Trafalgar Brings Dynamic Pricing to the Guided Vacation Business

Every travel agency has its own unique business model, so success for suppliers lies in listening as much as talking, said Trafalgar CEO Gavin Tollman. When Trafalgar listened to its agent partners, it heard that they shared a major pain point: customers who ask a million questions and then go and book their trip somewhere else to save a few dollars.

In response, Trafalgar has come up with a new model for doing business. Trafalgar will guarantee 100 percent of its Europe trips through spring 2018 and all its Hawaii 2018 trips, and also will offer 100 percent dynamic pricing on all Costsavers trips.

In New York this week with Trafalgar USA’s president of four months Melissa da Silva, Tollman said agents’ number-one complaint is and has always been “customers trying to book it somewhere else cheaper.” So, Trafalgar is taking a page from the airline and hotel playbook, moving prices steadily upward as the date of travel gets nearer.

With this kind of dynamic pricing, if they “don’t make a booking today, it could well be more expensive tomorrow,” he said.

“We call it our ‘Ready to Go’ rate. If you book it today, you have three days to make a deposit at that price. After that, do not be calling us to ask us to open an old rate. The rate will never go down.”

Tollman said Trafalgar is the first “guided vacation company” to try dynamic pricing. Agents to whom he has spoken are “a little apprehensive, “when they first hear about it, but he is convinced “agents who adopt it will love it. It builds urgency into every booking. I believe we will totally disrupt the industry.”

Business is up, and the importance of travel agents
Tollman noted that the idea of shaking things up comes in a year of great strength at Trafalgar and in the guided vacations business in general. Many travel agents are seeing “growth beyond their wildest dreams” and Trafalgar is closing on 22 percent sales growth in 2017, the second-best annual performance in its history.

He reiterated how important the travel agent channel is to Trafalgar, and how well da Silva, a former travel agent herself and something of an expert in online marketing, understands how to help them sell.

“She understands the issues, every aspect of how and what an agent should be,” he told Travel Market Report. In today’s market, “it’s about being able to communicate to the world how we are an incredible way to discover new places, and the easiest way to do that is in the digital space. And clearly Melissa is able to take our message and get it in front of millions of customers. As we take our huge step forward, she will be our catalyst to take what we do and get more out of our agent partners.”

Beyond the addition of da Silva and a new sales team of four based in a new Manhattan office, Tollman attributed the growth to the “great strength of the U.S. economy” intersecting with a renewed appreciation of the importance of travel by U.S. consumers.

“Before when you used all your vacation time everyone looked at you; now everyone is beginning to understand how important travel is to your well-being,” he said. “We live in such a time-deprived world, we need to decompress — and with guided vacations, you arrive and everything is seamless and effortless. It enables you to reconnect with your family, and with the locals in an exciting, energizing, fulfilling way.” For travel agents, he said, that means “If you sell a Trafalgar vacation, they will come back time and time again.”

What’s hot for 2018
For 2018, customers are showing a renewed interest in Egypt, where he said “numbers are through the roof and I personally will make sure I go there,” as well as Scandinavia and Italy.

New tours in 2018 include a 12-day tour out of Rome heading north along the west coast, and an 8-day trip to Norway; “easy access is a huge driving force and all of the small carriers in Europe are going there, along with the draw of the natural beauty of the country. Copenhagen is like the food capital of the world, and it’s a very fun place to go,” he said.

Brendan Tours, meanwhile, is offering new Golf Heritage trips to Scotland and Ireland that combine play on unique historic golf courses, “unbelievable hotels,” and enough immersive historic and cultural offerings to interest those who don’t even play, da Silva noted.

In the end, they both said, “our commitment is to the trade and we have some very exciting proven tools to ensure your success. We offer an open invitation to speak to our team and we will show you how to grow your business.”