Interview with Trafalgar’s Paul Wiseman

Interview with Paul Wiseman – Managing Director, Trafalgar Tours 

The Mole: How was 2005 for Trafalgar Tours?

PW: I guess 2005 was the first year that Trafalgar really came back to where we should be, full levels if you like. 2001 was terrible, 2002 was worse, 2003 was some growth but then SARS came along. 

So 2005 was great for us, we didn’t have any operational problems, we didn’t have any sales problems and for the first time in a long time the volumes got back to the sort of levels we’d seen in the mid eighties, early nineties. 

What’s happened to coach touring is that traditionally customers would buy a first time traveller tour, you know, that was the primary reason that coach tours existed. They’d do multi country tours and come back and say “right, that was fantastic, but now what we want is to go back to Spain, or Italy or France” because those tours just touched on those countries and they wanted to see more. 

So we built a whole series of “Best of” Tours. And what we found is that our business has evolved into what we call a  “third, a third a third”  and what that means is one third of our business is now first time travellers, and that used to be 100% of our business. 

The next third is regional product in Europe, and we have a full range of “Best of” tours, France, Italy, Spain, every country you can imagine. 

And the rest of our business is Britain and Ireland, where we’ve always been particularly strong. So the business mix has certainly changed since pre 2000, and 2005 that just continued. 

Now what happens is that people come back from the “best of” tours and say “well, I did the best of Italy but I really want to spend some more time in Tuscany” for example, so we’ve built a whole series of tours exploring specialized regions, even more focused.  

And those tours don’t even look like coach tours anymore, they’re so targeted and specialized with a day here shopping and then a day off etc. They’re attracting a different type of customer now and so it allows us to change our marketing to people who may be well travelled, but they’ve never done a coach tour and now we have a range of product that they may find appealing. 

The Mole: So who were those customers travelling with before, where have you pulled them from? 

PW: I don’t know if the overall market to Europe is growing, but when I look at our 2005 vs. 2006, I have no doubt that our business is going to grow at around 15-20% overall, and when you consider 2005 was probably our fourth biggest year ever, clearly the coach touring market is pretty robust. It was getting younger, but that has stopped, and now the baby boomers are starting to move through.

Agents are very positive about the coach touring market and we expect, provided nothing dramatic happens, that we’ll get continued strong growth over the next couple of years. 

You know, we might crack some numbers we’ve never seen before.  

The Mole: What about Bird flu in Europe as a threat to its popularity? 

PW: Big worry. Watching it everyday.  

However, to date, we’re sitting on more than 50% of our business already, which is as good as it’s ever been. Early bird worked exceptionally well for us this year, better than ever, and I can’t find any other wholesaler who is saying that, but for us, it was exceptional. 

We always work toward 40% by end of January, but well over 50% is a dream, so that indicates things are very strong. 

The Mole: What’s new and working for you this year? 

PW:  River cruising, without a doubt. Brand new, didn’t exist four years ago, it’s come from nowhere. 2001 there would have been 400 people out of Australia did a European river cruise, 2006 there’ll be 12,000, something like that. 

The Mole: Why the sudden surge in interest? 

PW: A dramatic change in product. In the 90’s the product was pretty ordinary, now there are really nice 5 star experiences to be had. The other change is there is more money being spent on our products now than ever before. Customers are just upgrading, no doubt about it. They are paying for better inclusions, no problem. 

The Mole: Why is that? 

PW: I think it’s just a fundamental change in the Australian travellers psyche. In the old days, Trafalgar would take a large number of people who had saved up for ages for that one big European holiday. They’d be going for months and it was unlikely they would repeat within the next five years. That has changed completely. 

Agents now tell me that the repeat factor is huge. Their customers are going every second year if not annually. And they’re spending more, they want more. It’s a demographic and social shift. Baby boomers don’t leave the house and the money to the kids now, they want to experience the good things themselves. 

The Mole: So the challenge for Trafalgar is to find better, sexier, more interesting tours / product to feed this market? 

PW: We have to keep the product relevant, that’s the thing. They’re more interested in free time, they’re more interested in indulgence, experiences. The old perception of a coach tour, “if it’s Tuesday this must be Italy”, that doesn’t work anymore. Being told where to go, what to do, led into the shops, that’s gone. 

Fortunately, we realized that years ago and built product to suit. People are more active these days, they are more adventurous.  

Ten years ago a Trafalgar customer bought a Trafalgar tour and that was it, the itinerary was laid out. Now it’s so much more complicated, the choices so vast. And that’s why we don’t go direct to customers, and we actually have no interest in doing it, is simply because the purchase is so complicated.  

Our customers are now booking Trafalgar tours, they’re renting cars, they’re staying in castles, they’re visiting friends, mixing and matching the products. We try to present our offering 40-50% cheaper than they can do it themselves, and we pretty much guarantee that they’ll see twice as much in half the time because it’s all organized for them. 

That’s the change, our customers are now including our product in the overall mix of things that they are already doing. Which is great, because they’re not leaving us to go and do something different, they’re including us. 

The Mole: You now guarantee tours, is that a big thing for agents? 

PW: Guaranteed tours was introduced because of SARS. For years, cancelled tours were the biggest issue for agents and after SARS we realized there was a very real danger that we ran the risk of losing the faith of the entire distribution system. It was just too hard for them to play Russian roulette with our product. 

Guaranteed tours fixed that almost overnight. Agents went from concerned and stressed to absolutely delighted in a very short period of time.  

The Mole: Agents always love a good famil. Are you still in the business of taking groups away? 

PW: We’ll do as many land content famils as any agent wants, but, air is a complete disaster, and it’s getting worse. We are looking at our program that we want to run this year which is equal to what we ran last year, but it’s unlikely simply because we can’t get the air tickets. 

And the reason for that is , like all wholesalers, we now ticket less air every year, so when we go to the airlines asking for 40 seats they’re simply not interested. We now ticket less than 20% of our product with air now, it used to be 60%.  

So if an agent can organize their own air, we’ll look after them, but the good old days are gone unfortunately. 

The Mole: You’re doing a series of road shows at the moment without the agents? Doesn’t that raise the spectre of Trafalgar taking its massive consumer database and brand and going direct? 

PW: It was the first question that every chain raised when we informed them. If we wanted to go direct we could have gone years ago. We could write straight out to that mass of people, offer them a 15% discount and bang, business would come our way. 

The reality is we simply do not want to do that at this point in time. We think it’s the wrong direction for us, we truly believe the cost of sale would be about the same as the current agent distribution model in its current form. 

However, if that changed significantly and agents told us for some reason they didn’t want to sell our product, or it became unsustainable for us to sell at the current costs, we’d have to look at it. But at the moment we just don’t see that it makes sense do that, so we’re not. 

The Mole: Thank you Paul.