Personal Finance

Looking to 2021, guided vacation company Trafalgar pivots to new pandemic normal to spur bookings

Key Points
  • Given rising infection rates and reopening slowdowns at home, as well as borders closed to Americans abroad, travel providers like Trafalgar are pivoting as best they can to meet the new normal.
  • Traveler worries have led to new safety protocols, generous re-booking policies and the debut of new "well-being directors" on tours.
  • Trafalgar President Melissa da Silva says prices will rise 10% at the Cypress, California-based firm to cover health-related improvements.
Melissa da Silva, president of guided vacation companies Trafalgar, Brendan Vacations and Costsaver, divisions of Cypress, California-based The Travel Corporation.
Trafalgar/The Travel Corporation

One of the biggest disappointments of the pandemic lockdown of 2020 — and there are many — has to be the eagerly awaited vacations and getaways that millions of Americans have been forced to postpone or cancel as travel and tourism shut down across to globe to stem the spread of Covid-19.

It's been a body blow not only to would-be vacationers but to workers across the industry who've been laid off, furloughed or just plain fired. Travel providers, understandably, are eager to get back on track and look ahead — even as infection rates continue to rise in some parts of the U.S. and most international borders effectively remain shut to Americans.

Travelers, too, want to get back on the road — with some reservations. Online booking platform Qtrip.com found in a survey that while more than 34% of Americans queried plan to start traveling again this summer, 61% will holiday on a tighter budget and nearly 69% are worried about health risks while traveling.

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What does that mean for big tour operators and other travel providers? CNBC.com turned to Melissa da Silva, president of guided vacation companies Trafalgar, Brendan Vacations and Costsaver — all divisions of Cypress, California-based The Travel Corporation, which operates 42 travel brands — to see how she sees things playing out and how Trafalgar and its sister companies are responding.

CNBC: What's the situation at Trafalgar right now?

Melissa da Silva: Right now, our focus is on 2021 and helping people plan for that. There's not a lot that we can plan on for 2020. With borders being closed, it makes it very difficult. There are also concerns domestically about [infection] spikes and state governors or local cities and towns rolling back some re-openings. We are also looking at all of our health and hygiene protocols — just to make sure that, when we are back out on the road, we're doing it in a way that brings comfort to our guests and makes them feel it's a good time to start traveling again and we're not going to put them in harm's way.

CNBC: What do those protocols look like? Are you harmonizing your policies with partner providers?

MdS: We're reviewing everything top to bottom, from pre-trip to on-trip. We're not even sending out customer documents anymore, as we're trying to make everything touchless. We're reviewing every single hotel partner globally, going through their protocols, as well as all of our dining partners and the attractions we visit. We're trying to understand everything they're doing, ensuring that it's all in line with whatever the World Health Organization, Centers for Disease Control or local governments are mandating.

I think that's one of the huge benefits of traveling with a company like Trafalgar Tours, or any guided vacation company, for that matter. We're doing all of the heavy lifting and taking the guesswork out of it so that guests can really just enjoy their vacation. The No. 1 question that we're hearing is: "Is it still going to be fun to travel? Am I still going to have a good time if I'm traveling in the confines of this new normal?" We're trying to ensure that our guests can have an amazing travel experience while letting us take care of all the logistical legwork.

CNBC: Recent surveys have found Americans are opting for road trips by private car over other types of travel and transportation. Is Trafalgar adapting to this preference with domestic and foreign itineraries?

MdS: On both the domestic and international fronts for the first quarter of next year, we have introduced new private tour options. Guests traveling with friends and family in what's called a "travel bubble" will have the opportunity to take one of our existing trips and make it exclusive. They'll still get the benefit of traveling with a travel director able to give them all the access to hidden gems and insights into and explanations of the history and culture behind it all — but on their exclusive private departure.

Trafalgar's seven-day San Diego, Palm Springs and Orange Country Beaches tour, priced from $2,295, meets demand for wide-open spaces with a Joshua Tree National Park stop.
Jordan Siemens/Getty Images

It's a test we're doing and, provided it goes well, I definitely see it staying a part of our portfolio long-term. What we've also done is create more domestic product that's a little bit shorter. We already have a robust domestic program but we've added more shorter itineraries focused on wide, open spaces, and getting out to national parks.

For example, people in Southern California might want to do a road trip. We've put together a fantastic San Diego, Palm Springs and Orange County Beaches itinerary that goes even deeper [into the region]. Rather than just doing the trip on your own using Google Maps, we're taking you to see culturally rich experiences so that you can have a really rewarding vacation without going very far from home.

Domestic has always been a big part of what we do at Trafalgar, but its share now has almost doubled. For people who don't necessarily want to get on a plane for 12 hours, it's been a great pivot for them to say "OK, I couldn't go to Europe this year so maybe I'll do a domestic trip."

CNBC: But what about in Europe and other overseas destinations, once they do open back up to us?

MdS: In terms of demand for 2021, people are looking for green, wide-open spaces everywhere. So, Ireland is hugely popular. What is perhaps surprising is that Italy is still our No. 1 searched trip right now. It's always been where people want to go in Europe and, despite what happened there at the beginning of this year, travelers are very anxious to get back. I think Italy has done a good job of proving they were able to control coronavirus.

One in 10 jobs in the world is in tourism ... It's critical to us that we are supporting the small businesses that support us year-round.
Melissa da Silva
president of Trafalgar

CNBC: Given all the unknowns, what's Trafalgar doing to help potential travelers book with more confidence?

MdS: I don't think anyone's going to be inspired to travel until they know that their health and well-being has been taken into consideration. One of the most exciting initiatives we've launched is our well-being directors. For any departure that has 20 people or more, we have included a third [staffer] to the trip. You've always had a director and a driver; we've now added a well-being director.

That person is there solely to ensure the places we visit are following protocols and we're making it all as seamless as possible. They're there to answer queries from guests on the trip, if they have any sort of concerns. I think that's huge, and I believe [The Travel Corporation] is the only [company] ... in the industry ... that's currently doing that.

The second thing we're doing to instill confidence is that we've really reviewed all of the change policies we've created. Our $99 deposit policy makes it just a little bit easier to commit to something but the change policy, that's on any trip that someone's booked, regardless of whether they've taken advantage of the $99 deposit or not. They can make changes to their trip up to 30 days before their departure with no penalties.

They can change to a different day, or to a completely different trip on a different continent. To be honest, they can change to any one of our other sister brands within The Travel Corporation family. It's as flexible as we can possible make it for customers, so they can make plans now and, if the world does shift a little bit, they can change their mind later.

Trafalgar is noting interest in green, wide-open spaces such as Ireland from travelers. Pictured, Ireland's Glendalough Valley.
Anna Gorin/Getty Images

CNBC: What about pricing? Are you discounting?

MdS: We have been successful in negotiating with many of our suppliers. However, they, too, are incurring additional costs in order to maintain proper hygiene and distancing protocols. The result is we are seeing an approximate increase in fares of 10%. Our guests have been very understanding because these steps give them peace of mind, knowing that when they travel with us, they can simply enjoy their trip and let us take care of the logistics.

CNBC: Are you offering clients Covid-19-related travel and/or medical insurance?

MdS: We absolutely do work with our guests on travel insurance. We are in the midst of reviewing our partner for insurance moving into 2021 to make sure we do have the most robust Covid-19 coverage. We do not mandate that clients buy insurance from us, but they do need to have coverage in order to travel in 2021. It's just such an uncertain time and we do not want anybody to somehow be caught off guard without appropriate coverage if something should happen.

CNBC: I understand Trafalgar is extending help to impacted travel partners and including areas that may need help on itineraries.

MdS: We've actually been doing for at least the last 10 years. We want to make sure that we're having a positive impact on the places we're visiting. Whether it's local artisans, farms that we visit or the wider local economies, it's important to us that travel is a force for good.

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One in 10 jobs in the world is in tourism, and we are one of the industries that's been hardest hit by this pandemic. It's critical to us that we are supporting the small businesses that support us year-round. We're also keeping this in mind domestically. For example, in our Southwest Native Trails tour, we're going into Native American reservations and working with local guides and learning about what their way of life is, historically and today, so that our guests can get a greater cultural understanding of what's happening even in their own backyard. And it puts money back into the local economy, which we think is so important.

CNBC: Do you think those sort of existing connections and established efforts at sustainability and positive social impact will help Trafalgar and other travel companies rebound after the pandemic?

MdS: Absolutely. I think it's really just going to be a matter of how long this goes on. I have been talking to some of my colleagues in, for example, Ireland. There are 50,000 small businesses in Ireland that are dependent on tourism and if we go a lot longer, those businesses are going to be in jeopardy. So we really need to find a way to continue to support them and I think that will be key for us as we go back into the market.

CNBC: Realistically, when do you see Trafalgar's business taking off again? Some promo materials I've seen refer to late 2020.

MdS: We're really just laser-focused, at this stage, on 2021. We're hopeful there's going to be a strong rebound. But I think we're going to have to pivot a little bit and, as people re-emerge into travel, it may look a little different — but I think we're poised to do that. When I say late 2020, the earliest we're really talking about is Christmastime. I think the first trip I think we'd consider operating at this stage would be, say, Christmas markets in Europe. But I think we're certainly talking 2021 for strong international travel.

Correction: Customers of guided vacation company Trafalgar, a brand of The Travel Corporation, may make itinerary changes within 30 days of departure. In addition, all brands operated by The Travel Corporation offer new well-being director services. An earlier version misstated the number of days and the brands offering new well-being director services.