Steve Perillo, president and owner of Perillo Tours, is currently at the helm of a third-generation family business that was launched in 1945. Perillo has successfully built upon the legacy that his father and grandfather established and continues to take his business to new heights by leveraging the rising generation. Here Perillo shares the family’s journey and gives an insider’s view into how the family business operates today.
Can you share the story of the Perillo family that led to the launch of the business that we know today?
During the “great arrival” between 1880 and 1920, 25 million foreigners arrived on American shores, including 4 million Italians. Joseph Perillo arrived in New York in 1924 with a law degree from Naples University. He got a bank job in Brooklyn and sent for his wife and child two years later. Given his education, in 1945 he opened a travel/insurance/real estate/legal affairs office near Arthur Avenue in the Bronx.
Three of Joseph’s four sons became lawyers and initially worked at Joseph Perillo & Sons. However, Mario and Robert [Bob] eventually inherited the business and ran the company as partners until 1978. They were pioneers in the travel industry, introducing the first charter flights and all-inclusive tours to Italy as early as 1969. Their successful collaboration lasted for 30 years. After their partnership, Bob established his own wholesale travel business in Manhattan, while Mario relocated to Pearl River and rebranded the company.
European group tours are a natural choice for an older generation, who are no longer willing to hoist their heavy luggage onto the wrong train car. As the World War II generation receded in the 2000s, everyone wondered if their more sophisticated baby boomer kids would also “age into group bus tours” — and they did.
This age group wants to be chauffeured to preplanned experiences and beautiful accommodations. But to travel like this privately costs over $1,000 a day per person. A Perillo group tour costs under $500 a day per person.
Family businesses constantly have to balance maintaining the character of the business while expanding into new markets. How do you navigate this?
When a business stumbles onto a hit product, the first idea is to keep selling that same exact product but to a lot more people, because if 1,000 people like it, why shouldn’t 10,000 or 100,000 people like it, too?
The challenge is that marketing your standout product to a wider audience costs a lot of money. Instead, it may be cheaper to sell a new product to your original 1,000 buyers. After all, they’re already satisfied customers, and it costs almost nothing to market to them.
But alas, hit products are rare, and odds are that your new product will not be the same hit as the original. The lesson here, as always, is the middle way. You need to always increase exposure to your main product while always testing new products in search of your next hit.
So, we can sell one trip to 20,000 people or two trips to 10,000 people or four trips to 5,000. “To diversify or not” is one of the most common topics in the Harvard Business Review for this very reason.
Today, Perillo Tours fights to keep its Italy travel dominance while testing new destinations all the time — like Hawaii, Spain and Greece. Some destinations work better than others, and all this “destination testing” gives new experiences to Perillo alumni who were impressed with Italy.
How is the family business currently structured?
For estate planning and for liability protection, Perillo Tours is held in a trust. I currently head the company as CEO with a new COO hire, Keith Baron. My nephew Devin Buonanno [who is 29] is looking forward to representing the fourth generation running the company.
How does your family approach succession planning?
Someone almost convinced me that monarchies are the best form of government because they can last for over 1,000 years. Meanwhile, America is the oldest democracy at only 250 years. A trust is like that monarchy. Employees and family members come and go. Disputes can rage. But the trust is always above it all, calmly protecting against customer lawsuits, conniving family members or mutiny in the ranks.
When you look to the next gen rising, how do you see the family’s legacy continuing?
My nephew Devin Buonanno is looking forward to continuing the Perillo legacy. Apprentice tour operators are usually given a single destination to control. Devin runs Perillo’s Hawaii tours, which since the 1990s has been the company’s second-largest destination. Being on-site to meet and work with the guests directly is probably the single most important experience to have. After all, the customers really run the business and vote with their dollars.
In terms of your core focus on Italy, can you tell us the future of travel there, given the incredible demand to travel to the region?
America’s love affair with Italy is only surpassed by the Italians’ love for Americans. When you have that warm feeling underlying the fantastic climate, art, food, wine, music, fashion and history, it supercharges the destination.
Meanwhile, the crowds have become the one major challenge for this perfect tourist destination. Tour companies prebuy tickets, so there are few to no lines. But others can wait three hours to enter St. Peter’s in Rome — a church you would have simply strolled into 20 years ago.
Two solutions available right now are to visit Italy in the off-peak winter months or to visit the 100 other medieval villages with the same great food, art and people minus the crowds. The good news is travelers are now more actively seeking hidden gems and off-the-beaten-path locations in Italy, like Matera and Tropea.
Visiting Matera in southern Italy, you’ll feel like you stepped into the actual Nativity scene. Known as the second Bethlehem, it’s no wonder Mel Gibson chose to film “Passion of the Christ” in Matera. And with its cave dwellings called “Sassi,” this historic city is like none other in the world.
Tropea lies along la Costa degli Dei [Coast of the Gods] in Calabria. Voted one of Italy’s most beautiful villages, this is a popular destination among Italians and Europeans that is surprisingly unknown to Americans. It’s set atop stunning cliffs, overlooking sandy beaches with clear, turquoise water. Tropea is just as gorgeous as the Amalfi Coast, but a lot cheaper.
Beyond the culture wars: The real value of ESG
By SAMUEL ADAMS
If you read anything about ESG in 2023, you probably were reading about a political debate. From the volume of articles on the debate, it might seem as if the movement to sustainable investing is a political one. This is false.
There is nothing inherently political in nature about ESG. When defined correctly, it is just a term to describe data on companies that might not be included in their standard financial reporting. But the term ESG is rarely used correctly anymore. It has been caught up in the culture wars and used on both sides of the political spectrum to stoke animus.
ESG as the bogeyman
Much of the blame for these anti-ESG attacks belongs to our hyperpartisan political system. Some politicians in the U.S. are fueling the culture wars by calling out ESG as the bogeyman. Agitators on the right claim that ESG is an attempt to force companies to adopt the far left’s progressive, liberal and "woke" agenda. And they claim that, if left unchecked, ESG will limit corporate profits and leave America without enough energy resources. And from the left we hear that ESG is just a dangerous distraction, akin to rearranging the deck chairs on the Titanic. These pundits seem to believe the profit motive will always lead to bad outcomes, so stronger regulation is needed to curb capitalism’s destructive ways.
It is easy to criticize ESG. It is a relatively new investment discipline — the term was only coined in 2005. It is neither the distraction nor the bogeyman that it has been made out to be.
But the investment management industry is at fault as well. As interest in sustainable investing has grown, fund managers have too often chosen terminology for marketing reasons rather than for accuracy. This lack of discipline in the use of terms for sustainable investing has created confusion about what ESG actually is and what it isn’t.
The difference between ESG and SRI
There are forms of values-based investing where you can push a political agenda, but that isn't ESG or environmental, social and governance. That is SRI or socially responsible investing. SRI investors have historically divested from companies they don’t like and invested in those they do. Some SRI investors shun guns, others embrace them. Some SRI funds avoid so-called "sin stocks" like alcohol and tobacco, but other funds are explicitly investing in these firms. SRI is customized to whatever the investor wants, so it can be conservative or progressive or religious or deeply personal.
Unfortunately, ESG has become a catchall term for all forms of values-based investing. This lazy and inaccurate definition creates confusion for investors and leaves an opening for attacks from all sides.
A more accurate description of ESG would help both investors and politicians understand it better. ESG is an investment process that examines the risks to companies arising from their environmental footprints, their social impacts and their governance practices. ESG data can illuminate which firms pollute more, which have labor issues and which have inadequate risk controls. This is why more of the largest investors around the world are embracing ESG:·
- 12 of the 15 largest pension funds in the world employ ESG.
- 75% of sovereign wealth funds use ESG.
- 47% of central banks integrate ESG.
It is difficult to see how these large institutional investors could be investing with a political agenda. After all, they are investing on behalf of millions of investors who have a myriad of different values. They are not excluding coal companies or reducing their portfolio’s carbon footprint to be politically correct. They are doing it to reduce risk.
Focusing on materiality
These investors are hungry for any additional information that helps them better assess risk. More data and more transparency help markets digest and price risk more accurately. You need not be a sustainable investor to want this information — even conventional investors want a fuller risk picture.
Recognizing this, the Securities and Exchange Commission will soon publish guidance on new climate-risk disclosure requirements for public companies. The proposed rules are expected to require companies to report their greenhouse-gas emissions and exposure to climate risk. Climate-change risk is real and therefore a concern for all investors, whether sustainably minded or not.
ESG is a term that should remain focused on material issues. The issues that are material can alter the financial status of the company in the near term or are of such pressing concern to the community that they could affect the finances of that company longer term. If an issue is more about politics than profits — like abortion and gender pronouns — it is an SRI issue and not often material. Individuals can choose to invest with ESG and/or SRI in mind. It is their personal money. Public funds, on the other hand, like government pension plans and city treasury departments, should potentially consider ESG and stay away from SRI.
The political rhetoric is overheated enough. It doesn’t need more fuel to burn, and we would be wise to keep investment strategies out of the fire. We certainly don’t want politicians deciding how we should invest.