Flight Centre to establish global DMC network

Flight Centre to establish global DMC network

The Flight Centre Travel Group has announced it has plans to create a new global business that will provide in-destination services to travellers.

The plans, which are being implemented in conjunction with Vietnam’s Thien Minh Group (TMG) will see the companies:

  • Create a larger Asia-based destination management company (DMC) immediately by combining TMG’s Buffalo Tours business in Vietnam with smaller joint venture DMC businesses the two companies operate currently in 10 other countries.
  • Flight Centre will increase its equity in the new, larger venture
  • Flight Centre will acquire or launch similar businesses in other key regions in the short to medium-term to create a worldwide DMC network

Services provided by the DMC will include transfers, excursions and day-trips, arrangements for meetings and incentive groups and land arrangements for cruises and other tour groups.

The joint venture now operates in Indonesia, Singapore, Malaysia, Thailand, Cambodia, Laos, Hong Kong, China, Japan and Myanmar, with TMG also operating the larger Buffalo Tours in Vietnam.

Flight Centre’s Managing Director Graham ‘Skroo’ Turner said the deal, which has seen his business take a 58.5 per cent holding in the expanded Asia business (Flight Centre previously held 49 per cent of the smaller joint venture, which did not include Vietnam), represented the first major step to creating a global DMC.

“We believe that there are huge opportunities in the in-destination sector and it has become one of our key strategic growth areas for the future,” he said.

“Today’s agreement will fast-track our growth in this sector and establish the foundations for a global DMC that will deliver essential and valued services to travellers when they arrive at their destinations.

“In addition to adding the large and profitable Vietnam DMC to the successful operation, other benefits for the Flight Centre Group will include:

  • Greater control over product offerings and customer experiences in-destination
  • The ability to create new and unique products that can be sold through our global distribution channels
  • The opportunity to capture a larger share of the travel wallet, as Flight Centre has not traditionally targeted in-bound travellers during their holidays; and
  • Access to other new revenue streams, with the DMC to also provide services to third party businesses, including tour operators.

“We are also delighted that TMG will maintain an equity interest because it allows us to draw on the business’s proven expertise in Asia and in the DMC sector as we develop our global network.”

The Asia DMC is part of Flight Centre’s expanding in-destination travel experiences network, which also includes the company’s tour operating businesses, Top Desk and Back-Roads Touring.

The travel experiences businesses have been earmarked for further growth and are set to become the third major business pillar for Flight Centre, alongside global corporate and leisure travel businesses.

Further acquisitions are also in the works, with Flight Centre previously signalling its intention to consider hotel management opportunities or joint ventures in key markets in the future.

 

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