NEW YORK -- As
the Adventure Collection prepared to observe its fifth anniversary,
Chairman Sven Lindblad reflected that things could have been much
different.
When the
consortium of active tour operators formed in 2000, the tour
operator segment was dominated by giant roll-ups created by the
investment community. A handful of corporations -- including the
Global Vacation Group, the Far & Wide Travel Corp., Vista
Travel Ventures and Grand Expeditions -- led the charge in
consolidating the segment.
It had become
widely accepted as inevitable that the tour operator segment would
consolidate, as had other industries. Business history dictated it.
Only those who were part of a large group would survive.
The rationale, as
articulated by Far & Wide CEO Phil Bakes, went as
follows:
The supplier
base has consolidated.
The cost of
necessary automation is too high for one tour
operator.
Consumers want
one-stop shopping.
Agents want to
deal with few wholesalers who can bring them many
products.
The buzz became
Who is buying whom? What will be the next big acquisition? As one
tour operator put it, It was like choosing up sides for a baseball
game in grade school. I was standing there saying, Pick me! Pick
me!
But if the pitch
was persuasive, the money was even more so. Lindblad was tempted to
sell out and get the payday of a lifetime. I was offered $30
million, with 80% up front, he said.
On the day of
decision, Lindblad did a thorough soul-searching. I was shaving and
talking to myself in the mirror, he said. Everything financially
was yes, yes, yes. At the end of the day, I could get all the money
I could ever possibly want. But I would feel that I had sold
out.
Lindblad declined
the offer and never looked back, except on Sept. 12, 2001. I
regretted it for a few days [after that], he said.
He remained
intrigued with the idea of building a platform of companies but
didnt want to give up his independence.
Lindblad
continued to talk about an alliance of tour operators. Eventually,
the idea took shape as the Adventure Collection, a group of
independently owned and operated companies that share common values
of the environment and cultural protection, sustainable tourism and
the highest operating standards.
The group
included Backroads, Canadian Mountain Holidays, Geographic
Expeditions, Mountain Travel Sobek and Outdoor Adventure River
Specialists. Later, Buddy Bombards Europe, Bushtracks Expeditions,
Micato Safaris, Natural Habitat Adventures, Natural Outdoor
Leadership Schools and Off the Beaten Path joined. Mountain Travel
Sobek dropped out in 2001.
Members
collaborate in various ways: sharing best practices,
cross-marketing products and working on joint public relations
projects. They meet twice a year and also associate in informal
ways. The group is currently working on plans with Virtuoso for a
joint sales force.
The companies
remain independent, and all collaboration is voluntary.
Though they
remain competitive, it doesnt get in the way of collaboration,
Lindblad said. Everybody who travels with us does different things.
One year they go on safari, the next year they may climb a mountain
or go to Antarctica. So the logic is: Keep them in the
family.
In 2005, all the
roll-ups have collapsed except Grand Expeditions. Adventure
Collections combined revenues are growing. Lindblads theory is that
the essential ingredient of success is independence.
The inherent flaw
in the roll-ups was that a lot of the companies were driven by such
intense passion. They were not perfect and not well capitalized,
but they wound up being incredibly fleet of foot, able to navigate
complex terrain and somehow thrive. If you weaken that battery --
the energy of the entrepreneurial spirit -- you lose the essential
drive. Entrepreneurs are not good at sitting in a room where
authority has shifted to a figure they dont see eye to eye with.
Its not in their nature.
To contact
reporter David Cogswell, send e-mail to [email protected].