$89 Billion Means it’s Time to Start Managing Up
October 26, 2010 by Jeff Welch
It seems to me that the more zeros you add to a number, the harder it is to understand. Which is too bad because in today's world, numbers matter. Numbers help us keep score. And like it or not, keeping score is what the world does.
I just returned from the Adventure Travel World Summit in Aviemore, Scotland. Lots of good haggis, good scotch and good people doing some really interesting things. But what I didn't see was many big companies — even big by the travel industry's small-ish standards. Which in my view, is too bad because adventure travel won't be able to advance its sustainability goals without some bigger numbers behind it.
We've heard about how the adventure travel market is valued at $89 billion. Which is great — and maybe undercounted — but regardless, let's put that in context:
All figures are in U.S. dollars and are latest available. Market value is as of Mar. 1, 2010. Data from ATTA and Forbes.
Global GDP is approximated at $58 trillion. That makes our little sector of the market one-tenth of 1 percent. Further, there are 55 individual companies in the world that have annual gross sales higher than $89 billion. The number from the travel sector? Zero.
Now certainly, few of us are involved in the adventure travel business to make loads of money. But if one of the reasons we're in this business is because we believe travel can help sustain places and cultures, then we need to also understand where we sit in the global economy. Because the reality is that there are massive forces out there that have far, far bigger influence than we have in determining whether we should sustain the world's great places. Look no further than the saga of BP and gulf coast tourism. BP's annual sales alone are two and a half times greater than the entire adventure travel segment's combined. Was there ever a doubt that Obama's moratorium on off-shore drilling would be short-lived?
My point? Let's pat ourselves on the back for how far we've come. But let's figure out how to get more big guys on the team. The travel industry, even in its largest incarnations, is still small ball when viewed through the context of the global economy. And if we want our values spread wider in the world, then it's time to start managing up.
Good commentary Jeff and I have another angle to consider- think about the incredible amount of good this comparatively small sector does- some of the primary protectors of disappearing wildlife like tigers and gorillas, educators of the tourists, contributors to local (and often desperate) economies are adventure travel companies. They are also often the conscience, the voice, the pushers of innovation in practices, so while small, I would argue that the influence by this space is outsized when compared to revenue. That said, more big company dollars pouring into this space and specifically into its 'do-good’ business efforts could be quite helpful. I think of G.A.P. and its efforts through Planeterra as an example. More of that please!
Thanks Shannon, you are probably right. The influence is probably outsize compared to revenue. So how do we get larger companies to join us…if they too had outsize influence for these things, the multiplier would be huge.
Revenue, job creation, profits and behavioural / political influence are all important to the Adventure Category. And as a niche within the travel industry it has done an impressive job in all of these. Yet, continued growth for any company or industry is challenging. I argue we need greater business acumen from ourselves, passion is a key ingredient we bring to the field but it doesn’t fix your cash flow or produce your marketing plan. A small, influential, sustainable and award winning service tour operator that has very little business savvy is rolling the dice with their long term viability. I don’t believe Jeff is arguing for bigger, I think what he’s saying is lets get better.
Jeff I hear where you are coming from and we all know how money talks, and hence as you point out, even an individual company can have much more influence than a whole industry sector.
However, as has been eluded to I think we should measure the sector on a different scale. Walmart or BP or any of the large corporates you mention measure their worth in billions and shareholder value but how many of them make any real difference in their customers lives? How, many are educating and inspiring?
Also as an industry do we really want to become a monster global player with major large companies within our niche? I think/feel the future lies more towards the education benefit of what we do. This can be done by being more organized as an industry and more education for our clients and by getting those huge companies interested in what we do, not from a two week exciting vacation that many of the senior managers think of when they come in contact with our industry but by educating them to see how they could work through the industry in order to meet many of their social and environmental obligations.
Thanks for the comments Peter and Alexi. I’m trying to suggest that yes, we need to get better as Alexi says. I also think we have to demonstrate more financial power (which doesn’t necessarily mean we’re a global monster) in order to truly advance our goals. I wish as much as Peter does that we measured Growth National Happiness or something (as they do in Bhutan) instead of Gross Domestic Product. But we don’t. And I don’t see that happening any time soon in most of the world.
We need our niche, but if we banded together more with others in the larger travel industry I believe we could hold a lot more sway. Check out this recent article on the potential power the industry might exercise in the BP debacle. http://ow.ly/30syH What if we could harness that BEFORE a crisis hit?