How Tom Hale built Backroads into a global active travel company

Executive overview

Most travel companies chase investors. Tom Hale built Backroads for 46 years without a single outside investor.

A midnight epiphany in Las Vegas led a desk-bound city planner to quit his job in 1979 and launch bike tours with four guests, no revenue, and borrowed capital from family.

The business model worked because guests paid deposits months in advance while hotels were billed after trips ended — a structural cash-flow advantage that funded growth without external capital.

Choosing work you love isn't enough — you have to love the actual job, not just the subject.

From midnight idea to first trip

• Tom quit a Las Vegas city planning job six months in, despite seven years of education for it
• A 2 a.m. epiphany prompted eight pages of notes on what bike touring would require
• A solo 5,000-mile reconnaissance loop through the American West shaped the first routes
• First trip: four guests, Death Valley, camping, 50+ miles per day, Dutch ovens for cooking
• Revenue came from classified ads in Bicycling and Outside magazine; side income from washing fondue pots at night
• Early partner Linda Petty left after two and a half years — the grind outweighed the upside

Building the operation

• Bikes stored in a Berkeley house basement rented for $135/month including the "office"
• Bikes stolen from warehouse; Tom recovered them by confronting the thief directly
• Logistics handled with notepads — now tens of millions in technology spend
• Shifted from camping to hotels in year two; hotel trips quickly became the majority
• Revenue model: deposits collected months early, hotel bills paid after trips end
• $30,000 in short-term family loans bridged seasonal cash gaps; always repaid

Expansion and the leader model

• Expanded to Hawaii (1984), New Zealand, Baja, Bali in quick succession
• Name changed from Backroads Bicycle Touring only after 15 years; brand clung to "biking" long past the reality
• Now one-third biking, one-third hiking, one-third multi-adventure
• Leaders are employees, not independent contractors; housed between trips
• 10-day leader training program replaced the wasteful combined hire-and-train format
• Guest surveys evolved to rate hotels, restaurants, and local guides separately
• ~1,300 employees; repeat and referral business each account for roughly one-third of revenue

Surviving downturns

• 9/11: lost business in the peak September month but ran trips for guests already en route
• 2008 financial crisis: 43% revenue drop, significant layoffs
• Response to 2008: retooled service ratio — two leaders instead of one, two vans instead of one — and raised margins by articulating what made Backroads better
• COVID: near-total revenue stoppage for roughly a year; temporary layoffs, pay cuts, later made up
• Recovery from COVID was faster than competitors; 2022 bookings surged as guests were eager to be outside
• Each crisis reinforced the same lesson: exit the downturn stronger than you entered it

Scale and philosophy

• Now offers ~5,000 trips per year across 60+ countries
• Guests ride at their own pace — groups never travel as a visible pack
• Avoids Instagram-heavy destinations; sometimes shifts trip timing to beat crowds
• E-bike options added and became popular; a no-e-bike track now offered for guests who want the traditional experience
• Tom attributes the initial idea to luck; attributes the company's scale entirely to the grind