Flight Centre to create DMC with Vietnam partner

By admin


Flight Centre is to take greater control of its on-the-ground product across Asia through the creation of a joint venture with a Vietnam-based destination management company.

The deal will see Flight Centre work with Thien Minh Group (TMG) to grow its Buffalo Tours destination business in existing markets and expand into Indonesia, Malaysia, Singapore, Hong Kong, China and Japan.

Buffalo Tours already operates in Thailand, Laos, Cambodia and Myanmar.

The move is in line with Flight Centre’s strategy to own and control the vertical chain rather than simply be a travel agent. The JV will replace arrangements Flight Centre has with a number of local DMCs.

Flight Centre and TMG will initially contribute $US1.5 million, with Flight Centre taking a 49% interest.

The JV will be based in Singapore and offer a range of tours, excursions and transfers across the region.

Flight Centre managing director Graham Turner said establishing a DMC has been of interest “for some time” and was a logical step for the group.

It will provide a new revenue stream for Flight Centre and give greater control of its product, he said.

“This move is aligned with both our acquisition strategy of expanding vertically into capital-light travel industry sectors and our aim of owning more of the product we sell, rather than always being an agent or middleman,” Turner said.

The JV does not include TMG’s Buffalo Tours Vietnam operation although the existing relationship will be extended. Flight Centre will work to “grow sales for Buffalo Tours in Vietnam and, in return, will receive a share of the profits generated”.

The JV is subject to conditions. The Thailand, Laos, Cambodia and Myanmar DMCs are expected to be transferred into the JV towards the end of the calendar year.

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