With the doom and gloom of the pandemic years behind them, there’s a real sense of optimism within Flight Centre Travel Group’s (FCTG) leisure brands.
Most significantly, consumer demand is back – and that shows no signs of abating. But how exactly is FCTG Leisure’s customer base tracking?
The group gave some insights into its global leisure travel business at an FCTG investor strategy session in Sydney this week, hosted by FCTG Leisure Global CEO James Kavanagh.
Within FCTG’s core global leisure brands – mainly flagship brand Flight Centre and luxury brands Travel Associates and new acquisition Scott Dunn – FCTG Leisure boasts a total customer base of 28 million, with Flight Centre clients accounting for more than half (15 million) of all customers.
And customer satisfaction is high. Within Flight Centre, Travel Associates and Scott Dunn, repeat customers account for more than 50 per cent of all business.
FCTG’s luxury brands in particular see a high rate of return patronage, with repeat customers at Travel Associates and Scott Dunn making up 70 per cent and 65 per cent respectively of client bases.
The average age of customers is decreasing slightly as well, but still sits at over 50 years for all three brands.
Perhaps most importantly, the average booking value is growing across all three brands, with Flight Centre clients spending an average $3,300 per booking, Travel Associates customers spending $13,800, and Scott Dunn customers spending a whopping $45,000 on average.
Among trends within Flight Centre stores, the monthly international basket size is growing steadily, solo and couple travel is returning more quickly than family travel, and the average lead time has reduced to 122 days (compared to 162 days in the prior year).
New operating model
Interestingly, the number of bricks and mortar FCTG Leisure stores has dropped by 64 per cent, from around 1,500 in FY19 to just 543 in FY23.
The number of FCTG Leisure consultants has also fallen by 64 per cent, from approximately 9,800 in FY19 to around 3,500 in FY23.
Independent agents however bucked this trend, growing by 44 per cent from 975 to 1,400 globally.
Online total transaction value (TTV) is also expected to rise from $1.3 billion in FY19 to around $1.6 billion in FY23.
The plus side of this rightsizing is that FCTG expects productivity to rise from about $7 million to $13 million per store (based on average TTV).
Leisure business is also expected to shift further towards Australia and New Zealand, with ANZ expected to generate 78 per cent of TTV in FY24, compared to 74 per cent in FY19.
Flight Centre Global Managing Director Andrew Stark recently called the boom in travel advisor business the “Renaissance of the travel agent”. In this exclusive chat with Karryon, the Flight Centre MD talked about what’s next for FC agents.
Last weekend, Karryon attended Travel Associates’ Luxury Business Leader Conference in Singapore.
Karryon also attended FCTG Independent Australia’s first overseas conference in three years in March.
Read our in-depth interview with FCTG Global Leisure CEO James Kavanagh.
And check out our preview (or at least everything we know so far) of FCTG’s Flichella 2023 music festival.
