Report from 2015 Adventure Travel World Summit, Puerto Varas, Chile

By Dan Moore, CEO Pandion Consulting & Facilitation

The Adventure Travel Trade Association, an industry trade group headquartered in Washington State, held its annual Adventure Travel World Summit in Puerto Varas, Chile, October 5-9 2015. This is the organization’s 12th Summit, including the first two which were in Washington State, and was the 8th that I have attended. The sold out summit included over 700 delegates from 55 different countries. Delegates included outbound tour operators such as National Geographic Adventure and REI Adventures, inbound suppliers including Seattle’s own Evergreen Escapes, and some of the best-respected travel media such as Outside Magazine, Travel Weekly, and National Geographic.

 

The theme for this year’s Summit was “Viva la Revolución de la Aventura”. This theme relates to two aspects of the Adventure Travel industry. One, acknowledging the trend that Adventure Travel is one of the fastest growing sectors of the travel industry (growing from $89 Billion in 2010 to $263 billion in 2013*; 4 and 10 travelers choosing adventure*). And two, the efforts made by this industry to address issues of social and environmental sustainability – big challenges for the travel industry.

 

Speakers included the President of Chile, Michelle Bachelet, celebrity chef Rodolfo Guzman, Canadian Ambassador Tim Martin, and numerous experts from across the travel industry. Sessions included diverse topics such as risk management, conservation travel, adventure travel product development, big data, and indigenous travel. I delivered a presentation on the recently released Adventure Travel Guide Qualification and Performance Standard. Created by 18 professionals from 15 different countries, this standard gives destinations and companies a resource to meet international standards for guides. In addition to the inspirational and educational programming, the Summit is well known for the world-class networking. There are formal sessions, such as the one-day Marketplace (similar to a tradeshow), and the innovative Media Connect, which gives participants a one-on-one opportunity with the top tier travel media in attendance. Plus the coffee breaks, meals, and afterhours were priceless opportunities to share ideas and swap business cards.

 

For the destination, the Summit is an enormous opportunity to show of the best they have to offer. Attendees got to experience Chile’s adventure offerings on a multi-day Pre-Summit Adventure in places like Patagonia, Easter Island or the Atacama Desert, and on a Day of Adventure activity in the volcanoes and lakes region surrounding Puerto Varas.

 

Next year the Adventure Travel World Summit will be in Alaska. It is exciting to have the Summit coming home to the United States after traveling the world for the last 10. This will be a great opportunity for Washington State for many reasons. One, many of the international flights, and even some domestic will fly through Seattle opening up the possibility to host familiarization trips and promotions. Two, many of the outbound operators and media will be those that already work with the Western US and will be good contacts for Washington businesses to make. Three, the proximity to Seattle means Washington State delegates will pay less, and travel less to have access to this summit. Who knows, the Summit might be in Australia or India in 2017! Washington State is a robust and diverse destination. It stands very solidly as an Adventure Travel destination due to our diversity of geography, quality outfitters, and solid travel infrastructure. Attending the Adventure Travel World Summit is a great way to ensure we are on the map globally and able to tap into this growing and lucrative segment of the travel industry.

 

Links:

More on the Adventure Travel World Summit 2015:

http://www.adventuretravelnews.com/adventure-travel-world-summit-kicks-off-a-revolution-in-chile

Video highlights of the Adventure Travel World Summit 2015:

https://www.youtube.com/watch?v=yG7cj6ciP8c

 

*Outbound travelers from the Americas and Europe – 2013 Adventure Tourism Market Study – Adventure Travel Trade Association and George Washington University Study

IMG_1391

 

IMG_0839

 

Is Consolidation Good or Bad for the Travel Industry?

We are often told by merging businesses and corporations that consolidation will bring better services to more customers and will lower prices. Even regulators, whose job it is to protect the consumer, will often say this. This goes against both the capitalist theory of competition and my personal instinct. Why would a more powerful company with less competition want to lower its price if it doesn’t have to? Consolidation of essential positions (HR, finance, etc) might lead to increased profit for the fewer people that own the now larger company. And the now larger company might have more power in the marketplace to insist on lower prices from suppliers. But one should not assume that this cost savings will be passed on to consumers. In the travel industry, both mainstream and niches like Adventure Travel, the trend has been moving towards consolidation. I have personally seen very good ground operators lose significant amounts of business due to a tour operator upstream being bought and the now larger business unifying the entire business around a different supplier. This might seem good for the other ground operator, but this means greater homogenization of the products offered, and a company that might not have been ready for such an increase of growth now responsible for a much larger share of the market.

I haven’t seen a ton of attention given to the potential pitfalls for businesses and consumers with consolidation in the travel industry. There are two recently published articles, that, especially seen side by side, outlines some of the negative sides of consolidation. The first is in Adventure Travel News and outlines the separation of a young mega company: Peak Adventure Travel Group, a strategic venture between TUI Group and Intrepid Travel. This is the merger that saw ripples in the supply chain internationally. In addition to the possible impacts on businesses and consumers, it appears that mega mergers can sometimes be hard on the two merging businesses themselves. TUI and Intrepid are still huge, but I think this separation is ultimately good for the industry.

TUI-group and Intrepid Travel to Part Ways – Adventure Travel News

The second article was in the New York Times on July 1st. It initially caught my attention because the lead is about price collusion between the four major airlines. As a frequent flyer I get concerned with lack of competition amongst airlines, leading to poorer service and higher prices. The article digs into the fact that consolidation in the airline industry has made it easier for collusion to occur even though “[executives] actually hate each other, truth be told. But with so few of them left, there’s almost a natural oligopoly.” Airlines have gone from near bankruptcy to record profits. One reason is the extremely low fuel prices. Yet, ticket prices have not dropped as you would expect with lower costs. Says Senator Chuck Schumer: “It’s hard to understand, with jet fuel prices dropping by 40 percent since last year, why ticket prices haven’t followed. We know that when airlines merge, there’s less price competition.” Senator Schumer has called for a Justice Department investigation.

Airlines Under Justice Department Investigation – New York Times

To maintain a vibrant and sustainable travel industry it is important to be skeptical of the promises made by merging companies. We need to hold regulators accountable to do their jobs and make sure they apply scrutiny when approving such mergers.