INDUSTRY SNAPSHOT. update cover. update logo on every slide to 2016

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1 2016 update cover update logo on every slide to 2016

2 2016 Adventure Travel Trade Association Industry Snapshot Every year since 2006 the ATTA has surveyed its growing database of tour operators. Each year adventure travel tour operators are invited to share information about their business operations as well as trends they are experiencing in traveler demographics, destinations, and activities. The ATTA Industry Snapshot offers those already working in adventure travel with a useful benchmarking tool, and those outside the industry with perspective on the health, outlook and characteristics of this dynamic industry. The 2016 Industry Snapshot asks respondents to share information about the 2015 business year. The survey was conducted using QuestionPro Online Survey Software during the month of February Two hundred and sixty nine completed surveys were returned, along with two hundred and fifty one partially complete surveys. Respondents came from companies headquartered in eighty two different countries. Respondent Profile The largest group of respondents have company headquarters in North America (35 percent), followed by Europe (21 percent) and South America (18 percent). Fifty-eight percent of respondents characterize themselves as inbound (supplier) companies, 26% characterize themselves as inbound and outbound (buyer), and 17 percent characterize themselves as outbound only. Result Highlights Company Financials Companies from all regions of the world have a favorable revenue outlook for Seventy percent of respondents say they expect revenues to be up in 2016, 22 percent expect revenues to be flat, and eight percent expect revenues to be down. Looking at revenue projections regionally, companies in South America are the most bullish on adventure travel, expecting a 27 percent increase in revenues for 2016 over In terms of profit, companies in North America and South America expect profits up as much as 33 percent over The primary factor influencing the positive revenue and profit projections is new customers and adding new products while controlling costs.

3 Traveler and Product Trends Operations reated by Ecem Afacan m the Noun Project Travelers As in past years, operations is the area in which most companies are adding staff (35%). Twenty-eight percent of revenue is spent on payroll. Marketing budgets have been increasing every year and will be up again in 2016, at an average of $169,245 they are 18 percent higher than 2015, and six percent of revenue. Booking When asked if their company has an online reservation system that accepts credit cards, 53 percent of adventure travel tour operators said they do not. For those companies that do have an online booking system (online booking defined as an automated system to handle the entire transaction from trip selection, availability confirmation and payment) companies in the Middle East and Europe had the highest percentage of their bookings completed online, with 48 percent and 47 percent respectively. Globally, the average age of adventure traveler customers is 48. Tour operators reported fifty percent of their adventure travelers are between the ages of 41 and 60. These adventure traveler customers are slightly more likely to be female (53 percent). Most are traveling as couples (36 percent) and in groups (32 percent). Solo travelers and families each make up approximately 17 percent of adventure travel customers. Itineraries and Activities It is interesting to note that while families and solo travelers make up the smallest percentage of adventure travel customers at this time, 72 percent of adventure companies say they are developing more itineraries to serve families and multi-generational groups. Forty two percent say they are developing more itineraries to appeal to solo travelers. Seventeen percent are working on trips specifically to appeal to LGBT (lesbian, gay, bisexual, transgender) travelers. Custom itineraries, soft adventures and cultural adventures are the most indemand types of itineraries. Soft adventures is a general term that includes activities such as backpacking, birdwatching, camping, canoeing, cycling, fishing, hiking, horseback riding, sea kayaking, rafting, safaris, surfing, snorkeling, for example.

4 When asked what trends they see as most significant in driving product development in adventure travel today, adventure travel companies offered a broad range of insights. A few direct quotes from this openended question are provided below: Increasing need to implement a social element into the trip such as visiting an orphanage, home for elders, etc. Comfort, safety, security, reassurance that tour operators give to their guests. Greater demand for more interaction with the community. Tailor made experiences that offer the feeling that you are the only one there - complete immersion and authenticity. Trip Duration and Price Trip duration ranges from five days to nine days. Reported trip prices ranged from $167 USD per day (for companies based in Central America/ Caribbean) to $448 USD per day (for companies based in North America). Destinations The top five regions of the world receiving increased interest from travelers are South America, Central America, North America, Southern Africa and Western Europe. The top three countries that clients are booking are Italy, United States, and Spain. Destination Benefits Adventure travel tour operators estimate that 65% of the per guest trip cost remains in the local region. Furthermore, they estimate each guest spends approximately $145 USD on local handicrafts or souvenirs.

5 Organization Headquarters Pacific 2% North America 35% Middle East 3% Central America 3% Asia 8% Europe 21% Africa 9% South America 18%

6 Tour Operation Type Outbound (buyer) 17% Outbound and Inbound 26% Inbound (supplier) 57%

7 Customers Per Year HEADQUARTERS CUSTOMERS PER YEAR AFRICA 2,863 ASIA 6,578 CENTRAL AMERICA / CARIBBEAN 14,402 EUROPE 7,908 MIDDLE EAST 2,157 NORTH AMERICA 10,472 SOUTH AMERICA 4,198

8 Trip Length HEADQUARTERS LENGTH IN DAYS COMPANY SIZE IN 2014 BY REVENUE LENGTH IN DAYS AFRICA 9 $0-250K 6 ASIA 8 $250K-1M 8 CENTRAL AMERICA / CARIBBEAN 5 $1M-5M 9 EUROPE 7 GREATER THAN $5M 8 MIDDLE EAST 9 NORTH AMERICA 8 PACIFIC 9 SOUTH AMERICA 6

9 Trip Price Per Day in US Dollars Including lodging, excluding airfares HEADQUARTERS PER DAY, 2015 CHANGE OVER/UNDER 2014 AFRICA $285 9% ASIA $178 8% CENTRAL AMERICA / CARIBBEAN $167 65% EUROPE $200 2% MIDDLE EAST $288 7% NORTH AMERICA $448 1% SOUTH AMERICA $255 22% * Regions not containing sufficient sample size are excluded from this chart. ** Trip prices are quoted in USD each year and may be affected by fluctuating exchange rates year over year. Survey respondents provide estimates to the best of their knowledge.

10 Staff Averages By Company Size FULL TIME EMPLOYEES NON-STAFF SUBCONTRACTORS $0-250K 14 $0-250K 15 $250K-1M 7 $250K-1M 15 $1M-5M 15 $1M-5M 21 GREATER THAN $5M 60 GREATER THAN $5M 52 COMPANY SIZE BY 2015 REVENUE COMPANY SIZE BY 2015 REVENUE

11 In what business area did you add the most staff in 2015? Other 2% Operations 35% Accounting 3% Office Administration 5% Marketing 9% No additions in % Guides 13% Sales 16%

12 What percentage of your organization's annual revenue is spent on payroll (excluding contractors)? 28% OF REVENUE SPENT ON PAYROLL

13 Guide to Guest Ratio HEADQUARTERS RATIO AFRICA 1:6 ASIA 1:8 CENTRAL AMERICA / CARIBBEAN 1:9 EUROPE 1:9 1:8 GLOBAL AVERAGE MIDDLE EAST 1:8 NORTH AMERICA 1:8 SOUTH AMERICA 1:7

14 Estimated percentage of trip cost per guest that remains in the local region. 65% OF TRIP COST REMAINING IN THE REGION

15 Average estimated guest expenditure on local handicrafts or souvenirs. $145 SPENT PER GUEST (SHOWN IN US DOLLAR) ATTA asked tour operators to estimate how much an average guest spends on local handicrafts or souvenirs.

16 Does your organization have an online reservation system that accepts credit cards? No 53% Yes 47%

17 What percentage of your bookings are completed online?* BY REGIONAL LOCATION OF BUSINESS BY COMPANY SIZE IN 2015 AFRICA 24% ASIA 9% $0-250K 42% CENTRAL AMERICA/ CARIBBEAN 28% $250K-1M 31% EUROPE 47% MIDDLE EAST 48% $1M-5M 42% NORTH AMERICA OCEANIA 5% 43% GREATER THAN $5M 34% SOUTH AMERICA 22% *Online booking means the entire transaction is completed using an automated system to select the trip, confirm availability and pay.

18 EBITDA* HEADQUARTERS EBITDA MARGIN 2014 EBITDA MARGIN ASIA $318,000 $285,000 25% 24% EUROPE $175,000 $132,000 10% 9% NORTH AMERICA $283,000 $220,000 15% 13% SOUTH AMERICA $326,000 $310,000 16% 15% Regions not containing sufficient sample size are excluded from this chart. * EBITDA - Earnings Before Interest, Taxes, Depreciation and Amortization.

19 Revenue Outlook for 2016 GLOBAL VIEW Flat 22% Down 8% HEADQUARTERS REVENUE OUTLOOK FOR 2016 COMPARED TO 2015 AFRICA +15% ASIA +19% EUROPE +19% NORTH AMERICA +26% Up 70% SOUTH AMERICA +27%

20 Net Profit Outlook for 2016 GLOBAL VIEW Flat 23% Down 12% HEADQUARTERS NET PROFIT OUTLOOK FOR 2016 COMPARED TO 2015 ASIA +21% EUROPE +33% NORTH AMERICA +32% SOUTH AMERICA +27% Up 65%

21 Primary Factor Influencing Net Profit Projections Positively NEW CUSTOMERS 34% NEW PRODUCTS ADDED WHILE CONTROLLING COSTS 21% ACCESS TO NEW MARKETS 13% CURRENCY EXCHANGE NEW BUSINESS LINES ADDED 9% 7% CRISIS IN ANOTHER REGION OTHER MORE REPEAT BUSINESS DECREASED OVERHEAD FEWER OR FLAT OFFERINGS WHILE CONTROLLING COSTS 4% 4% 3% 2% 1% OIL/GAS PRICES 1%

22 Primary Factor Influencing Net Profit Projections Negatively FEWER NEW CUSTOMERS 31% CRISIS IN MY REGION 28% INCREASED OVERHEAD OTHER 14% 14% INCREASED COMPETITION 7% CURRENCY EXCHANGE LESS REPEAT BUSINESS 3% 3%

23 Customer Demographics 70+ 5% % Age % Traveler Type Families 16% Couples 36% 28 and under 11% Groups 32% % % Gender Solos 17% Male 47% Female 53%

24 Customer Demographics HEADQUARTERS % FEMALE GUESTS AFRICA 57% ASIA 45% EUROPE 53% NORTH AMERICA 51% SOUTH AMERICA 51%

25 Are you developing more itineraries to address the needs of: Solo Travelers Family Multi-Generational Yes 42% No 28% No 58% LGBT (Lesbian, Gay, Bisexual, Transgender) Yes 72% Yes 17% No 83%

26 Average Age of Clients HEADQUARTERS AVERAGE AGE AFRICA 49 ASIA 42 EUROPE NORTH AMERICA 49 SOUTH AMERICA 45 GLOBAL AVERAGE CLIENT AGE * Regions not containing sufficient sample size are excluded from this chart.

27 What trend or trends do you see as most significant in driving product development in adventure travel, today? GENERAL INDUSTRY TRENDS ADVENTURE TRAVEL IS ENTERING THE MAINSTREAM COMFORT/SAFETY/SECURITY TOUR OPERATORS OFFER TO GUESTS ZIKA VIRUS WILL AFFECT OUR BOOKINGS LAST MINUTE BOOKINGS ONLINE BOOKING MARKETING TRENDS AGGRESSIVE MARKETING ATTRACTING NEW CUSTOMERS BLOGGING REVIEW-DRIVEN View more trends in report appendix.

28 What trend or trends do you see as most significant in driving product development in adventure travel, today? ACTIVITY TRENDS TREKKING CYCLING FOOD, BEER, UNIQUE GASTRONOMY CULTURAL EXPERIENCES COMMUNITY INTERACTION MOUNTAIN BIKING EXCURSIONS INCORPORATED INTO GROUP TOURS THEMES CONSERVATION/WILDLIFE/ NATURE CULINARY TOURISM SHOULD BE, BUT CLIENTS NOT ASKING AS MUCH AS EXPECTED SAFETY AND SECURITY ECOLOGICAL AWARENESS View more trends in report appendix.

29 Regions of Increased Customer Interest Increasing Interest No Change Decreasing Interest

30 Top Countries Clients Are Booking By Company Headquarters HEADQUARTERS #1 #2 #3 #4 #5 #6 EUROPE ITALY SPAIN FRANCE UNITED KINGDOM SOUTH AFRICA CHILE NORTH AMERICA UNITED STATES ITALY PERU ECUADOR CANADA ARGENTINA ALL REGIONS ITALY UNITED STATES INDIA PERU SPAIN ECUADOR

31 Itineraries of Changing Customer Interest How customer demand in 2016 compares to 2015 CUSTOM ITINERARIES SOFT ADVENTURES CULTURAL-BASED ADVENTURES SHORTER DURATION OPTION TO EXISTING ITINERARIES DOMESTIC AND/OR REGIONAL TRAVEL FAMILY OR MULTI-GENERATIONAL SELF/GUIDED PHILANTHROPIC ACTIVITIES GREEN TRAVEL OPTIONS HARD ADVENTURES

32 Primary Focus of Guest Requests for Increased Customization % ranking each most important area of guest requests for customization Time within the planned itinerary for customized experiences 18% Completely customized trips 55% Custom departure time 28%

33 Top 2016 Activities Word Cloud multisport SCUBA paragliding Archaeological Traditional Dive Whale hike Nature Whitewater Snorkel exchange Jumping amalfi germany kayak Philanthropy 4x4 loire wildlife safari Tours Rafting Arade Diving volcanoes inca Safaris Cultural Group biking Privaetly City cruise Cycling CULTURE Ski Balloon watching Table Mull family camping Experiences cave marble Pole MTB Lions turtle uyuni wine horseriding Bird road naturecultural Guided Drives History balooning Ecotourism Spa Falls trail Walking hiking Vinson bike trekking Day flats Sof Land tourism Tour villages sail Great sport Yoga skiing visits glacier BICYCLE Grand equestrian luxury Mt english sled based caves visit mtn South patagonia sea wellness Snowmobiling Hot gwaii jeeps Galapagos sicilian heli France Photography Voyage fly Halfday surfing salt Teaching River lamanai canoeing dogs coast Bicycling Air Skye Riding viewing touring tubing Top Ten Terms Used to Describe Preferred Activities: 1. Cultural 2. Hiking 3. Cycling 4. Eco-tourism 5. Trekking Holidays 6. Walking 7. Safaris 8. Locals 9. Birdwatching 10. Environmental atv site canoe life provence driving fishing Bear Victoria haida Motorcycling Cruising Children bait Park Horse snowtravel immersion cross wild Animal Bungee Gorilla boarding Food ride mountaineering mulitday Treking

34 Top Activities Clients Are Booking By Company Headquarters HEADQUARTERS #1 #2 #3 #4 #5 AFRICA SAFARIS ENVIRONMENTAL SUSTAINABLE ACTIVITIES CAMPING ECO-TOURISM GETTING TO KNOW THE LOCALS ASIA CULTURAL ACTIVITIES TREKKING CAMPING ECO-TOURISM VOLUNTEER TOURISM EUROPE HIKING CYCLING WALKING TOURS CULTURAL ACTIVITIES TREKKING NORTH AMERICA CYCLING CULTURAL ACTIVITIES HIKING ECO-TOURISM SNORKELING SOUTH AMERICA CULTURAL ACTIVITIES ECO-TOURISM HIKING TREKKING WALKING TOURS ALL REGIONS CULTURAL ACTIVITIES HIKING CYCLING ECO-TOURISM TREKKING

35 Marketing Budgets (US Dollars) 2015 AVERAGE 2014 AVERAGE CHANGE OVER 2014 BUDGET AS A PERCENT OF 2015 REVENUE $170,000 $143,000 18% 6%

36 2015 Marketing Budget Detailed 2016 PERCENTAGE OF BUDGET 2015 PERCENTAGE OF BUDGET PERCENTAGE OF 2015 GROSS REVENUE AVERAGE DOLLAR AMOUNT CONTENT CREATION (STORIES, PHOTOS, VIDEO) 16% 15% 0.6% $23,000 TRADE EVENTS 15% 16% 0.6% $22,000 SOCIAL MEDIA OUTREACH 13% 12% 0.6% $18,000 ONLINE ADVERTISING AND SPONSORED CONTENT 12% 14% 0.6% $17,000 SEARCH ENGINE OPTIMIZATION 10% 8% 0.5% $14,000 CAMPAIGNS 9% 7% 0.4% $12,000 PUBLIC RELATIONS 6% 6% 0.3% $9,000 PRINT ADVERTISING 6% 8% 0.3% $9,000 CONSUMER EVENTS 5% 4% 0.2% $7,000 DIRECT MAIL 4% 4% 0.2% $6,000 SMARTPHONES AND MOBILE APPS 1% 0.5% 0.1% $1,000

37 Other Items in 2016 Marketing Budget Includes: Website Development Roadshows Partnerships/Partner Visits/ Partner Promotions Sales Missions

38 Does your company have a documented safety and risk management plan? Africa Asia Europe No 18% Yes 62% No 25% Yes 75% No 35% Yes 65% North America South America Yes 72% No No 33% Yes 31% Yes 67% 69%

39 APPENDIX

40 What trend or trends do you see as most significant in driving product development in adventure travel, today? Itinerary Trends Women adventurers Aging travelers Being invited by friends, especially women Boomers want to be active Desire to try a new challenging activity, supervised by a professional Disposable income Desire for easy to moderate activities Families Internet brings more informed travelers More use of social media and internet. Digital media and mobile technology Multi-generational Increasing number of Asian travelers and the need to adapt experiences to fit their cultural expectations and language needs Travelers are Trophy Collectors, not hunters. Less interested in: the journey, camping, off-line Less fear of travel in unstable areas Solos

41 Top Activities Clients Are Booking By Company Headquarters - Other Demands A Adventure mix with luxury experience (good food and good night sleep) E Encounters with local people Expedition Travel C Authentic tourism experiences Canyoning Choosing lodging F Fishing in Alaska Food and wine - meet the maker Food and Wine, pilgrimage Routes (point to point long distance walking) Climbing tours G Glacier hiking Combination of soft adventures with cultural explorations Combining sailing with other activities, such as whale watching H Green woodcraft Heritage High Ropes Course Community based tourism Cooking - hands on cooking programs Horse riding holiday combined with a cultural tour post ride

42 Other Demands (continued) I Interactive authenticity Culture, Learning Activities, High-end camping experiences (glamping), Kayaking Participative tourism sharing benefits and activities with local people Photography tours M Monastic temples, monuments, daily excursion to local places on demand, lake view More creature comforts in a remote setting Q R Qualified leaders/guides Rock Climbing and Ice Climbing Clinics P More people like to get involved in local activities instead of just looking at things Mountain biking Multi adventure/ mulitisport Mystical tourism Paragliding and hang-gliding S Safaris Safety and security Service Shorter lead-time Skating on natural ice Small groups, private trips, winter trips

43 Other Demands (continued) S Special Interest Trips Specialist guides W Walking in remotes places, mix of mountain and beaches..not just one type of environment SUP, diving, hiking Whale shark tours Surf Wildlife viewing and photography T Tailormade activities Wildlife watching Trips to two or more countries Y Yoga & Wellness V Visits of social character (home for elders, orphanage, etc.) Yoga, Soft adventure

44 THANK YOU

45 2016 update cover update logo on every slide to 2016