The hard-hit tour operator sector is creating opportunities for consolidation, as some savvy players will use travel's recovery to seek out acquisitions to fill significant gaps in their portfolios.
Australian-based tour operator Intrepid Travel announced on Wednesday that it’s buying Wildland Trekking, a U.S.-company specializing in small group hiking tours, in an attempt to make greater inroads in the lucrative North American market.
“We just see it as a fantastic opportunity for us to get more U.S. customers traveling and expose the Intrepid brand in an active and outdoor way,” said Intrepid CEO James Thornton.
Financial terms of the transaction were not disclosed.
Intrepid’s purchase of Wildland adds 260 trips to its North American portfolio. Prior to the move, Intrepid had offered only 57 tours in the U.S., roughly 5 percent of its 1,150 offerings worldwide. Its drive to expand its offerings in the U.S. comes when domestic travel is expected to surge in 2022 as 59 percent of U.S. respondents to a survey in Expedia’s 2022 Travel Trends Report said they were planning domestic-only trips for the new year.
“During the pandemic, we saw that people were more comfortable traveling closer to home, and that drove Intrepid to start developing more local and domestic travel products,” Thornton said, adding that his company wouldn’t have been able to significantly expand its product offerings by itself.
“To really build an outdoor and an active adventure portfolio of scale, we knew that we would need an expert like Wildland Trekking.”
Wildland co-founder Steve Cundy said Intrepid initiated the acquisition discussions, which his company was receptive to due to its recent difficulties. Struggles experienced by several tour operators worldwide have sparked numerous merger and acquisition deals worldwide.
“Covid was a big setback for us,” said Cundy, whose company typically welcomes 8,500 guests on its tours annually. “It was a setback financially because we lost our ability to put money determining our carbon footprint. We were in the middle of a carbon audit — we had to put that on pause.”
“We furloughed a number of employees. We just didn’t have the manpower and we were fighting for our survival frankly.”
But Cundy said that while other companies made initial plans to dismantle Wildland’s existing infrastructure and operations to some degree, he eventually developed the feeling that Intrepid valued his company’s niche products of small group hiking groups, popular destinations for which include the Rocky Mountains and the Grand Canyon. Roughly 97 percent of Wildland’s business last year came from the U.S., although Cundy believes that figure will drop to 85 percent in 2022.
“We’re going to continue the Wildland trekking brand in the short term,” Cundy said, adding while the company’s long-term goal is to put its offerings under the Intrepid brand, a timeframe for such a transition is dependent on how well he believes Intrepid can sell Wildland’s tours. Cundy maintained that Wildland’s executives — including his brother Scott, with whom he founded the country in 2005 — will continue to run the business.
So what’s the next step for the two companies? “We’ll be sitting down together and building our one, three, five year plans and that will take place in the months ahead,” Thornton said.
[UPDATE: The article was updated to include a modification of a quote Steve Cundy made about how Intrepid valued Wildland.]
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Photo credit: Outdoor activities will be featured more going forward in Intrepid's offerings Wildland Trekking