The Coronavirus pandemic has had a massive and sector-changing effect on the travel industry.
Although (touch wood) we seem to be through the worst of it now, COVID has undoubtedly changed how we travel, and its effects will be felt for many years to come.
Unfortunately, a number of travel companies have fallen by the wayside as a result.
So it is unsurprising that people are asking if G Adventures will go bust. After all, it is an important player in the travel industry.
So let’s take a closer look.
Will G Adventures Go Bust?
Whilst the Coronavirus pandemic has affected G Adventures like any other travel company, the signs are it will benefit from the predicted expansion of the travel and tourism industry over the next two or three years. It has recently announced a range of new trips for 2023 and an intention to “embark on a spate of acquisitions”.
COVID and the Travel Industry
Before we delve into the subject of G Adventures’ solvency, let’s take a look at a few headline points on how COVID has affected the travel industry:
- In the first six months of 2020 tourist arrivals dropped by 65 per cent.
- In the summer of 2020 Caribbean tourist hotspots Barbados and the Seychelles had a 90 per cent drop in tourist arrivals.
- Commercial flights dropped by 42 per cent in 2020.
- It is estimated 142.6 million jobs in the tourist industry were lost in 2020.
- As of the summer of 2022, tourist arrivals in the Americas and Europe still remain 46 percent and 43 percent below pre-pandemic levels.
- Companies such as STA Travel, Thomas Cook and FlyBe have gone out of business.
The good news is that there are signs that the industry is returning to pre-pandemic levels.
According to Julia Simpson, President and CEO of the World Travel & Tourism Council, it is estimated the travel and tourism industry will generate around between $8.4 trillion and $8.5 trillion (€8.1 trillion to €8.2 trillion) in 2022, just under a $1 trillion below pre-pandemic levels of $9.6 trillion (€9.3 trillion).
But what about G Adventures?
Perhaps the easiest way to assess the impact of the pandemic on G Adventures is to look at its most recent set of financial statements.
The most recent set of financial statements for G Adventures can be found on the gov.uk website and are for the year ended 31 July 2021.
But to save you reading through all 31 pages of the report, I have done just that to delve deeper into whether G Adventures could go bust.
The headline news is the fact G Adventures reported a loss after tax of £290k ($356k) for the year ending 31 July 2021.
This was in contrast to a profit of £1.26million ($1.55million) for the year before.
However, it should be noted that of that previous year, running up to 31 July 2020, two-thirds of it were prior to any COVID travel restrictions being introduced.
In light of the stringent travel requirements for travel through 2020/21, this loss should not be too concerning, in fact it is fairly moderate in comparison to some of its competitors in the market.
In the report, G Adventures also outlines future strategies to increase direct sales and to “continue to evaluate ideal target countries for travel”.
G Adventures also has the financial support of its parent company, the Altun Group (also known as the Global Group).
The company’s financial statement shares how its parent company entered a number of arrangements to secure long-term financing for the future operations of G Adventures (page 6 of the financial statement).
One slight cause for concern appears on page 9 of the financial statement, in the independent auditor’s report.
They say:
“There is uncertainty as to the ability of the Global Group to provide support as expected and uncertainty over forecasting how trading and cash flows will recover. As stated in note 1, these events or conditions, along with the other matters as set forth in note 1 to the financial statements, indicate that a material uncertainty exists that may cast significant doubt on the group and the company’s ability to continue as a going concern.”
The statement goes on to report a loss of just over £100k ($122k) for the Altun Group (Global Group) at the end of July 2021 compared to a profit of £817k ($1million) in 2020.
However, it should be noted the report shows there is still £7million ($8.6million) in its profit and loss account.
Actions Speak Louder Than Words: Future Plans
The real evidence of the future direction a company is headed in usually comes from the action it takes in terms of uncertainty rather than the stilted words of a financial statement.
In this case, I think we can definitely be optimistic about the future of G Adventures.
In September 2022 Travel Weekly carried a report on how the company was “poised to embark on a spate of acquisitions” using funds acquired for Certares, a large investment company.
The article said that Certaes had made $50million available to G Adventures, with the investment company getting equity in any acquisitions G Adventures make.
At the end of the piece Bruce Poon Tip, who is the CEO of G Adventures revealed the first acquisitions could be announced in the next 60 days.
And right on track…
This was followed up with another piece in Travel Weekly on 22 November 2022 revealing that G Adventures had made a “significant financial investment in travel technology start-up, Reforest, to support the planting of trees to tackle the climate crisis.”
Earlier that month G Adventures had also unveiled its new itineraries for 2023.
These include:
- The Many Sides of Mexico: Puerto Vallarta to Oaxaca
A two-week trip from the Pacific coast to the heartland of Mexico loaded with culture, music, food and the iconic Aztec pyramids of Teotihuacan. - The Moroccan Coast and Marrakech
An eight-day adventure starting and ending at Marrakech and taking in a traditional meal at a souk, tea with locals at Berber Village and some beach time at Oualidia. - The Best of Italy: Tuscany, Cinque Terre & The Almafi Coast
A 13-day tour of some of the most stunning sights in Italy, with the beautiful cliffs of the Amalfi Coast and Renaissance masterpieces in Florence all on the menu along with much more. - Hiking Southern Iceland
A six-day adventure featuring some of the most epic scenery of one of the most beautiful countries on the planet, encompassing everything from huge glaciers to black sand beaches.
So it seems obvious to me that G Adventures are planning for the future.
To find out about these plans visit the new tours section of the G Adventures website.
Final Thoughts
Although many travel companies have gone bust during the pandemic, the vast majority of these came in the first 24 months.
In the last 12 months or so, travel restrictions have been continually eased and the world has been opened back up again.
If G Adventures were going to go bust it would likely be in those first two years, but it is still here investing in new companies and planning new trips for 2023.
That is obviously a good sign.
It has ridden the crest of the storm and with predictions that the travel and tourism industry will continue to expand and return to, if not exceed pre-pandemic levels, in the next couple of years it looks like its future is secure.