The Flight Centre Travel Group (FLT) has outlined plans to create a new global business that will provide in-destination services to travellers, including transfers, excursions and day-trips, arrangements for meetings and incentive groups, and land arrangements for cruises and tour groups.
The plans, which are being implemented in conjunction with Vietnam’s Thien Minh Group (TMG), will see the companies create a large Asia-based DMC business by combining TMG’s Buffalo Tours business in Vietnam with the smaller joint venture DMC businesses the two companies currently operate across 10 other countries.
“We believe that there are huge opportunities in the in-destination sector and it has become one of our key strategic growth areas for the future,” said FLT’s managing director Graham Turner.
Further acquisitions and diversification are planned, with FLT previously signalling its intention to consider hotel management opportunities, or joint ventures in key markets in the future.
TMG will retain a 41.5 per cent holding in the larger business, while FLT will see its holding increase from 49 per cent to 58.5 per cent of the new business.
Agreements are in place for FLT to increase its holding further in 2018 and for TMG to invest in the global DMC offering that the companies plan to create in the short to medium term.
The new Asia DMC is expected to turnover about $US70million and generate in the order of $US5million in earnings before interest and tax during the 2017 calendar year.
With the expansion and growth in Asia, the company’s leadership structure will change.
Suyin Lee, previously the head of FLT’s businesses in Singapore, Malaysia and the Philippines, will become Buffalo Tours managing director. She will continue to be based in Singapore.
With Lee’s promotion, David Fraser, the managing director of FLT’s Greater China (Mainland China and Hong Kong) business, will now take on a broader role as head of a regional Asia leadership team that will oversee the Greater China, Singapore, Malaysia and Philippines businesses, together with the FCM Travel partner network in the region.
In India, Rakshit Desai will continue as managing director.
Fraser and Desai will continue to report to Rob Flint, executive general manager – global corporate operations, while Lee will report to the Buffalo Tours board.