Proof that a business based on happiness can change the world
Twenty years ago, a young entrepreneur set up a travel company that aimed to do far more than turn a profit. Despite the recent recession, it's never been more successful. Mary Novakovich meets its founder
Sunday 12 December 2010
Bruce Poon Tip was already on his fourth business when he launched Gap Adventures 20 years ago at the age of 23, with the help of two credit cards and some savings.
The Canadian's entrepreneurial streak first showed itself in his paper round as a 12-year-old, before he started to breed rabbits a year later. "It wasn't just breeding rabbits. You make it sound so cheap," he says in a mock-wounded tone. "I imported the first set of Dutch dwarf rabbits into Canada. I sold only the females and offered stud services for the males. I knew people would breed their own males eventually. Until then, I controlled the product."
The teenage Poon Tip was already showing two aspects of his business acumen that were to serve him well: spotting a gap in the market and controlling the product. He called his adventure travel company Gap Adventures because "it bridged the gap between mainstream travel and the backpacker", he says. (The clothing giant has been trying to wrest the name from him for the past four years in an ongoing legal battle.)
The need to control the product is fundamental to the company's business model. It means that Gap Adventures, which has become the world's largest adventure travel company, owns many of its assets, from ships in the Galapagos and Antarctic to the 38 offices around the world that operate the tours.
"My ethos has always been that if we offer an innovative or unique product, we have to be able to control the experience," he says. "Any other travel company will rely on a local operator to deliver on their brand. I can never do that. I don't even know how you can do that. Our brand is about creating experience and the most important thing is delivering that experience."
For the Gap Adventures traveller, the experience has always gone hand in hand with the benefits their custom can bring to the local community. Poon Tip has seen the industry go from ecotourism in the mid-1990s, when everyone was concerned about saving the rainforests, to today's carbon offsetters, whose claims to help the environment cause some confusion among consumers.
"There's a lot of 'greenwashing' in the industry. It's like the organic industry 15 years ago. The same thing is going on now with carbon offsetting," he says. "When you look at it closely, there's a lot of hocus pocus, because there are no true guidelines. I've spoken to five of the largest offsetters in the world and within five minutes I can make them very nervous. And all I'm asking them is questions about their businesses."
Poon Tip, on the other hand, always focused on sustainability in travel by organising tourism projects with local NGOs. Out of this grew women's co-ops, homes for street children and eye hospitals. In 2003, he took things a step further by setting up Planeterra, the company's not-for-profit foundation which promotes community development around the world.
"Back then, we were even against talking about it," he says. "We thought we shouldn't even be marketing it. But the consumer changed over the course of the past 15 years, and now they want to know what a company stands for. Buying travel is an emotional purchase for some. It wasn't 15 years ago, and it still isn't for 90 per cent of travellers. They want a Ryanair flight or a cheap deal. But a small, growing number, who purchase their travel more emotionally, want to identify with a company."
Poon Tip is on a flying visit to the London headquarters of Gap Adventures, between speaking at tourism conferences in the Gulf states and jetting to the South Pole. The 43-year-old is dressed, appropriately enough, in a Gap Adventures fleece; his casual style suits the gadget-filled office where the young staff seem to have every Apple product on the market. I'm shown an iPad that's playing a video, to give me an idea of what the company is all about. To the sound of the Jacksons' "Can You Feel It", staff from the company's offices around the world – from "base camp" in Toronto to Peru and India – film themselves dancing in unself-conscious joy. It's not your typical corporate video.
"We can deliver extraordinary experiences with happy people," says Poon Tip. "We have 800 employees on Twitter, and everyone gets time off in the morning and afternoon to tweet. We post them all live on our website. We convert it to what we call our happiness business model. I work bloody hard to keep our people happy. It's intertwined with our business."
It's a business that has passed the C$150m (£95m) revenue mark, and he won't get more specific than that. Even during the recession, while his competitors were frantically downsizing, Gap Adventures grew 40 per cent. It's an astounding feat considering the troubles that have plagued the travel industry this year. While the ash cloud caused havoc with European connecting flights to Africa and Asia, it was the floods in Peru and the rebellion in Bangkok that made life difficult, as those countries are the first and third most popular destinations for Gap Adventures. "The ash cloud was the least of our worries," says Poon Tip. "That was a much smaller problem than the Red Shirts in Thailand and the floods in Peru. They shut business. Full stop."
Similarly, three years ago, the company hit the headlines when its Antarctic ship, MS Explorer, sank in the freezing Southern Ocean. Its passengers and crew spent five hours in lifeboats before other vessels picked them up. Then they had to be flown from a tiny island to the Chilean mainland, and that's where disaster struck again.
"We had 154 passengers and we had a Hercules plane that carried 155 people to bring them back. When the plane arrived it was full of journalists who had paid the Chilean government for their seats. I had to choose who wasn't coming back," he recalls with a tinge of bitterness. "And I didn't know when I'd get a plane to go back there to pick them up. After what they'd been through."
His customers remained loyal, though, as almost all of them have rebooked an Antarctic holiday with him. He knows that paying compensation to that number of people is peanuts compared with what the giant conglomerates such as TUI Travel had to fork out because of the ash cloud.
As TUI continues to snap up smaller companies, I ask Poon Tip how that affects his business. "Every time they buy a company that's in my space we throw a little party," he says, smiling. "It's a great thing for us because that competitor disappears from our radar. As soon as TUI buys a company, it loses its soul." His smile disappears when I ask if he would sell Gap Adventures. "I'd never sell to TUI. We're doing extraordinary stuff right now, but we'd lose that edge. We'd just become another average company and I don't think that's where I would want to be."
The possibility of going public, however, is slightly different. "I've thought about it, only because it would be fun. It would be a kind of sexy company in a public frame," he says. "It would be great to have a public company that's based on happiness. I'd love that. But I think, long term, I'd be ousted by shareholders." He laughs. "There'd be a coup. But that would also be fun."
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