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Adventure Travel International (ATI) will begin operations in September, 1999 and provide adventure, sport/travel packages to people in the Pacific Northwest, specifically the greater Woodville area. The founders and employees of ATI are experienced travel-industry professionals and passionate about the activities ATI will promote and offer.
An opportunity for ATI's success exists because the national tourism and travel industry is growing 4% and adventure travel 10% annually. Further, the Woodville adventure travel market is growing at least 12% annually and has no providers who specialize solely in adventure travel. ATI is poised to take advantage of this growth and lack of competition with an experienced staff, excellent location, and effective management and marketing. The Woodville area, like much of the Pacific Northwest, has a large concentration of outdoor recreation enthusiasts. These health-conscious individuals, couples, and groups interested in popular adventure sports, such as skiing, kayaking, trekking, etc., are ATI's primary customers. ATI's target market is an exploitable niche and ATI will provide a specialized and thus differentiated service. Prices will be competitive with the remainder of the market. The company's estimated sales for the first year of operations is $534,607, increasing 10% annually for the next two years.
2.0 Situation Analysis
According to the Department of Commerce, the U.S. travel and tourism industry is the nation's third largest retail industry and will be number one by the year 2000. Revenues from travel have increased approximately 100% in the last decade with U.S. travel agencies producing over $100 billion in revenues each year. Adventure travel, a segment of the travel and tourism industry, is growing at least 10% per year. More than 50% of the U.S. adult traveling population, or 147 million people, have taken an adventure trip in their lifetime, 98 million in the past five years. Thirty-one million adults have engaged in hard adventure activities like whitewater rafting, scuba diving, and mountain biking. An additional 25 million engaged in both a hard- and soft-adventure activity. Activities most commonly participated in during adventure vacations: camping (85%), hiking (74%), skiing (51%), snorkeling or scuba diving (30%), sailing (26%), kayaking or whitewater rafting (24%), and biking trips (24%).
Customers tend to be young and affluent, ages 18-34, and one fourth are from households with annual incomes of $75,000 or more. In addition, statistics show that 8,000 U.S. companies offered adventure packages that generated $7 billion in 1997. There was a 66% increase in executive participation in adventure travel between 1992 and 1996. California holds the largest population of adventure travelers, who tend to live in urban areas. ATI will be located in an urban area within the state of California. In addition, it will be the only adventure travel agency in an area with 300,000 people and a large concentration of outdoor recreation enthusiasts and customers who match ATI's target profile.
Planning an adventure trip requires knowledge of the travel industry and popular adventure sport destinations, as well as adventure travel activities. Adventure travel customers are a specialty group. These are primarily young professionals who often lack the time and experience necessary to effectively plan an adventure trip on their own. ATI will communicate its ability to meet the demands of this market and fill this need.
2.1 Market Summary
The travel and tourism market is separated into two main categories, business and leisure travel. Each contribute about 45% to total revenues. The remainder of revenues are generated from combined business/leisure trips. The market is further separated into domestic and international travel. Domestic travel accounts for approximately 70% of industry revenues. Business travel can be divided into two categories, the medium to large corporate account, and the small independent businessman. Leisure travelers are classified according to the types of trips they take, income, or age. The four primary leisure travel groups are:
1. Adventure, Special-Interest, R&R, Honeymoons & Sightseeing Trips.
2. High-Income Travelers.
3. Budget-Conscious Travelers.
4. Families, Students & Seniors.
Adventure travel generates approximately $15 billion of the approximately $100 billion-dollar annual industry revenues. Approximately $2-4 billion of these revenues come from California adventure travelers. Based on these and other figures, ATI estimates the Woodville adventure travel market to be approximately $6 million annually. ATI estimates that it will capture about 8% of this market.
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