ITIC Americas 2024 | Adventure travel – a growth industry, but what are the implications?
Iván Eskildsen, former Minister of Tourism, Daniel Durazo from Allianz Partners USA and Edmund Santiago from Redbridge discussed the latest trends and statistics surrounding adventure travel and asked if people are seeking ever more extreme experiences from their holidays
The ITIJ team have been reporting live from ITIC Americas in Panama this week (5 March 2024) sharing the discussions that took place at the conference. Read all reports
Iván Eskildsen, former Minister of Tourism of Panama,was the first to take to the stage. He said that the Adventure Travel Trade Association (ATTA) defines adventure tourism as having at least three of the components of nature, culture, and activity and that these together create the traveller experience.
He went on to say that adventure tourism is sustainable tourism, and that under that umbrella is: ecotourism, active travel, nature-based tourism, conservation travel, and outdoor tourism.
Eskildsen added that adventure travel is not only about extreme ‘hard adventure’ activities, and that common activities offered by adventure travel operators include ‘soft adventure’ and specialised activities from trekking to sailing, birdwatching to yoga retreats and mindfulness retreats.
He said that the international adventure travel market size has risen hugely, and that in 2017 it had risen to US$683 billion, up 21% CAGR from 2012. The average spend per person on an eight-night trip is $3,000, 76% of which is spent with a local supplier.
Eskildsen said that this year, hiking/trekking/walking has returned to the top trending activity, that cultural activities have become much more popular, and culinary/gastronomy and mountain biking have also become more popular. Camping and canoeing were more popular in 2022 than in 2021, returning to 2020 levels. Backpacking, horseback riding, and snorkelling have also increased in popularity.
Eskildsen said 85% of adventure industry tour operators have a documented safety and risk management plan, an increase from 2021 (77%) and 2020 (72%).
For businesses, employee retention (including benefits, wages, etc.) has been the primary focus, followed by marketing.
Eskildsen went on to talk about adventure travel in Panama, and that the Panama Sustainable Tourism Master Plan 2020–2025 established nature and culture tourism as high priority tourism products. Panama launched a ‘1,000km of Trails’ project to develop the outdoor adventure travel industry nationwide by 2030. One of the routes – La Ruta de la Caldera – has been recognised by National Geographic on its list of the ‘Coolest travel adventures for 2024’.
The Adventure Travel World Summit 2024 will be held in Panama in October, organised by the ATTA and Panama.
Edmund Santiago, Chairman and CEO of Redbridge,began by saying that adventure travel and extreme locations come with inherent risks that are challenging the insurance industry.
When offering adventure travel policies, especially for extreme locations, he said, companies have to understand the importance of conducting risks assessment thoroughly.
Through risk assessment, travellers can identify potential hazards, assess their capabilities and make informed decisions about their coverage and to reduce their risks.
Santiago said they assess risks based on three sectors: land-based adrenaline (rock climbing, caving etc.), snow and ice-based adrenaline (snowmobiling, glacier trekking etc.), and air-based adrenaline (base jumping, paragliding, etc.).
Travel insurance companies structure activity classification into risk categories based on factors such as physical exertion, environmental conditions, and inherent danger.
Santiago said that they assess risks by establishing underwriting guidelines specific to adventure travel, which outline the criteria for assessing risks and determining the right coverage, and that parameters and limitations taken into consideration should be the traveller level of experience, safety precautions, destination risk level, and the presence of experienced guides or instructors.
He added that they also assess risks by executing actuarial analysis, which involves the use of statistical models and historical data to estimate loss and set premiums.
Santiago said that surveys can also be useful, as can location evaluations when it comes to assessing risk. Aspects such as political stability, crime rates, natural disaster frequency and access to medical facilities should be taken into account.
He said they also assess through consultations with experts in adventure travel, and by educating adventure travellers and equipping them with knowledge.
Santiago went on to talk about extreme locations like polar regions and deep-sea environments, and how these present unique challenges for risk assessment.
He advised that to achieve better risk metrics for extreme destinations, businesses should:
- Invest in advanced data analytics technologies and predictive modelling techniques
- Use remote sensing technologies
- Collaborate with geology, meteorology, ecology and emergency medicine experts
- Explore the use of crowdsource; develop comprehensive risk indices for extreme destinations
- Implement systems for continued real-time monitoring
- Invest in education and training programs for travellers, tour operators, and insurance agents
- Offer flexible and customisable insurance policies.
The dynamic nature of adventure travel requires insurance companies to continuously evaluate and adapt their risk assessment strategies.
Santiago finished by saying regulatory bodies play a crucial role in ensuring insurance companies adhere to ethical and transparent practices in risk assessment and pricing. Regulations may evolve to address emerging risks and protect consumers’ interests.
Daniel Durazo, Director of External Communications at Allianz Partners USA,started his talk by referring to theATTA’s 2023 Industry Snapshot Report.
It showed that:
- Trips were 65% full, up from 52% the previous year
- The average number of travellers served by adventure industry tour operators was up 213% from the previous year
- Consumers want new experiences – to travel off the beaten path and to travel like locals.
The report also showed the trending destinations, which included the Mediterranean, Western Europe, South America, Scandinavia and Central America. The top activities are hiking, cultural trips, biking and safaris. Some 74% of operators/respondents expect net profit to be equal or better in 2023 compared with 2022, and 43% of respondents are seeing an improvement in domestic travel, with 87% seeing improvement in international travel.
The ATTA’s 2024 Industry Outlook report asked respondents what trends are top of mind for 2024, and to select which trends will impact adventure travel/tourism the most. Sustainability came in highest at 59%, overtourism 56%, and off-season travel/off the beaten track travel at 53%.
When asked what issues are top of mind for 2024, respondents said:
- War and conflict – 64%
- Climate change – 55%
- Political tensions – 46%
- Natural disasters – 46%
- Economic stability and inflation – 43%
- Transportation issues – 16%.
Durazo agreed that adventure travel takes many forms, from trekking to kayaking, horseback riding to cruising.
He went on to talk about a recent survey they carried out in May 2023, and included 2,010 Americans aged 18 plus. For the purposes of the survey, a vacation was defined as a leisure trip of at least one week to a place that is 100 miles or more from home.
The survey found that vacation spend and confidence are at an all-time high, and Americans plan to spend $214.1 billion on vacations this summer.
To finish, Durazo spoke about a new trend: ‘paycations’ – the trend to work and holiday simultaneously. He said three out of 10 Americans will choose to work remotely from a vacation destination this year, and that 42% of 18- to 34-year-olds are likely to travel to a vacation destination to work remotely.