Following its recent agreement to enter the Asian hospitality industry with the acquisition of BHMAsia, the Flight Centre Travel Group (FLT) has switched the focus of its expansion to New Zealand.
The Australian company has confirmed plans to acquire 100% of two Kiwi travel businesses: the leisure-focused Travel Managers Group (TMG) and corporate Executive Travel Group (ETG). TMG includes a network of more than 180 home-based agents, plus a 22-shop franchise network including 12 TravelSmart shops. EMG meanwhile, is New Zealand’s largest independent corporate travel management company.
New Zealand is now the company’s fifth largest business globally, in terms of sales, behind Australia, the US, the UK and Canada.
“Executive Travel and Travel Managers are profitable businesses… with solid growth trajectories and good track records of success,” said FLT’s managing director, Graham Turner. “With their addition, Flight Centre New Zealand will go close to becoming a NZ$1.5 billion (US$1.1bn) per year company during the 2018 fiscal year.
“ETG will enhance our already strong corporate travel offering in New Zealand and will give the business additional scale and expertise. Through TMG, we will gain access to new business models and leisure revenue streams to complement our offerings,” he added.
FLT has previously stated its intention to expand in the home-based travel sector, and TMG marks the company’s first acquisition in this sector. Further expansion is planned via “a combination of acquisitions and organic growth”, according to the company.
“The home-based or broker offering has strong growth potential and is attractive to us,” Turner said. “We look forward to working together with TMG to deliver exciting new opportunities, services, benefits and products to its network of expert sales consultants and their customers.”
ETG was established in 1978 and generated about NZ$60m in total transaction value (TTV) during the 2016 calendar year. TMG launched in 2002 and now generates about NZ$120m in TTV. Both businesses were privately owned, with former FLT employee Kevin Weston co-owning ETG and being a major shareholder in TMG.
Weston and his business partners, Nicola Jamieson and Dave Wallace, will continue to oversee both businesses’ day-to-day operations and will report to FLT New Zealand’s managing director, David Coombes.
“With the combination of FLT’s greater technology and product offering and TMG and ETG’s expertise in the broker, leisure and corporate models, this new partnership is an exciting strategic move,” Weston said. “We look forward to working in the business and seeing it develop and evolve. We know that through this partnership TMG and ETG will become even stronger businesses and help support FLT’s continual market share growth, providing a bright future for all stakeholders.”