Addressing hundreds of Dream Vacations and CruiseOne franchise agency owners and associates at the national “Forward” conference on Norwegian Encore this past week, Brad Tolkin, co-chairman and CEO, World Travel Holdings (WTH), firmly believes that “in 2022 and 2023, travel will be considered the best industry to be in.” He told the advisors that “the clouds are parting, and we only see bright skies.”
Reporting robust bookings and increased travel/cruise product pricing, “we are moving forward,” he says, calling 2022 “our best year ever...We only see green."
Bookings Soar, Pricing Rises
How so? Compared to 2019, Dream Vacations' and CruiseOne's land vacation bookings are up 33 percent, while cruise bookings are up 23 percent. In addition, land vacation pricing is up 18 percent and cruise pricing is up 6 percent. “And this is even getting better,” he said, noting that those numbers were from about a week ago and since then results have been even more impressive.
Tolkin also says that the two trade franchise groups are "reporting numbers better than what the cruise lines are reporting.” A nearly 43-year travel industry veteran, he tells advisors that his messaging has been consistent over the past two years—that when the pandemic ends, it will be “the greatest build-up of demand in leisure travel that I have ever seen.”
And, he explains that this has come to pass. Customers really love cruise products, he says. Plus, pre-pandemic, the cruise industry had posted the best five years in its history. So, “it was impossible for this industry not to be great again,” Tolkin explains.
As for the strength of the trade, he echoed a message given by Debbie Fiorino, chief operating officer for the two agency franchise brands, earlier in the week. “CruiseOne and Dream Vacations have recovered faster and are growing faster on a percentage basis than our direct-to-consumer business lines,” Tolkin acknowledges.
In addition, while consumers definitely want to travel, “we also know that they value the expertise of travel advisors more than ever before,” he says. “So, this is the moment in time to cement customers for life."
Recession Possibility?
Addressing the “potential elephant in the room”—the economy rolling back or a possible recession—he tells advisors: “Do not fear this. Leisure travel has always weathered this well. Yes, pricing might come down, but transactions go up.”
Historically, he notes that World Travel Holdings had “phenomenal years in 2008, 2009 and 2010" as the country headed into The Great Recession and out of it again. Yes, people put off big ticket items during challenging economic times—such as the purchase of a home or car, but not travel.
Tolkin continues: “We’re seeing this now as mortgage applications are at a 25-year low, but our transaction volume is tremendous… so there’s lots of challenging news out there, but it is not stopping our momentum."
What’s changed most about the industry? The profound transformation he cites is a rise in companies allowing employees to work remotely. “Hybrid is here to stay,” he adds. "The genie is never going back into the bottle.” He explains that a working couple can double their time away from the office because of their ability to work from anywhere for a period of time and the acceptance of employers to allow for this. And that applies to both customers and their travel advisors.
“We heard this from Shane and Trapper,” he said, making a reference to Trapper Martin, Shane Smartt and Associates, a Dream Vacations agency in Orlando, FL, that received the Bobbye Haupt Franchise of the Year Award during the conference.
Words of Advice
Tolkin’s words of advice for advisors? First, he says: "Launch and Iterate,” meaning get out there, just keep doing things and adjust as needed. Second, “Fail Well,” acknowledging that failure happens to the best of people, so fail well and learn from that experience.
Then, he also suggested that advisors “Focus on the Opportunity, Rather Than the Risk." He gives this example. In 2021, WTH opted to merge its Cruises Inc. hosted model into its franchise model. It encouraged those Cruises Inc. advisors to become Dream Vacations franchise owners or associates.
“It sounded like insanity because this business line (Cruises Inc.) from WTH delivered tens and tens and tens of million dollars of cruise sales,” Tolkin stresses. Yet, the company took the opportunity despite the risk. In 2016, prior to the the launch of Dream Vacations, the franchise network was doing less than 3 million dollars in non-cruise sales. But in 2023, the franchise network will do $200 million in non-cruise sales. In addition, cruise sales have grown every year since the change, he emphasizes.
Weathering the Storm, Roaring Back
Tolkin provided a bit of detail about how World Travel Holdings as an organization weathered the pandemic storm. He and his brother Jeff, also co-chairman/CEO, stopped taking any company compensation. The executive team also took 60 percent pay cuts and worked full-time. All employees who worked full-time took some compensation cuts, while some others were asked to work fewer days in a week to save the company money.
WTH didn’t qualify for the government Paycheck Protection Program (PPP) as it had more than 500 employees, the cut-off point for companies to qualify for the grants. WTH didn’t furlough a greater number of people simply to get that grant opportunity.
Instead, World Travel Holdings' senior leadership successfully lobbied the Tolkins to retain as many employees as possible as WTH's most valuable assets. So, the company watched as other host groups/consortia took those PPP funds, but WTH did not.
Today, every employee in the organization is back at full salary, while every employee who worked less time at full salary has been paid back every dime they previously sacrificed. All those who were furloughed were offered their jobs back, and every WTH employee was given merit raises that they missed in 2020 and 2021.
“Every employee is back on a bonus program,” says Tolkin, and "every employee that’s been with the company six months or greater—if they’re just with us to March 1, 2023—they'll be paid a one-time special bonus as an expression of our gratitude.”
January Looks Good
Meanwhile, the Dream Vacations and CruiseOne advisors continue to chug along for sales. For January 2023, cruise bookings are up 16 percent when compared against 2019 levels and the current bookings are at much higher pricing. The first five months of 2023 are also up sizably for both bookings and pricing levels, compared with 2019.
In parting, Tolkin ended his keynote address telling the advisors and their customers that through the most challenging times of the pandemic: “You were our oxygen. Thank you.”
Related Stories
Dream Vacations, CruiseOne Debut Group Bookings Tool
At CP World: Luxury Travel, River and World Cruise Sales Soar
Affluent Traveler Collection Shows Strong Recovery For Luxury
On-Site at World Travel Market: Grounds For Optimism in Travel