Things over at Flight Centre are looking pretty peachy right now. Business is booming, forward bookings are tracking well and morale is high – especially when compared to just over six months ago. But post-pandemic, or AC (after COVID) as the brand likes to call it, things are quite different at Flight Centre.
One of the most noticeable changes at Flight Centre is the decrease in bricks and mortar stores.
At a recent media event in Sydney, Flight Centre managing director Andrew Stark said there were now just 408 physical FC shops around the world.
“In our heyday, that was over 1200,” he remarked.
Most of its stores, unsurprisingly, sit in the southern hemisphere across Australia, New Zealand and South Africa.
But what Flight Centre has lost in face-to-face business, it has recouped – at least partly – in online sales.
“Online bookings are growing really rapidly for us,” Flight Centre General Manager Brent Novak said at the intimate event, attended by Karryon.
“And we’re actually growing almost three times the rate online … although the store network is performing really well.”
Novak said BC (before COVID) around 85 per cent of the brand’s business was done in-store, with 15 per cent conducted online.
Now, Flight Centre was starting to see a roughly 75/25 ratio, he said, with the brand’s ultimate aim to split the business 60 per cent through face-to-face, 20 per cent online, and 20 per cent through specialists.
The Flight Centre GM added that 80 per cent of all online bookings were made for domestic travel, while the opposite was true for in-store business, which attracted 80 per cent international bookings.
According to Novak, females represented 31 per cent more than males in stores during 2022.
Eggs in three baskets
While online bookings were rising, basket sizes – i.e. the number of products sold in a single purchase – were still markedly different between in-store and online business.
“One thing we’ve also seen with our channel optionality is differentiated basket sizes,” Stark said.
“And what we mean by that is we see a basket size online of around $1,000. We see basket sizes in our shops growing month-by-month and the average last month was $5,500. And we see our specialist basket sizes getting over $8,500. Now those are sizeable basket sizes.
“So with the differentiated channels, we obviously get a younger demographic on our online channels, who spend far less. But as they grow up through the brand or they’re wanting to spend more we see more of that trust coming through our bricks and mortar and more of that trust coming through our specialist teams.”
Stark said that while Flight Centre would remain famous for its flights, it was crucial it reached beyond that. In short, it wants to be a “travel centre”.
“We realised in the world ahead, we want to be a four-plus component brand. And what that means is we want to sell a flight; we love to sell a holiday; we love to sell a cruise, a tour, an insurance policy and so on.”
Find out what Stark means when he talks about the “Renaissance of the travel agent”.
