Travel Associates achieves record H1 profit and TTV

Value of average client booking increased approx 15% year-on-year

This week Flight Centre Travel Group announced a $106 million underlying profit before tax for the half-year to 31 December 2023, up a whopping 565% on the previous corresponding period.

FCTG’s leisure businesses accounted for $60 million (46%) during the period, which was double that of the result for the same period pre-pandemic in FY19.

Leisure total transaction value (TTV) for FCTG increased 18% to $5.2 billion, with the company highlighting scale benefits were achieved across mass market (Flight Centre), luxury (Scott Dunn, Travel Associates, etc), complementary (Travel Money, Jetmax, Ignite, etc) and independent brands (now pooled as Envoyage).

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In the Director’s Report, Graham Turner, CEO and Global Managing Director, said the expansion of FCTG’s luxury leisure collection – Scott Dunn, Travel Associates and Luxperience – was a “long-term strategic priority”.

The opening of Scott Dunn’s office in New York in 1H has now given the business a presence in both the US West and East coast markets, and Turner said that business overall “continues to trade in line with expectations and will generate the bulk of its FY24 profit during its peak 2H booking periods”.

Luxury TTV year-on-year experienced growth of 44%, aided partially by discounts on acquisitions.

Sofitel Adelaide

Alongside FCTG’s Asian corporate business, independent contractors and agency business (Envoyage) and Travel Money, the company noted Travel Associates and Scott Dunn are “businesses that are already delivering profit margins will above leisure’s longer-term target.”

Travel Associates achieved a record 1H profit and TTV of around $360 million, earning feedback from Turner who said the brand was a “very profitable business”. Scott Dunn’s TTV was circa $100 million, while Independents was huge at approximately $768 million.

Geoff Harris, Founder, Ashmore, Harris & James Travel Associates' 25th anniversary late last year.

Drilling down deeper into the results, LATTE can reveal that Travel Associates’ brand performance has seen the average client booking value increase and growth for advisors across the business, including in New Zealand.

Revenue margin in the luxury segment has increased due to a focus on higher-margin luxury products being retailed. Travel Associates has also had a high take-up of ancillary products, including its “Purple Ribbon” service.

What has assisted in that growth is an increase in the number of expert advisors aligning with Travel Associates in Australia and NZ, alongside a focus on sales of ‘true luxury’ products, local community focus and local events to heighten brand awareness and engagement.

The average booking per client for Travel Associates Australia is steadily increasing, up around 15% year-on-year. Travel Associates welcomed two new office openings, one each in Australia and New Zealand, and is focused on recruiting ‘the right new advisors in the right locations’.

Wolf & Turner Travel Associates, Travel Associates' 'Most Productive Business' last year.

In the product space, cruise sales for the Luxury Travel Collection soared by about 40% based on the same period last year. The volume of Signature Itineraries has increased a massive 12-fold, with an average price tag of $23,500 per person and driving higher enquiries.

LTC Members, which commenced trading on 1 December 2023, have generated around $100 million in sales, with FCTG forecasting rapid expansion in the second half of FY24 and an immediate pipeline of around the same figure.

Events and partnerships for the Luxury Travel Collection will continue to be a priority and this was highlighted with the launch last Friday of Galeries de Luxe.

“Travel Associates AU & NZ has delivered its best first half result in our 25-year history,” Rachel Kingswell, Director of LTC Independent Portfolio and GM, Travel Associates AU/NZ told LATTE.

“Our incredible advisors have yet again put their clients at the epicentre of all they do, which is reflected in strong customer feedback and loyalty, with an outstanding NPS of 85, and repeat customers at over 70%.”

Rachel Kingswell, Member Portfolio Director; Danielle Galloway, Global MD and Nikki Glading, Member Portfolio General Manager

Danielle Galloway, Global Managing Director of the Luxury Leisure Division FCTG, added: “The luxury travel market is growing faster than any other segment.”

“Our strong H1 results are reflective of the segment growth, our focus on higher margin products, and the new opportunities delivered by the Luxury Travel Collection’s comprehensive ecosystem.”

Returning to the Director’s Report and FCTG as a whole, Turner said: “Looking ahead we are well placed for the full year as we approach our busiest trading months. We have good momentum and early 2H trading has been strong.”

“Positive lead indicators have also emerged, with international capacity expected to be almost back to pre-pandemic levels in Australia by the end of FY24 and airfare prices decreasing – by an average of 13% in Australia recently and about 7% globally over the 1H.”

“After four years of disruption and then gradual recovery, 2024 is set to be a watershed for travel with various industry bodies, including IATA, predicting that the new calendar year will surpass 2019 as the busiest 12 months ever for travel,” Turner said.

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