The travel industry is made up of passionate entrepreneurs eager to share their love for exploration and adventure with others. Many dream of turning this passion into a profession, and they make the leap into business ownership, but in doing so, they quickly realize that more than just an interest in adventure travel is required for success in the industry.
According to Statistic Brain, 25 percent of start-up businesses fail within the first year of operation, and 55 percent have gone out of business by their fifth year. And, in a detailed Skift article considering the fate of travel-related start-ups (many of which were tech-oriented) over the course of four years, approximately 60 percent were no longer in operation.
Those are pretty grim numbers for anyone who wants to embrace their entrepreneurial spirit, and these figures certainly aren’t meant to discourage anyone who has thoroughly considered what it means to own an adventure travel company. However, before buying business cards, it’s essential for would-be adventure travel business owners to understand how to see an idea through from passion to practicality.
Money, Money, Money
“The number of times we thought about giving up are too many to mention,” said Paul Easto, co-founder of Wilderness Scotland, which was established in 2002 as an inbound tour operator. “The first two years were particularly tough, and I’d say it really took us ten years — and that sounds like a really long time — to become a business.” That’s right: Easto said it took ten years of defining the perfect products and services, finding the right way to reach the ideal market, making mistakes and getting back on track, and staying financially viable while delivering on the passion to finally feel like Wilderness Scotland was a bonafide, sustainable business on a solid path forward.
But let’s pull back and look at those first two years for a moment. It’s during this pivotal time that adventure travel business owners often have to do everything themselves, from designing the products and finding the customers to conducting day-to-day operations and guiding tours.
In the technology industry, there are accelerator programs and venture capitalists available to give new companies a leg up financially, and even though financial funding certainly does not necessarily result in success, it does offer breathing room to hire staff and invest in additional resources to get a company running. However, this kind of funding is not readily available for adventure travel businesses, which means business owners have to juggle many roles at once.
“You find yourself working for not very much money to keep things going but you believe in it, and you believe there is a light at the end of the tunnel, even if you can’t see it,” Easto said. “My one piece of advice for anyone starting out in this business is to make sure you have some kind of wiggle room when starting out because it’s going to take time to get customers. It doesn’t happen overnight. And this slack in your finances let’s you get things right and the way you want them. That will immeasurably increase your chances of success.”
But It’s Not All About Money
Beyond funding, though, potential business owners need to be mindful of a number of other factors when entering the adventure travel industry. According to CB Insights, other than finance-related factors, the primary reasons start-up companies fail are a lack of market need, not having the right team, being outcompeted, having a poor product, lacking a business model, and failing to market properly.
Learn from these failed companies before launching a new business: If budding entrepreneurs are going to invest time in creating a product or service, make sure it is the right product or service for the right market. Define a niche, learn about the target customer, and create a strategy to reach that demographic. “Stand out and be remarkable,” Easto advised. Be meticulous in properly establishing the business. Unfortunately, in many countries this requires working through an unimaginable amount of paperwork and bureaucracy, especially when dealing with customer safety and security. But getting through this red tape accurately from the beginning helps mitigate unwanted financial and legal issues later.
In today’s marketplace, companies absolutely must have an online presence. “Understanding how you can quickly benefit from that platform is one of the biggest challenges right now because so much of it’s driven by search,” Easto said, “and unless you are very forward-thinking and decided to set this company up a long time before you actually launched it, then you’re going to struggle for visibility in the online marketplace.” Invest in a reasonably priced web designer who can optimize a site for success. Set up social media profiles and engage with customers in the platforms where they are socializing. A lot of research has been published online about best practices for reaching specific target markets and essential aspects to keep in mind about the industry; read it and then put the advice into practice.
In addition to sound business practices, a start-up’s success is also hinged on personal characteristics. “Patience and perseverance are really important in the beginning because you have your ideas of what you want to do but it doesn’t work out quite like that,” Easto said. And business owners need to be detail-oriented — especially in the adventure travel industry. “There are no shortcuts,” he said.
The Bleeding Heart
The adventure travel industry is known for its environmental and sustainable awareness. Giving back and leading with integrity are hallmark characteristics that set this business apart and make it particularly rewarding to work within. However, when starting a new business, it may not be practical to give as generously as desired right away.
Take a page from Easto’s playbook: “I remember year two or year three, we were turning a profit and decided we were going to contribute 20 or 25 percent of our profit to a grassroots environmental charity. Looking back on that, that was pretty reckless from a business point of view. It’s great we were so passionate about that particular organization, but in the long-term interest of the organization, that was not the right decision.” This is not to say new businesses shouldn’t ignore their desires to give back to the greater good altogether. However, take care of business first, being mindful of what can realistically be set aside for charitable or community purposes.
“Stay true to your values 100 percent, but ensure the core business is taken care of, because if you’re out of business, you can’t do anyone any good,” Easto said.
Looking Back and Moving Forward
Despite the challenges of entering the adventure travel industry, it isn’t all a doom-and-gloom scenario. In Easto’s case, for example, Wilderness Scotland initially ran on a tight budget as it established itself in the marketplace. Today, it employs approximately 30 in-office staff members and 100 guides who work for both the anchor company and the newly established Wilderness Ireland, which put down roots in 2013.
Business owners who are able to surround themselves with a supportive professional and personal network also help to set themselves up for success. This may include significant others who are understanding about the inconsistent paychecks and long hours, or mentors who generously offer time and advice. “Having the support network of family and friends is critical,” Easto said.
Membership in organizations like the Adventure Travel Trade Association (ATTA) can also go a long way in helping propel new enterprises toward success. “In the beginning, we focused purely on B2C, and that’s what we did for many years,” Easto said. “It was really when we felt we were ready to service the international market better that we looked at the B2B proposition, and that’s what has really helped drive our business forward over the last seven or eight years, in large part through the ATTA network.”
There will be hard days — that’s true for even the most seasoned professionals in the business. But on those days, keep these words from Easto in mind: “I always remind myself, particularly when I have a difficult day, what an amazing industry this is to work in. Don’t be afraid to ask for help from anyone in the community, because I’ve always found it to be a group of individuals who are willing to help out and see people succeed.”