Why REI’s Adventure Tourism Exit Signals Opportunity, Not Decline

Earlier this month, REI Co-op announced it was ending its entire Experiences business, which included adventure travel alongside classes and day tours. In total, 180 full-time employees and 248 part-time guides are being laid off, and refunds are being issued. 

President and CEO Eric Artz cited economic reasons for the decision. He revealed that REI Experiences has struggled to break even since before the pandemic.  

“When we look at the all-up costs of running this business, including costs like marketing and technology, we are losing millions of dollars every year and subsidizing Experiences with profits from other parts of the business. Even at our peak in 2019—our best year for Experiences ever—we did not generate a profit,” Artz said in a release.

Still, despite an iconic name in adventure stopping its travel business, other adventure tour operators that TMR spoke to are not concerned and that demand is still high for the segment. Rather than viewing REI’s struggles as a sign of softening interest, these companies see REI shuttering its 40-year-old Experiences business as a unique opportunity for growth in a robust industry.

Adventure Tourism Is Thriving 

Scott Cundy, co-founder and owner of Wildland Trekking, told TMR that the adventure tour segment is going strong.  

“Without question, [adventure tourism] is still an incredibly fast-growing part of the travel segment, and definitely profitable,” he said. 

Wildland Trekking is a small group adventure tour operator within Intrepid Travel’s portfolio of brands. The travel company specializes in a similar style of travel to what REI Adventures offered—in fact, Wildland Trekking covers about 74% of REI’s product offering with either the same or similar journey packages.

“The adventure travel industry is still a really, really great place to be, [with] lots of profit potential. It’s a service that people want,” Cundy added. 

Explore Worldwide is similarly seeing growth in the segment. 

Katy Rockett, a Toronto-based regional director for the sustainable small group adventure travel company, told TMR that the company’s wildlife and trekking tours are selling incredibly well.   

“The demand that we’ve seen is huge. Our trekking tours are up 48% year-over-year,” said Rockett. 

Why REI Adventures Shut Down

If adventure tourism is up, why did REI deem the venture unprofitable? 

The answer likely lies in how REI structured its Experiences arm. Artz indicated that the entire REI Experiences business was unprofitable—that included REI Adventures trips as well as outdoor classes and day trips. 

It’s possible that REI Adventures could have been profitable on its own. Regardless, the business had a disadvantage in the marketplace: REI is a massive brand, but its core business was retail not travel. To Cundy, this gives smaller travel companies an advantage when it comes to delivering tours.

“REI is a really well-known brand—a $2 billion-a-year outdoor retail company. But [travel] wasn’t their core business, and there are a lot of alternative companies that are really good,” said Cundy. 

This sentiment was repeated by Nicki Bruckmann, CEO and Founder of Explorer Chick—an award-winning travel company that empowers women through adventure tours. 

“REI’s exit from the space is not an indication of the segment as they are refocusing their efforts on retail/DTC. The adventure travel segment remains stronger than ever and continues to grow,” said Bruckmann.

Any disappointed travelers whose trekking trip was canceled may be able to find a similar offering elsewhere—with all the advantages that come with booking travel with a niche specialist.  

“We can’t match the size of REI, but what we offer is something truly unique: deeply personal experience with handcrafted itineraries with a passionate small team powering the experience,” said Bruckmann.

The end of REI Experiences is, undoubtedly, a sad conclusion to a long-running business. For the industry, it’s a bittersweet development: REI Adventures’ exit will leave a gap that can be filled by other, smaller companies that couldn’t previously compete with the giant’s marketing dollars and brand recognition.

“[REI Adventures’ closure] presents an unexpected opportunity for advisors and their clients to explore smaller, independent travel companies—companies you might not have discovered otherwise,” said Bruckmann.