mr Tollman still enjoys travelling and says he appreciates experiencing travel through the eyes of his three children. (He has a girl and two boys).

"I certainly don't want to try to drive my children . . . into the business," he muses, when asked if his offspring too will one day join the family business. "My wife and I have been very egalitarian about that, but taking them on various holidays and experiences hopefully opens their hearts and minds to what an amazing business it is. So I hope so. It is always a challenge to perpetuate (the family business) for the next generation."

While grooming the next generation isn't keeping him up at night just yet, he remains hopeful that one of the family's eight grandchildren will be the "spark" to take TTC forward.

Aside from keeping TTC sustainable in the years to come, Mr Tollman is also a big champion of sustainable travel, having started non-profit organisation The TreadRight Foundation in 2008. The TreadRight Foundation, which is funded by TTC, helps to protect the people, cultures and wildlife in the places that it sends travellers to.

"We're all responsible for our planet, so we all need to do more, whether in our daily life and/or when we travel," says Mr Tollman. "Travel is sometimes criticised for being a significant polluter (and) contributor to the decline of cultures. I don't necessarily believe that."

''I think travel is remarkable as a force for good. It opens people's minds and hearts to new cultures, destinations and builds a better understanding between cultures. At the same time, we all leave footprints and we need to be careful and responsible, respecting those cultures when we go.''


BRETT G TOLLMAN
Chief Executive, The Travel Corporation

1961: Born in Johannesburg, South Africa

1983: Graduated with a BSc in Hotel Admin from Cornell University

1983-2002: Various roles with Tollman-Hundley Hotels

1983-1987: Vice-President, Food & Beverage

1987-1992: Executive VP of Operations

1992-2002: President

2002-2010: Vice-Chairman, The Travel Corporation

Since 2010: Chief Executive, The Travel Corporation

Since 2007: Vice-Chairman, World Travel & Tourism Council

2008: Founded The TreadRight Foundation

2015: Named a Visionary for Travel, Tourism Cares 'Happy staff make happy customers which make happy owners. We've always applied that ethic and approach to business.'