Luxury Travel Advisor November 2016 : Page 50

COVER STORY Marc Casto Creative disruption drives Casto Travel’s success. BY RUTHANNE TERRERO M 50 arc Casto, president and CEO of Casto Travel in San Jose, CA, is all about continuous rein-vention and discovery and his management style demonstrates just that. “At the beginning of the year, I host a break-away for all VPs and directors, where we knock out what’s working, what’s not working, and what needs to be fixed,” he tells Luxury Travel Advisor . To do this, the company will take over a local hotel, such as The Ritz-Carlton Half Moon Bay, Hotel Vitale or Cavallo Point. During the meetings, which range from team building to budget reviews (“You’ve got to mix up the fun with the boring,” says Casto), priorities for the year are determined. But that’s not the end of LUXURY TRAVEL ADVISOR | NOVEMBER 2016

COVER STORY

RUTHANNE TERRERO

Marc Casto

Creative disruption drives Casto Travel’s success.

Marc Casto, president and CEO of Casto Travel
in San Jose, CA, is all about continuous reinvention
and discovery and his management
style demonstrates just that.

“At the beginning of the year, I host a breakaway
for all VPs and directors, where we knock
out what’s working, what’s not working, and what needs to be fixed,”
he tells Luxury Travel Advisor. To do this, the company will take over a
local hotel, such as The Ritz-Carlton Half Moon Bay, Hotel Vitale or
Cavallo Point. During the meetings, which range from team building
to budget reviews (“You’ve got to mix up the fun with the boring,” says
Casto), priorities for the year are determined. But that’s not the end of it. Casto also gathers senior managers monthly
to review the progress of those projects to see if
they’re hitting their goals.

One might suspect this keen focus on
process and measurement derives from
Casto’s background in accounting, but he
attributes it more to the location of his $150
million travel business.

“Casto Travel started in the Silicon Valley,
and the overriding principle of Silicon Valley is
creative disruption,” says Casto. “We believe,
and maybe it’s in the water around here, that
we need to constantly find ways to creatively
destroy our company and build it up new. Just
because our company has been around for 42
years doesn’t mean it deserves to be around for
43, unless we can continue to provide better
value than we did the year beforehand.”

And indeed, in 2016, the agency, whose
business mix is 75 percent corporate and 20
percent vacation (the remaining 5 percent
is visa and passport processing), has barreled
through some big changes: It’s been
significantly growing its corporate accounts;
increasing its marketing efforts for the Casto
Vacations brand, largely due to its recent
move to the Signature Travel Network; and
has expanded the facilities in its Manila,
Philippines, office.

“If you talk to pretty much anybody here
at Casto, they would say that we’re constantly
hopping. We’re constantly moving,” says Casto.

That Silicon Valley location delivers
more than just the inspiration to reinvent;
it’s the source of a population that generates
a tremendous amount of corporate and
leisure travel. On the travel management
side, Casto works closely with many of the
venture capital and private equity firms in
the area; that’s the source of a majority of its
$150 million in annual sales.

There is also plenty of leisure business to
be had from those who live in the area. For
example, Casto has a walk-in travel agency
in Tiburon, a very affluent community north
of San Francisco, where many who work in
Silicon Valley reside. It’s also a hotspot for
ultra-affluent retirees. “Tiburon’s average
household income and shopping demographics
are about as ideal a community as
one could hope for,” says Casto. “It’s an area
where at least once a year, we’ll have somebody
walk in and buy a $150,000 cruise
package for their family.”

Casto Vacations is actually based in the
company’s San Francisco office, managed by
Fabio Castellotto, who works closely with a
mix of employees and independent contractors
to grow their business.

“The majority of our leisure clients are
interested in custom FITs, bespoke programs
and independent travel…though we certainly
do have our fair share of cruises and packages,”
says Casto. The vacation team this year
has been focusing on developing custom marketing
programs, direct client campaigns via
Signature, and has made a big push on social
media. With those efforts came the relaunch
of CastoVacations.com, targeted web ad buys
on Yelp and Facebook and the launch of an
Instagram campaign.

Casto recently joined Signature Travel
Network, switching from Virtuoso. “One key
factor in our selection of Signature as a consortium
is their consistent focus on measuring
marketing results,” says Casto. “Sending thousands
of e-mails out to potential clients is a
good way to get listed as a spammer. Targeting
the right offer to the right client at the right
time is the optimum way to demonstrate
value. With Signature, we aim to achieve this.”

Of Virtuoso, Casto says, “I think that they
are positioning themselves for tremendous
success; they represent their usage base in
an extraordinary fashion. It’s just that where
they were going and where we want to go
were somewhat different paths. The marketing
programs that Signature has put in place
are more aligned with what we’re seeking
for our vacation clientele. We’re getting very
heavy in, for example, AB testing segments
of populations and much more detailed data
analytics associated with the marketing programs.
We thought that would be more easily
available through Signature.”

Training Module

To keep its vacation advisors ready for any type
of over-the-top trip request, Casto has a very
specific training path called the Professional
Development Program, or PDP. Through it,
Casto, who hates the term “fam trip,” funds
travel for his vacation agents. The level of
funding depends on the amount of revenue the
person brings in and on their experience level.

For example, if someone is new to the
industry and just beginning to generate revenue,
Casto will fund a certain amount of their
travel and will likely send them to Mexico or
Hawaii, the agency’s top destinations.

If that advisor develops and shows more
capability, they’ll have more latitude about where to travel, but will still be steered
toward the key markets Casto sells, such as
France and Italy. As that advisor’s revenue
continues to grow, they can request funding
for specific destinations. “They need to create
a plan around it and we approve it or not,”
says Casto. “Then they’re off and running.”

PDP travel must be written up and
shared with the rest of the team and it will
be considered for the Casto website blog for
all the world to see. Recent blog entries from
luxury travel advisors include dispatches from
Maureen Murphy, who traveled to Namibia;
Earl Davis, who ventured to China with
Abercrombie & Kent; and Donna Dyer, who
spent two weeks exploring Australia.

Casto himself is an avid traveler; he grew
up in the business, which was founded by his
mother, Maryles Casto, who is now chairman
of the board. In fact, he says his earliest
memory ever is the gift of an airplane from
family friends when he was just a baby lying
in a crib. “It was the kind you wind up and
moves on wheels. It was a Pan Am. I cherished
that toy and remember it clearly,” says
Casto. “To this day, I still feel like a kid every
time I get on a plane. The promise of a new
destination, the marvel of engineering, and
the thrill of a new culture still excite me.”

‘Aha’ Moment

Marc Casto didn’t join the family travel business
right away, however; instead he worked
at an accounting firm for five years. All was
going well, in fact, he was on the path to
management. But in 1999, he had an “aha”
moment.

“It honestly came down to one night over
Christmas time,” Casto recalls. “I started my
night at the Casto Christmas party; because
it’s a family company we would always come
to it no matter what. There, I was having
conversations about hotels, airlines providing
service to new markets and where we would
go if we had an unlimited budget.

“Then I jog over to the accounting company
Christmas party and we’re talking about
the upcoming tax regulations and what the
audit provisions are that we need to know
about for next year,” says Casto. This was shop
talk of two very different natures and Casto
knew which he preferred. “Do I want to talk
about auditing or do I want to talk about
Australia? I knew what I wanted,” he says.

And so he signed a contract with his
mother to work at Casto Travel, but since
he was unmarried at the time, he took a few
months off to travel.

“The plan was to start in London and see
how far away I could get making the least
amount of flights as I possibly could,” says
Casto. “When I ran out of money in Kenya,
I realized it was probably time for me to
head home.”

Being in Kenya low on cash meant staying
in places that charged $1 per night, $2 for
access to a communal shower. But still, Casto
says he had a wonderful time. “We enjoy
travel because of the people we meet, those
we would never come across otherwise.”

Back home, he joined Casto Travel, which was growing rapidly. He started in accounting
and was immediately tasked with going
to a meeting to finalize the purchase of a new
agency. It all seemed simple enough; he just
had to sign the final documents. There was
just one problem; at the meeting, the other
agency’s attorney announced he wanted to
completely renegotiate the deal. Casto didn’t
go for it and advised his mother that they
shouldn’t proceed with the purchase. He was
worried he’d get fired immediately from his
new job, but she gave him the green light
to pull out. The deal eventually came back
together with everyone agreeing on terms;
the principals today are still with Casto. That
purchase was followed by four more acquisitions
in rapid succession, from leisure and
corporate firms to tour and meetings.

Casto recalls that first deal as a dynamic
experience. “In that moment of decision and
indecision, I was hooked,” says Casto, who
continued to learn the business by moving
around departments, filing ARC statements,
overseeing account management, finance and
corporate sales. When his uncle, Gus Vallejo,
who was also part of Casto Travel, relocated to
the Philippines to oversee the agency’s business
there, Marc Casto became CFO and COO of
the company.

Expanding that Philippines office was an
early example of “creative disruption” for the
business. Casto Travel had owned and operated
a traditional travel management company
in that market since 1996; his mother’s
family hails from the Philippines. Owning a
business there at first provided a great opportunity
to go visit family, but after 9/11 and
the dot-com crisis hit, the Philippines office
served up the chance to move some key Casto
Travel back-office services to that locale.

Since then, it’s grown the Manila business
from a handful of agents providing mostly
“after hours” services to a variety of business
solutions, including ARC fulfillment,
accounting, online booking tool fulfillment,
ticketing desks, account management and
sales support. Casto Travel uses these services,
of course, but so do other agencies.

“The decision to offer these services to
those firms that are by definition our competitors
is one I’ve been particularly proud of,” says
Casto. “There’s ample opportunity for each of
us to benefit through the use of these shared
resources and specialization of skills.”

It’s been 16 years since that London to
Kenya trip; Casto is married and has two
little girls; the family travels together as
much as possible. But Casto, who has now
been to 60 countries, has plans to see more;
his goal is to get to 100 countries in the next
10 years. High on the list are Cambodia,
Vietnam and Thailand. Australia and New
Zealand are also must-sees.

But while curiosity has spurred him to see
the world, Casto has made it a point to help
strengthen the travel industry back here at
home. He just concluded a seven-year stint
on the board of ASTA, an organization he is
particularly proud of these days.

“When I joined the ASTA board six years
ago, I found an organization in continual
turmoil among its members, lacking in clear
direction from management, and extraordinarily
shaky financials,” says Casto. “There
was no clear agreement on the value proposition
or whom ASTA was designed to serve.
The only positive area was an exceptional
staff with tremendous ability and passion for
the cause, though understandably morale
was poor. Over those six years the organization
has truly been a phoenix emerging
from the flames of its own self-immolation.
New — and highly effective, I might add —
management has joined; the financials are
solid with multiple years of profit; and the
board is supportive and cooperative. Most
importantly, the staff of ASTA consistently
produces exceptional content for our mission
of promotion of the industry and aggressive
advocacy in the political realm.”

Casto, who is the outgoing chair of
ASTA’s Corporate Advisory Council, was just
awarded the first-ever ASTA Paul M. Ruden
Award, given in honor of ASTA’s former
executive vice president, legal and industry
affairs, who retired in September of last year
after more than 25 years on the ASTA staff.

“Over the last few years Paul and I have
worked closely at ASTA and I have come
to appreciate his brilliance and savvy — for
which he is legendary — as well as his civility
and honor. If ever there was a Renaissance
man alive, it would be Paul,” says Casto.

True to his business credo, Casto is
pondering still more creative disruption for
the business for 2017. He’ll hold an annual
meeting with his U.S. staff in San Jose to give
everyone a look at the entire business. Last
year, more than 80 people attended and all
groups and departments were tasked with
presenting their services, their clients, and
their operations. At the end of the presentations,
there was a team “Family Feud,” with
answers based around what was learned
during the day. “All too easily we can get lost
in our own silo and forget that a company
requires the continual action of multiple
teams for its success,” says Casto.

But this CEO also has an eye to the
future, curious about what new technology
will bring. He’s already had the chance to sit
in automated cars driving down the highway
and is convinced that artificial intelligence
and software-based robotics could significantly
enhance the travel experience. “If two
tons of car can be automated to navigate
commuter traffic with a significantly
reduced error rate than human drivers, then
surely it’s possible for it to be applied to
improve travel services,” says Casto.

He says that what companies like Pana,
Lola and Expedia are promising is the ability
to predict traveler requests and to then communicate
proactively with solutions. “The
easy next step is to enable that communication
with all suppliers, bi-directionally. This
[would] allow our team to be free of focusing
on data entry, for example, for the GDS and
CRM, and spend more time with client and
supplier relationship management.”

If artificial intelligence alters the travel
industry landscape, it will be just one of the
many things that Casto has experienced.

“In the last 15 years that I’ve been at Casto
Travel, we’ve witnessed a complete change in
our distribution model, an upheaval in the
economic order, and a wholesale change in
our interaction with clients,” he says. “I believe
that was but a trial run for what the next five
years have to offer. Change rapidly approaches;
those that encourage it will prosper.”

2016 TECHNOLOGY
DEVELOPMENTS FOR
CASTO TRAVEL



Added Slack and Trello for internal
communication and project
management



Upgraded to Sabre Profiles for all offices



A “massive” investment in network
IT operations for security and further
redundancy



Converted 100 percent of Casto
Vacations itineraries to Axus for
mobile management



Launched Instagram.com/castotravel


Launched facebook.com/castotravel

Read the full article at http://www.luxurytraveldigital.com/article/COVER+STORY/2623687/350030/article.html.

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