OTAS & LLCS Mounting Pressure: Tollman

“Reinvention” is a word commonly used by Brett Tollman to describe how travel companies need to come of age to ensure they remain relevant in an age of the ‘do-it-from-home’ travel booker, writes Guy Dundas.

bretttollman low resBy Guy Dundas

“Reinvention” is a word commonly used by Brett Tollman to describe how travel companies need to come of age to ensure they remain relevant in an age of the ‘do-it-from-home’ travel booker. Relevant, and competitive.

During a recent visit to Australia, The Travel Corporation (TTC) global chief explained to travelBulletin that the rise-and-rise of online travel agents and low-cost carriers was hurting traditional tour operators, and will continue to do so if businesses rest on their laurels.

Tollman is well positioned to make the claim. With touring and guided holiday brands such as Insight Vacations, Trafalgar, Contiki and AAT Kings among his stable, the LA-based executive outlined how TTC was in the midst of a “massive reinvention program” of brands. While Insight and Trafalgar experienced brand overhauls seven years ago, he said AAT Kings was next on the agenda.
“Our industry is under significant pressure from OTAs, whether that’s Expedia or Priceline… or the way Airbnb is going, and the Ubers of the world,” he commented.

The burgeoning internet means travellers now have a copious range of tools to help plan, build and book their own self-drive holidays which can be married with low-cost airfares to construct inexpensive fly and drive packages. This is particularly so for domestic holidays which has had a sizeable affect on AAT Kings’ business model.
Wind back a decade and Tollman said there “wasn’t huge demand for touring in Australia”.

“In the last several years we’ve seen so much change, not just in Australia and New Zealand, but also in Europe and North America. Ten years ago there was no ocean cruising out of [Australia] but this year the region will probably hit over one million. River cruising didn’t exist 10 years ago, so certainly our touring model is under significant threat,” he commented.

“People who come to Australia from traditional markets don’t need to do an escorted tour because of the ability to fly-drive, with low-cost airlines making it possible to fly … at a significant saving as to what it would have been five to ten years ago.”

To counter the concerns, AAT Kings has introduced more short breaks and brought Inspiring Journeys into the fold (five years ago) to build cultural experiences and encounters with locals.

“We are constantly working on fine tuning our service quality, coming up with new products and experiences that meet or match people’s expectations, or changing needs and desires. We’ve spent the last several years trying to reinvent the business, from branding to the quality of experiences we’ve got coming out.

“A nationwide footprint was the initiative behind working with APT and buying out their Connections business 3 or 4 years ago. We are working with Down Under Tours now so that we have a presence in Cairns to address the inbound Chinese and the newer markets that are developing. And we just met with Anthony Hayes [AAT Kings managing director] to talk about where we go next as the markets continue to evolve.”

One product that has been fine-tuned to appeal to a more global market is Inspiring Journeys, with Tollman conceding that it is still a work in progress.

“I think we are still refining the product. Launching [Inspiring Journeys] purely for the Australia/NZ market wasn’t a wise decision. It was very much a consumer direct focus. At about $600 per day it was a mismatch in the market. The itineraries were a bit longer than we needed. The 4WD vehicles we had weren’t necessary and were very high cost to maintain and operate. We’ve refined some of that and it is working fantastic now,” he said.

Despite concerns, Tollman welcomed competition. “Business is not growing from the core traditional markets of the USA, Germany, and the UK , so we’re looking at what we can do in these economic times.

“Competition is always great. For those who respond timely enough, it helps you to look at your business to determine ‘are you doing enough to engage your customers, deliver great value & experiences’ and to to compete in this very competitive, disruptive business.”

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