Flight Centre buys into hotels, DMCs to nab “larger share of travel wallet”
Just days after Flight Centre updated its forecast for its financial year pre-tax profits to as high as $330 million, as well as announcing a number of job cuts to mid-high end support roles, comes this announcement.
Flight Centre Travel Group now does hotels, after they aqcuired a hospitality management company that they’re calling a “low-risk entry” to the market.
And hey, while they’re at it, they’re adding to their destination management company (DMC) offering, which already got a headstart by expanding its stake in its 2014 Buffalo Tours venture.
The company today announced it has secured separate deals to acquire Olympus Tours, a leading Mexico-based DMC, and Bespoke Hospitality Management Asia (BHMA), an emerging Thailand-based regional operator of design and lifestyle leisure hotels.
Wowza!
Both businesses will become key additions to Flight Centre’s rapidly expanding in-destination travel experiences network, headed by Brisbane-based Nick Lucock.
Founder and Managing Director Skroo Turner had hinted at the new business ventures in the latest financial outlook, saying the areas of hotel management and DMCs hold great opportunity for expansion and revenue.
Today, he added, “Expanding our in-destination network is a key global strategy and we are starting to develop strong foundations in this sector through our tour operators, DMCs and hotel management businesses.
“Olympus is an important addition to this network and gives us a DMC in the Americas, to complement our recently expanded presence in Asia, while BHMA provides us with a low-risk entry to hotel management, a sector that we have identified as a key future growth opportunity.”
Turner added that by expanding in this in-destination area, they gain a number of advantages, with possibly the most important being “the opportunity to capture a larger share of the travel wallet”, with Turner admitting FC has not typically captured the biggest chunk of in-destination spend.
In addition, Turner said the acquisitions meant the company had “greater control over the customer offering” and the “opportunity to capture additional margin through vertical integration”.
It also provides the capacity to create new and unique products which Turner says can be sold through FC’s global channels.
Turner was also excited about the “access to new external revenue streams”, which include sales to other travel groups and providing DMC services to tour companies and groups.
Flight Centre has been tiptoeing into the DMC market since 2014, when it initiated a joint venture with Vietnam’s Thien Minh Group. It operated in 10 Asian countries, and also included TMG’s buffalo Tours business in Vietnam.
Earlier this year, FC bought a bigger – 58.5 per cent bigger – stake in the venture, and put plans in place to increase this ownership in 2018.
The company has also been pursuing hotel management in key global markets, but not actioned anything yet.
“This is a logical step into hotel management and will deliver numerous benefits,” Turner added.
Turner explained that through acquiring BHMA, FC will snag a business that’s been growing steadily since it started, and has recently taken on larger properties, meaning it fits with FC’s long term expansion goals and is globally scalable.
The acquisition also comes with the expertise of “people and processes that we can draw upon to expand our hotel management operations in Asia and into other key regions, including Australia, the South Pacific, Europe and the Americas,” Turner added.
Flight Centre’s in-destination products also include the Top Deck and Back-Roads touring businesses. With the combination of Buffalo Tours and Olympus Tours DMCs, the revenue of both hits around US$100 million annually.
Email the Travel Weekly team at traveldesk@travelweekly.com.au
-
Latest comments
Latest News
ANZAC Battlefield travel on the 2025 bucketlist
As Anzac Day dawns, agents prepare for a surge in bookings for the 110th anniversary of the Anzac Cove landings.
Former Channel 9 Getaway host and founder of TRIBE Jules Lund to speak at Travel DAZE
From blond-tipped travel reporter to Travel DAZE speaker, Jules Lund cuts through the BS.
HX’s Roald Amundsen finds aliens in the Antarctic
Forget whales, HX's MS Roald Amundsen captures aliens in the Antarctic - and they're not pretty.
Mayhem in France as 70% of flights face cancellation
I mean it wouldn't be France if there wasn't at least one strike.
Etihad Airways launches double-decker service with world’s only in-air three-room suite
We imagine falling asleep in the three-room suite is superior to falling asleep on your neighbour's shoulder.
Norwegian Cruise Line launches 2024 Europe travel season
Europe certainly has a lot of ports. Its time for Australia to up its game.
“The power of travel for positive change” – Intrepid’s Jenny Gray hails controversial all-women Saudi Arabia trip
There is an awful lot to love about this tour from Intrepid. Where do we sign up?
Princess names the Sun, unveils Sanctuary Collection + Star Princess to Alaska in ’26
A huge bottle of Veuve was smashed into the side of the ship to make things official. So no, we couldn't snag a glass.
Collette special offers across peak northern summer season
If you are craving a trip to Europe then grab this deal with both of your grubby hands.
Air India and All Nippon codeshare between the two countries
Here at TW we agreed that the photo would have worked better if they had swapped planes.
A&K offers minimum 18 weeks paid parental leave
Contrary to what the photo suggests this benefit is only applicable for humans. Back to work Mrs Jumbo.
NH Hotel Group rebrands as Minor Hotels Europe & Americas
Hang around the bends of the hotels. We imagine they will be full of a lot of branded content.
Scenic Eclipse II – the business of creating unforgettable life-changing memories
These cruise brothers from another mother offer a view of cruising on Scenic Eclipse II that is poles apart.
MSC builds new hospital ship with Mercy Ships
If you want to read a story that puts a smile on your face then this is the one for you.
“I peed on myself watching this” – Social media users squirm at Royal Caribbean’s Harmony of The Seas 55ft dive video
TW is not responsible for any involuntary actions your body might have after watching this video.
FLIGHT REVIEW: Qantas Boeing 787 Dreamliner business class
The real bonus is you're unlikely to be around screaming children. Hoorah!
Traveltek offers travel agents new rapid deploy cruise website
As always, if you have any issue with the platform, just turn it off and on again.
Experience whale watching & classical music at the Australian Festival of Chamber Music in Townsville
Disappointedly, the whales do not start singing in tune with the orchestra. Opportunity missed.
Fond, very Fond. London hotel famed for James Bond link adds ‘Classic Comforts’ lunch menu
James Bond author Ian Fleming was so fond if this hotel, it inspired the legendary phrase ‘shaken, not stirred’.
What sets Eclipse Travel apart with Africa expert Hilary Dubyk: Travel Weekly TV
If you want to know more about Africa, then Hilary Dubyk is your person.
Surge in Australians visiting Japan
Feel like all of your friends have just returned from Europe? Now it's Japan.
Seabourn announces Western Kimberley Traditional Owners as Godparents of Seabourn Pursuit
Seabourn has named Western Kimberley Traditional Owners, the Wunambal Gaambera, as Godparents of the ultra-luxury purpose-built Seabourn Pursuit. It is the first cruise line to appoint Traditional Owners as godparents of a ship. Seabourn Pursuit embarks on its inaugural season in the Kimberley region this June. The naming ceremony will take place on Seabourn Pursuit’s […]
Sydney named 17th best place to work remotely
If you struggle to get a seat within Sydney's coffee shops, you now know why.
W Melbourne grows sales team
We appreciate the thought that has gone into this team photo.
Cunard welcomes new ship Queen Anne
This might be the most impressive ship handover in ship handover history.
Intrepid Travel appoints Yvette Thompson as general manager sales & marketing ANZ
It isn't end-of-day Monday and Yvette Thompson has already nabbed herself an impressive promotion.
Anna Fawcett re-joins Global Touring in newly-created APAC role
With such an impressive CV, Global Touring is no doubt thrilled to have Fawcett back.
“We know our response has been far from perfect” – Emirates’ open letter following Dubai flooding
If you also need to write an apology letter, then this is a pretty good template.
Malolo Island Resort opens brand new Spa
Fiji’s Malolo Island has added another string to its bow – opening its $1.3 million day spa on Thursday, 18th April 2024. (Lead Image: matriarch Rosie Whitton with spa staff) Located at the edge of the resort’s luscious patch of tropical rainforest, the new “Leilani’s Spa” adds another level of elevated experiences to Malolo’s already […]
Virgin Australia’s HILARIOUS second instalment of the ‘Bring on Wonderful’ campaign
We don't use the word 'hilarious' lightly, but this is worthy of the title.
Visit Sunshine Coast reveals new brand identity
If you were looking for another reason to visit the Sunshine Coast then this is it.
Sofitel launches brand campaign starring Sex Education’s Gillian Anderson
We can confirm the content of this video is less spicy than Sex Education.
Holland America Line gives agents the chance to visit Alaska on 11-day Famil
If you've ever wanted to see a Polar Bear (and who doesn't?), now is your time.
More than 65 luxury agents gather in Sydney for Best of the Best dinner
This looks like a fabulous do. We imagine there may be a few (or maybe 65) sore heads this morning!
Globally-renowned chefs gather for Vivid Food 2024
As a human, we agree that food is a fundamental part of the human experience. Some might say the most fundamental.
Air New Zealand returns to Hobart and Seoul
If you notice an uptick in Kiwis making their way through the Mona, you know why.
Should Flight Centre look to operate charter flights as well, or are fares too cheap with the coming recession ?