Up Close With Marc Casto of Casto Travel

Marc Casto, president and CEO of Casto Travel.

 

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.

Casto Travel, Inc.

Headquarters: San Jose, CA

Founder: Maryles Casto

President and CEO: Marc Casto

President, Casto Travel Philippines: Gus Vallejo

Number of advisors: 250 employees worldwide, 15 ICs

Annual sales: $150 million

Business Mix: 75% corporate, 20% vacations, and 5% visa / passport processing.

Affiliations: Signature, ASTA, CBTG, Frosch

Advisory board positions: Travel & Leisure Business Travel Advisory Board, Sofitel Advisory Board

Agency website: www.casto.com, www.casto.com.ph

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.

Pictured: A Prestigious Honor: Marc Casto, was just awarded the first-ever ASTA Paul M. Ruden Award, which honors Ruden, ASTA’s former EVP of legal and industry affairs. Jennifer Wilson Buttigieg, co-president of Valerie Wilson Travel.

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.

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

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.”

Pictured: The Great Outdoors: Marc Casto and his wife, Julie, a portrait artist, enjoy a skiing trip in Squaw Valley.

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.”

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