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We are featuring regular reports several times per month from Beijing, Singapore, and Cape Town, and look for us to add other cities soon. Gateway Singapore, for example, signifies that the reporter is writing from that city although her coverage of the business of travel will meander to other locales in the region. Read about the series here, and check out all the stories in the series here.
After calling off its four-year marriage to TUI Group, Intrepid Group aims to triple revenue to $1 billion within the next five to 10 years and plans on making a string of acquisitions.
Adventure, sustainable, experiential travel – call it what you like – is booming. There are new sources such as Chinese travellers who are no longer content with sightseeing. Intrepid Group’s new adventure cruising product, launched in November, shows potential. The company is acquiring more adventure specialist inbound agencies in countries from Japan to Panama.
The marriage with TUI was one big adventure for probably the world’s largest adventure travel company, which carries more than 250,000 passengers a year. The companies’ values and styles were different.
In the past 18 months since it bought back its shares, Intrepid Group has worked on “a return to stability and our philosophy of purpose beyond profit,” says co-founder Darrell Wade, who is now executive chairman and is driving the new ambition.
Wade handed the reins of CEO of Intrepid Group to longtime CEO of Intrepid Travel, James Thornton, in March. His other co-founder, Geoff Manchester, heads Intrepid Foundation.
NOT REALLY A MATCH MADE IN HEAVEN
“Being a FTSE 100 company, TUI tends to be fairly risk averse and looks for short-term results as it has analysts to please. We on the other hand tend to embrace risks, traditionally take a long-term view, and have a greater focus on sustainability, which sometimes brings in costs that would not otherwise be there,” says Wade, interviewed on the sidelines of the World Travel & Tourism Council Summit in Bangkok two weeks ago.
“But there is no doubt we’ve learnt good lessons in terms of managing the company more professionally. TUI has great skills in analyzing performances, handling problems and issues, and has a rigorous approach to governance.
“The break-up, if you call it that, was amicable. We came out bigger and stronger.”
When Australia-based Intrepid Group joined TUI in 2011, Intrepid Group was raking in $100 million in revenue per year, says Wade. Upon exit, that figure grew to $300 million annually as the deal brought in more clients and brands.
The portfolio now includes Intrepid Travel, Geckos Adventure, Peregrine Adventures, Adventure Tours Australia, Urban Adventures and The Family Adventure Co.
The Group also owns 20 adventure specialist inbound agencies throughout Asia, South America, Africa and Europe. These companies operate independently under the umbrella of Peak, a destination management company which handles not just clients from Intrepid brands but those from other operators.
Peak is a thriving business that contributes half of Intrepid Group’s revenues. Wade plans on acquiring a few more of these specialists in key countries where it does not yet have such a presence. Five acquisitions will be made this year, in Japan, Mexico, Costa Rica, Panama and Iceland, and another five next year in Indonesia, Brazil and three others to be determined, he says.
“We’ve not done any acquisitions since leaving TUI but we will definitely do so in the next six months,” says Wade.
“We see our future as a $1 billion company in terms of sales. We hope to do that in five years but may be we will get there in less than five, or in 10 years, who knows. We’re currently experiencing a 28 per cent growth year-on-year as a group; it wasn’t as high during the TUI years. We think we’ll continue with this growth for awhile.”
IN THE RIGHT PLACE AT THE RIGHT TIME
Wade says that’s because “the market continues to come more and more our way.”
“Hotels, even airlines, are talking about delivering an experience. Airbnb is shouting what a holiday should be, what going local is, it’s terrific to have someone say all the things we’ve been doing for a long time. We’ve got 25 years of history on the ground in delivering experiential travel and that track record is coming to the fore. We’re in the right place at the right time,” says Wade.
For instance, Intrepid Group, which normally handles small groups of 10-15 people, is launching programmes for individual travellers in the next few months as a third-party U.S. firm with “a very large database” has approached it for these custom-made trips for its clients.
China is another area where the timing is right, he says.
“There was no way we could play in the market five to 10 years ago, as the Chinese market then was all group, conventional, and extremely price-driven. Now they are far more independent, definitely looking for higher quality — not in the sense of super expensive but they just don’t want shopping; they are just so curious. And it changed so quickly,” says Wade.
There are countless reports that point to this. The latest, released by Sabre earlier this month, shows Chinese travellers are no longer satisfied with traditional sightseeing. Nine per cent look for an adventure, while 17 per cent seek better understanding of foreign cultures, the report says.
A majority (74 per cent) are willing to spend time and energy on planning their trip but they need the support of travel providers to determine what is relevant for them, the survey found.
Wade believes this is why Intrepid can thrive in the market. “There is a lot of information in what they can do but not, ‘how do I make it happen?’ If you put their curiosity together with someone who can show them how to do it, someone they can trust, there’s a real opportunity. Being a Western brand is useful. Travellers, rightly or wrongly, sometimes see the Western brand as better,” says Wade.
Wade says he wants to create a joint venture in China and is “having conversations with two or three people.”
“This may take a year or so to develop. As we’re in this for the long run, we want to find the right partner. In China, it’s all about relationships, plus it’s important they understand our concept,” he says.
ADVENTURE CRUISING TAKES OFF
From the initial uptake of Intrepid Group’s new adventure cruise product, Wade believes there is potential for small, 50-person ships that can pull right into towns, and offer more immersive and authentic programs at affordable prices.
Such as scenario works with a partner in Greece, which provides 10 small ships and these are now cruising in Greece, Croatia, France, Iceland, Cuba, Costa Rica and the Seychelles. “We hope that the partnership will go further,” says Wade.
“A lot of people don’t want to go on big cruise ships. Again it ties in to their desire to go far more local. And while there are the Silverseas and Expeditions, they are rather five star.”