Rising boomer demand puts Metro Vancouver’s niche travel firms on the map

Trend this century is toward individualized private tours and small-group excursions

With stock markets hitting record highs and retiring baby boomers fuelling the global tourism sector to record levels, entrepreneurs are finding that offering generic fixed-itinerary day tours on large buses seldom satisfies an ever-fussier customer base.

Specialized tours have grown in significance since at least the turn of the century, with tour companies developing niches and offering experiences to specific demographics or particular interests.

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Companies such as Atlantis Events, for example, developed a niche offering cruises for gay men. Many local ventures offer adventures for women.

Surrey-based Village Travel co-owner Sharleen Dickson told Business in Vancouver that she developed her agency’s Ladies on the Go division in 2008 because she saw demand from women who lacked companions yet wanted to travel and feel the safety and camaraderie of being in a group. Revenue has steadily grown, she said.

North Vancouver’s Travel Concepts similarly sprouted a Women With Wings division in 2006. That brand now accounts for about 25 per cent of Travel Concepts’ $9 million in annual revenue, said managing partner Cindy Horton.

All of these tours helped the global tourism sector to grow 3.9 per cent to a record US$8.8 trillion in 2018 — the eighth consecutive year above the global GDP growth rate, according to the World Travel and Tourism Council.

The natural extension of offering niche experiences is to offer individualized tours, where a suitably educated, private tour guide takes a traveller, and perhaps a companion, on a tailored itinerary.

Those specialized tours may once have been viewed as an extravagance but they have become commonplace, and along with the proliferation of those tours has come investment capital.

Vancouver-based ToursByLocals Inc. last week landed what could be a $33-million capital injection from Tritium Partners LLC, a private equity firm based in Austin, Texas. The deal is dependent on ToursByLocals meeting milestones.

The profitable company generated around $75 million last year arranging private tours with guides in 932 locations around the world, ToursByLocals CEO Paul Melhus told BIV.

Only around 4,100 people out of 36,000 applicants were deemed qualified to become guides at the 12-year-old company, he said. Quality control for the guides includes sending customers emails with an invitation to rate their guides on a scale of one to five. Anything less than a five-star performance prompts customer service representatives to follow up with the guide, he said.

The tours are for higher-end consumers as they average about $678 each, although that can be for multiple days and it can include a vehicle and mileage.

Melhus and fellow principals Dave Vincent and Luciano Bullorsky each cashed in some shares as part of the transaction while other money will be pumped into the business over time and is dependent on meeting performance targets, Melhus said.

“Our typical group size is three to four people — you and maybe your wife and two kids, or maybe there are two couples or a group of friends,” Melhus said. “We don’t take unrelated people and stick them in a group.”

That distinguishes ToursByLocals from a wide range of travel agencies, which market niche tours to the general public and then send the customers together on the same tour.

“There’s an emergence of more and more outbound tour operators who are providing customized travel for small groups,” said Rod Harris, a professor at Royal Roads University’s School of Tourism and Hospitality Management.

He said he likes ToursByLocals’ business model, in which individual guides are listed online and customers are able to select guides and communicate with them in advance of the tour. Many travel agencies assure customers that they will have a guide but the exact guide is not known until the tour starts.

Harris, whose focus is financial management, stressed that the biggest issue for any travel agency is its income statement, and its ability to generate sufficient client transactions to cover operating costs. ToursByLocals’ ability to attract private venture funding hints that the balance sheet looks good, he added. 

gkorstrom@biv.com

@GlenKorstrom

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