Brad Tolkin
When Brad and Jeff Tolkin, long recognized as being among the most brilliant business minds in the business, were inducted into CLIA's Hall of Fame earlier this year, the co-chairmen of World Travel Holdings were cited as `Cruise Sales Innovators.'
When interviewing the Brad half of the brother team this week, Cruise Week soon came to realize there's also a career-long passion for growing the retail leisure side of the business. More than any specific business practices, which he was reluctant to divulge, citing a need to maintain their “secret sauce,” Tolkin says that succeeding in the leisure sales business comes down to loving what you do there.
The Tolkins were introduced to cruising as a business in 1992 with the acquisition of Empress Travel, a 40 shop retail chain. "When we sold to American Express 6 years later that retail chain was 104 stores," Tolkin recalls. "Cruising was such a huge segment of the Empress Travel business."
They’ve maintained that magic touch to this day, riding it straight to CLIA awards and another thriving business, all while maintaining a reputation for integrity.
So CruiseWeek picked Brad’s brain about current issues impacting cruise. Tellingly, the vast majority of his comments centred on issues that ultimately will lead to growing the retail business.
Tolkin says raising the percentage of North Americans who choose cruising is critical. "Until we can move that number, any hope of increasing pricing is dashed. We need more consumers to cruise per year. That's the simplest way to get pricing up."
When searching for solutions, he expresses a desire for CLIA to do more in the way of consumer campaigns. "Arnold Donald [Carnival Corp.] has a terrific story, he’s very passionate about the industry. Richard Fain [RCCL] is too. And Kevin Sheehan [Norwegian] has become that way. I think it would be great if CLIA did more with the 3 of them to promote cruising to consumers."
He cites Richard Branson’s Virgin brands as figurehead-promotion done right. "Especially in light of the 2 seismic events that have happened in the cruise industry in 2012/13 (Concordia/Triumph), you need more of a human touch behind it and they all possess that."
The big picture he emphasizes, is recognizing that the competitive challenge is not within the cruise business. “I think that the whole mindset of moving business from line A to B is just totally wrong," says Tolkin, as one example. "Retailers can move business, but it’s not from line A to B. It’s from cruising to a resort vacation."
Hence, he says, the challenge should be getting everyone together and working on how to increase the number of North Americans who cruise per year. "When cruise lines come in and say support me over my cruise colleague who works for the other company, that’s just totally wrong, because all you're doing is playing ping pong with that customer.”
In summary: "If we increase the amount of cruisers per year we’re not going to have to worry about Line A and Line B. What they should be worried about is the competition. The competition is not each other, the competition is other leisure product."
Tolkin uses the term "margin compression," to describe one of the big challenges facing cruise retailers now. As there are several promotions going on ostensibly aimed at helping agents increase commissions, we asked whether these promos are helping the agents widen their sales margins.
"They absolutely have a certain impact," he replies. "I would not call the impact great." He explains: "I think the industry needs more structural adjustments than just tactical adjustments. They’re appreciated. We fire ourselves up around these opportunities because we’re in the ‘for profit’ business. But I think in general they have a limited impact and certainly they’re short term. And cruise retailers are wise enough to understand that we need some more structural changes."
