How two backpackers created a $300 million-a-year global travel empire

IT ALL started with a gap year and a crazy idea. Now these two uni mates are running a $300 million-a-year global empire.

IT ALL started with a gap year and a crazy idea — and made two backpackers rich.

University mates Geoff Manchester and Darrell Wade were putting their Commerce degrees to respectable use, but something was missing.

So, in 1988, they chucked in their respective jobs in transport and retailing to travel the world in intrepid style.

Banding together with a group of like-minded friends, the Melburnians chucked in to buy an old council tip truck, stripped it down to nothing and rebuilt it as an overland vehicle.

Then they shipped the vehicle to London, and spent six months driving it through Africa, having the adventure of a lifetime.

And they began dreaming of a way to combine their entrepreneurial ambitions with their love of the great escape.

“We felt like there was a niche in the market, an opportunity to help people who weren’t confident enough to go backpacking by themselves,” Mr Manchester told news.com.au. “Did they just have to go to resorts, or on bus trips with 50 other people?”

Geoff Manchester, left, and Darrell Wade plotting world domination in the early days. Picture: Supplied

Geoff Manchester and Darrell Wade with Intrepid Group chief executive James Thornton (L-R).

The following year, Intrepid Travel was born, billing itself as the way for travellers to “get to know a country as it is, warts and all”, while offering the assurance of decent accommodation and well-organised transfers.

Almost three decades later, the Intrepid Group has 1600 employees worldwide and takes 250,000 people on trips every year across its stable of tour companies.

“As a backpacker, you’d have days when everything goes wrong, but then something would be fantastic at the end of it,” Mr Manchester said.

It’s this adventurous streak that became the company’s “unique selling point — although we didn’t know what that term meant at the time.”

While they lacked any previous experience of the travel industry, he said, “we just decided to start a business we didn’t know anything about”.

And this lack of familiarity helped shape Intrepid Travel into an entirely different business model from what had preceded it, taking a more hands-on approach.

“We didn’t approach the travel industry in the orthodox way, where tour operators were outsourcing trips to local companies overseas,” Mr Manchester said.

“At the beginning, Darrell was doing sales and marketing while I led groups through Thailand, Borneo, Malaysia and Indonesia.

“Then we opened a business in Vietnam and employed tour leaders there who did all the buying of hotels and transport there paying all the accounts right there. That worked really well, so we started rolling out around the globe.”

A love of adventure sparked the idea for Intrepid Travel. Picture: Supplied

It all started with a trip around Africa in a converted council tip truck. Picture: Supplied

Intrepid now has 22 businesses it either owns outright, or operates as joint ventures, around the world.

“That’s a unique way of working in our industry, and it gives us really good control over both the quality of the tours, and the cost of running them,” Mr Manchester said.

While the company is now enjoying a purple patch, this month inking a multimillion-dollar deal for a joint venture in Antarctica, things have not always been so easy.

After enjoying rapid growth in the nineties, the 2000s brought with them a slew of major challenges for the travel industry: 9/11 and the Bali bombings ushered in a new era in which the threat of terrorism began to loom large, while SARS and bird flu hit hard.

In the early days, the biggest challenges were securing distribution among travel agents and managing cashflow, Mr Manchester said.

“One hurdle faced by many small business is not having enough capital,” he said.

While travellers paid for their trips upfront, Intrepid had to find enough cash to put out new brochures every year.

“Sometimes we had to negotiate with the printers to pay half in cash upfront, and the other half once we’d generated an income from them,” he said.

Getting local travel agents to promote their tours proved tricky at first, and he quickly realised that international distribution would be key to scaling the business.

These days, only 45 per cent of Intrepid’s customers are Australian, with the United Kingdom, United States and Germany among popular countries of origin among its diverse travellers.

Intrepid aimed to help people get off the beaten track while backpacking in relative comfort.

Running an international tour company comes with inherent risk, and Intrepid has had to deal with its fair share of disaster.

When the Nepal earthquake hit in April 2015, there were about 180 employees and travellers on who had to be accounted for.

“We had to find out if they were all okay, they were spread out all over Nepal so we had to bring them back to Kathmandu and have somewhere for them to stay,” Mr Manchester recalled.

“We were very fortunate our people on the ground were able to organise a tent city on the grounds of one of the hotels.

“Then it was about getting them all out of the country as quickly as possible. Fortunately no one got hurt, but it was a test of our processes to overcome a major event.”

Intrepid ended its four-year partnership with British multinational Tui Group in 2015 and is once again privately owned, with its co-founders holding the majority share.

The company has 250 staff at its Melbourne head office, but Mr Manchester regards its 1600 global employees — most of them tour leaders — as Intrepid’s greatest asset.

“For us, they’re the most important people in the business as they are the face-to-face with customers,” he said.

As for the former backpacker, his travel commitments are these days more likely to take him to Toronto, Los Angeles or London.

“But I also get to do really fun trips as well, like East Arnhem Land,” he said.

“I get to do some really interesting things.”

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Originally published as How two backpackers created a $300 million-a-year global travel empire