I KNOW that every week we say it’s been a huge few days of news, but this time that would be a significant understatement. We’ve sent out no fewer than eight breaking news bulletins – not to mention breaking a host of big exclusive stories that really mark some seismic shifts in the Australian and New Zealand travel sector.
Of course the biggest news of the week was the momentous announcement that Helloworld Travel Limited will acquire Express Travel Group (ETG) for the princely sum of $70 million. The deal has been the subject of increasing rumours across the industry for some time, and now that it’s become a reality has set the stage for major changes, effectively consolidating the two largest travel industry franchise and membership networks in Australasia. It’s a well-deserved exit for longstanding ETG CEO Tom Manwaring and the company’s 50% shareholder, Spiros Alysandratos – although AFTA Chairman Manwaring isn’t leaving in a hurry, telling travelBulletin he will be around for some years yet.
Consideration for the deal will be an as-yet-unspecified combination of cash and HLO shares, and the acquisition will require the assent of HLO shareholders at an Extraordinary General Meeting scheduled for Friday 21 July. The deal includes all of the ETG brands including Express Tickets, Independent Travel Group, Select Travel Group and italktravel as well as cruise wholesaler Creative Cruising – along with New Zealand’s First Travel Group. Manwaring described the deal as an opportunity for ETG to become part of something bigger, assuring staff that all of the existing brands, Melbourne head office and employees would be retained.
Clearly some in the industry were well-prepared, with CVFR Consolidation revealing plans for a VFR-focused Asia Travel Network the next day. Express Travel Group’s origins were in its former name as Orient Express Travel Group, reflecting a still strong presence particularly in the Asian VFR market which saw the foundation of ETG’s Select Travel Group sub-network – a high-transaction group now clearly being targeted by CVFR chief Ram Chhabra.
As it that wasn’t enough news for Thursday, later in the afternoon came the long-awaited confirmation that the ACCC had finally issued a draft decision in favour of re-authorising the alliance between Qantas and Emirates. While the outcome was not particularly surprising, it’s been under consideration for months after initially being seen as a fait accompli by QF and EK as far back as January this year. A consultation period will now seek feedback on the deal, but I will be very surprised if the draft ruling isn’t rubber-stamped in a couple of months time with a final decision in favour of the pact.
Earlier in the week AFTA held its Annual General Meeting, at which the attendees overwhelmingly endorsed the association’s new Constitution with the required 75% majority (in fact it was 100% in the end). While the technicalities of the document are probably lost on anyone but the lawyers, they do pave the way for a new future for the organisation reflecting the reality of the 21st century distribution landscape. Gone are voting rules based on bricks and mortar locations, replaced by a TTV-based model which ensures a more equitable governance regime for the Federation. This in turn sets the foundation to allow for other significant reforms, so watch this space – I suspect there are some more big things coming from AFTA in the coming months.
Earlier in the week our issues were dominated by news from Flight Centre’s Travel Associates brand, whose conference I attended in Singapore in the lead-up to International Travel Luxury Market (ILTM) Asia-Pacific. By all accounts the top end of the travel market is booming, seemingly immune from – or actually benefiting from – the impacts of high interest rates and global economic uncertainty. Travel Associates appears to be a standout for Flight Centre as part of the Luxury and Independent division, which was called out in an analyst briefing by FCTG Global Head of Leisure, James Kavanagh, as a key driver of TTV and profitability in the post-pandemic travel landscape. Kavanagh also highlighted the new world of productivity for the company, which is producing almost twice as much TTV from each store as before the pandemic.
By all accounts aviation across the globe is booming – which made a trading halt followed by an ASX update from Rex Airlines somewhat of a surprise. After forecasting a break-even position for the 2022/23 financial year as recently as 28 February, the shock announcement from Rex revised that into a whopping $35 million expected loss. Putting that into context, the airline has slumped to losing almost $9 million a month over the last four months, which the carrier blamed on global supply chain and workforce issues, as well as corporate travel budgets being consumed by high international airfares. Qantas and Virgin appear to have no such woes at this stage, and yields on their core domestic routes certainly seem to be holding up if fares on the Brisbane-Sydney-Melbourne “golden triangle” are any indication.
Also in aviation this week we saw Jetstar continue to tap into Queensland Government support for a major partnership with Brisbane Airport which will see the launch of non-stop JQ routes to Tokyo, Seoul and Osaka. Great news for the Queenland capital but not so good for Gold Coast Airport which noted that the new Brisbane-Tokyo route came at the expense of its long-haul Japan flights from Coolangatta. A spokesperson for the airport told Travel Daily that the longstanding non-stops from Japan to the Gold Coast had been a “longstanding driver of our tourism industry” after being in operation since December 2008 (albeit with a pandemic-induced pause which saw flights resume last August).
There was also plenty of news in cruising this week, including confirmation that tourism authorities in Saudi Arabia will kick-start their local industry with the formation of a home-grown cruise brand called Aroya. Hardware for the venture has already been acquired, with Cruise Saudi earlier this year emerging as the buyer of the defunct Genting Hong Kong World Dream. Aroya Cruises will showcase “Arabian experiences” to Saudi nationals, expatriates and international guests with aspirations for the destination to welcome 1.3 million cruise visitors annually by 2035.
Norwegian Cruise Line confirmed that its Norwegian Sun will replace Norwegian Spirit in its local deployment in 2024/25, while Four Seasons announced an order for a second luxury yacht, and at the other end of the scale Royal Caribbean revealed details of its newest Oasis-class vessel, Utopia of the Seas. And American Queen Voyages (AQV) – part of Hornblower Group which also owns Australia’s Journey Beyond – announced a strategic review which will see it pull out of North America’s Great Lakes region in favour of a stronger focus on US river cruising.
Finally the week wrapped up with another huge exclusive – the voluntary administration of tours and activities specialist Livn Group, backed by Tasmanian rich-lister Jan Cameron. The company’s Board appointed Antony Resnick from insolvency specialists DVT Group as Administrator “in order to consider options for continuity and new ownership”. It appears the business is still continuing day-to-day operations, with the Administrators “working intensely with the team to determine options for the company”. Livn is a key link in the distribution chain for activities, used by major players including Flight Centre and RedBalloon to facilitate connections for a multitude of activity and experience operators across the globe, so it will be intriguing to see where this innovative Aussie-founded business will end up.
I’m sorry that the wrap is so long this week but it’s been such a momentous few days that there’s an awful lot to catch up on. I also have some momentous personal news, with the birth last Saturday of Jenny and my second grandchild, Edward Joseph Beyer. God is good, and if I see you in person in the coming weeks don’t be surprised if I show you some very cute photos!
Have a great weekend
Bruce
