Tauck's Time to Shine

Eighty years ago, the Tauck family began what is now one of the top providers of escorted tours. In this competitive marketplace, Tauck World Discovery has managed to stay on top. The company has increased the number of destinations and tour products offered in its main programs, and successfully expanded into the family market with the launch of Tauck Bridges, all while maintaining an impressive repeat-visitor rate of over 50 percent.

All the years of experience seem to serve the Connecticut-based tour operator well in today’s industry. With the escorted-tour marketplace crowded with reputable tour operators offering both international and domestic packages claiming one-of-a-kind experiences, how does one tour operator stand apart from the crowd? And with a large number of baby boomers entering retirement, will the whole concept of escorted tours change?

Tours for Individuals

According to CEO Robin Tauck, the company’s success is based on a number of factors, the first being that Tauck is not the typical “if it’s Tuesday it must be Belgium” tour operator. Instead of a pack of travelers following a harried, umbrella-waving guide trying to get travelers from point A to point B with no deviations in the itinerary, in each tour Tauck tries to give travelers an in-depth immersion into that destination.

“You’re experiencing the wines and cuisines of a destination through a visit to a local winery or through a cooking demonstration by a renowned chef preparing traditional regional recipes,” said Tauck.

In Moscow, for example, guests are taken to Red Square to hear a lecture on the fall of communism given by Mikhail Gorbachev’s translator or from another Kremlin official who witnessed the events firsthand. In the Loire Valley, a French baron hosts a private dinner for tour guests inside the chateau where his ancestors have lived since the 1700s. Even on the five-day Kentucky Derby tour, guests learn about thoroughbreds through a live demonstration from a horse whisperer.

The pacing of the tours, Robin Tauck points out, is also different than what many people may be used to.

“Over the years, we’ve modified our itineraries to include longer stays in key cities, and we’ve built extra free time into those stays so guests can explore more on their own,” she said. “Where the old image of a tour involves a group of 30 people traveling as a pack, the Tauck reality is 30 individuals sharing an experience.”

Scott Supernaw, vice president of sales and marketing, is quick to point out that this concept of individuality is something that sets Tauck apart from other escorted tours.

“Our groups don’t eat en masse. They eat when they want and order from a menu, not pre-selected meals. Our travelers like the camaraderie of a group, but still want to feel like an individual traveler,” he said.

In fact, Supernaw said the company experimented with smaller group sizes, but the feedback it received was that travelers like the larger group interaction, as long as it is not at the expense of individual attention.

“There’s a sense of dignity in our tours, guests aren’t herded around; they are treated like individuals and made to feel like solo travelers when checking into a hotel,” he said.

Tauck pointed out that the company is often able to arrange preferential treatment for guests, from private concerts to VIP admission into popular museums and galleries.

“What separates Tauck from other tour operators — and we hear this often on guest comment cards and in market research — is the quality of the experience on a Tauck trip,” she said. “A thousand different things shape the guests’ impression of the experience, and we work very hard to stay attuned to all of them. By consistently exceeding our guests’ expectations, we’ve built a loyal following of Tauck travelers and the industry’s highest repeat guest rate [over 50 percent]. Our past travelers are also our best salespeople, and over 60 percent of our first-time guests learn about us through recommendations.”

Supernaw pointed out that many tour operators contract their tour guides abroad. These guides change from year to year, and there’s no long-term commitment. Tauck tours, however, hires staff in locations around the world, and its staff receives benefits and the opportunity to invest in the company, as well as long-term employment. He said this breeds employee loyalty, which comes across on tours.

“Our employees are dedicated to excellence, and we recognize that they truly deliver the Tauck experience to our guests, so we treat them well and we foster their development, and they in turn are incredibly dedicated to the company,” Tauck said. “In fact, our call center staff averages over 10 years of tenure with the company. Our Tauck Directors average over 11 years with us. They are members of the Tauck family, and they’re employees of the company with full benefits, a 401k plan and profit sharing. Our employees have a level of experience, knowledge and expertise that adds tremendous value to our company and really enhances the guest experience.”

A family business can be a tricky endeavor, but the company has had smooth transitions in leadership since its birth in 1925.

“What really sets Tauck apart is the consistent family leadership and the knowledge and experience we’ve gained over the past 80 years,” Robin Tauck said. “It’s helped us make a seamless transition as each new generation has taken over the leadership of the company. The business didn’t miss a beat when my brother Peter and I took over the reins from my father in 1997, or when my father succeeded my grandfather in 1958. That’s very unusual for family companies, as only 3 percent of family-owned businesses survive to the fourth generation.”

Supernaw added that from a business standpoint, in a family-run company, you’re able to do things that might not make immediate financial sense in order to build loyalty in the long run. After Sept. 11, for instance, Tauck tours provided 100 percent cash refunds on 11,000 cancellations. It was a sizable cost, but it went a long way in building loyalty among clients and travel agents.

“It was simply the right thing to do,” said Supernaw.

Continued Growth

The past several years have been a time of rapid expansion for Tauck. It has added more than a dozen new itineraries in 2005, and this year it is launching 17 new Tauck trips, including Egypt and India. Today, the overseas tours account for more than 50 percent of Tauck’s annual sales.

Tauck also added signature Tauck VIP events at the Rose Bowl and the Kentucky Derby (last year it hosted the largest-ever private group at Churchill Downs).

The company also added the Tauck Bridges family trips in 2003, which now includes more than a dozen itineraries in eight countries. The tours are a collection of escorted trips designed specifically for families.

“Bridges was one of the fastest-growing areas of our company in 2005, with a 23 percent increase in sales,” said Tauck. “This year’s sales are currently running 28 percent ahead of last year, and we just added new Bridges programs in Africa and France.”

Supernaw agrees that Bridges has been a standout for the company.

“Bridges is one of the areas of the business that we are most proud of,” he said.

Only one-third of Tauck Bridges trips are taken by parents with their children; a third is grandparents traveling with their grandchildren and the final third is multi-generational, with grandparents, parents and children all traveling together.

The company also offered its first European river cruises two years ago, and that has quickly grown to the nearly 60 published departures it has now. In April, Tauck is debuting a brand-new riverboat, the Swiss Emerald, with Amsterdam to Budapest itineraries. The state-of-the-art boat features 14 luxury suites and every cabin comes with high-end amenities.

Tauck has also greatly expanded its Tauck at Sea ocean cruise-tours, with 150 departures on 17 itineraries in the Mediterranean, Aegean, Adriatic and Baltic seas, plus voyages in Alaska, Latin America, Antarctica, Australia, New Zealand and Japan.

“Our business plan for many decades achieved growth by expanding into new destinations and adding new trips in different parts of the world. Now that we have trips to 60 different countries and all seven continents, we’ve started to expand beyond the traditional tour model into other tour-related categories of travel that our guests have shown interest in,” noted Tauck.

Looking to the Future

How the escorted-tours industry will change as baby boomers move into retirement is a question on every tour operator’s mind.

“Over the next 25 years, 25 million baby boomers will be retiring,” said Tauck. “That’s why we anticipate a big growth in family travel, particularly multi-generation trips.”

Supernaw noted that the company expects retired baby boomers to fuel growth in travel to exotic destinations. The boomers are more well-traveled, and generally healthier and more adventurous, so they may have interest in places like Africa, India, Asia or Australia.

According to Tauck, the advent of the Internet changed travel agents’ jobs drastically. But as she pointed out, it has ultimately led to a stronger need for travel agents.

“Ironically, the Internet — which was initially viewed as a threat to agents — is now emerging as a real asset,” she said. “The huge glut of travel information available online is causing people to suffer from information overload. Every Web site claims it has the best deals, every hotel says it has the best location or the nicest rooms, every DMO, cruise line, resort and tour operator promises the best experiences. When there’s no way to make any sense of it all, it creates an opportunity for a skilled, knowledgeable travel agent.”

Supernaw further pointed out that the company works hard to support agency partners in a variety of ways. Tauck prints and distributes over 10 million copies of 25 different brochures, and maintains an aggressive direct-mail program. It has also increased prospecting efforts by 55 percent this year alone to reach new customers. All of the promotional materials have “contact your travel professional” as the primary call-to-action.

Additionally, Supernaw said that Tauck works closely with travel agents to do co-op mailings.

“If travel agents give us the names of their clients, we’ll put together brochures and promo pieces and tell consumers to go directly to that agent. It’s very effective in getting the agency names out there,” he said.

As far as the future of escorted tours, Robin Tauck remains confident that this area will continue to grow.

“I think the kinds of tours we’re seeing will change — they’re changing already — but I firmly believe that escorted travel will remain a viable option for as long as people take vacations. We may not see growing numbers of baby boomers on motorcoach tours of Nova Scotia in the next 20 years, but we will see them on escorted luxury tours at Angkor Wat, Machu Picchu and Luxor, or we’ll see them on upscale, small-ship cruises.”

Supernaw and Tauck both stress that agents should remember that converting a non-tour customer into a luxury-tour customer is worth their time and effort. The company pays agents commission on over 100 different standard trip components, including accommodations, meals, ground transportation and admission to attractions.

“An independent traveler is going to spend a lot of money on out-of-pocket expenses, and that will make zero contribution to an agent’s bottom line,” Tauck said. “Booking a guest on Tauck also means that you’re very likely to enjoy repeat business, since so many of our guests each year are return customers. Agents tell us all the time that ‘I only have to sell a client on Tauck once, and they keep coming back.’ ”