The watercooler gossip is bubbling today off the back of public rumours that Qantas is ‘very’ interested in buying into Melbourne based online travel agency Luxury Escapes.
An article in the Australian Financial Review (AFR) ‘Street talk’ column suggests that Qantas Airways is considering a bid for disruptors Luxury Escapes as part of a wider push to diversify its group’s earnings.
The story goes on to say that it is understood “Qantas has tapped investment bank Citi for help with due diligence and financing considerations and is working towards putting an offer to Luxury Escapes’ owners.”
With more than 3 million subscribers globally on its database, the move would no doubt tie in with the Qantas Group’ wider airlines and loyalty businesses to become a win-win for selling through the line travel for Qantas and Jetstar.
Many of Luxury Escapes customers would likely already be Qantas Loyalty customers with both companies already having a partnership via Qantas’ Frequent Flyer program.
The AFR story stated that at this stage it is “not known whether the owners have put a full or partial stake in the business on the block – although there are known to be a handful of parties engaged in the process.”
Other apparent parties interested in Luxury Escapes are believed to include local and international players who are keen to get a foothold into the fast-growing south-east Asian travel segment.
Some other points to throw into the mix is Qantas’ impending taking back of the Qantas Holidays brand from Helloworld.
And what this could mean (if anything) for the Travel Managers partnership with Luxury Escapes, who currently have a commercial arrangement for their Personal Travel Managers (PTM’s) to sell their wholesale packages with a commission.
Luxury Escapes are also not ATAS accredited, after ceasing membership of their own accord with AFTA in July 2018.
In a statement to KARRYON at the time, Luxury Escapes’ Managing Director, Adam Schwab, said that AFTA and ATAS have been “fantastic organisations for many years”, however, their position in the market has “diminished” and the company could no longer justify paying the “material fee increase”.
“We remain a proud member of IATA and will reconsider our membership of AFTA and ATAS in the future.”
Adam Schwab, Luxury Escapes Managing Director
It’s expected that Luxury Escapes’ turnover will hit around $500 million in the 2020 financial year and its earnings have been growing at 50 per cent annually.
The company now has offices in Sydney, Melbourne, Bangalore, Singapore and San Francisco.
The AFR article went on to say that they anticipate a deal to be finalised “before beach season hits top gear,” though Qantas has declined to comment at this stage.
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