Flight Centre Results Show Shift Back to Corporate Travel

08.09.2023 - 14:25 / skift.com / Selene Brophy / Flight Centre

The corporate division of Flight Centre Travel Group is outperforming the company’s leisure travel bookings, pointing to a comeback for a sector that has suffered significant cutbacks during the pandemic.

Flight Centre reported its corporate travel business, which includes the FCM and Corporate Traveler brands, saw $7 billion (AU$11 billion) in sales for the fiscal year ended June 30, which was 24% above pre-Covid-19 levels. The company’s leisure travel division reported $6.4 billion (AU$11 billion) in sales for the same period.

Pre-Covid, the company saw about two-thirds of its sales generated through leisure travel and one-third through corporate travel sales. This has shifted to “corporate travel sales accounting for 50% and leisure about 45%,” with the remaining 5% attributed to other ancillary services within the group, stated Adam Campbell, Flight Centre’s chief financial officer.

A recent GBTA forecast for the business travel sector indicated the recovery was tracking faster than expected, but a return to pre-pandemic levels was only expected in 2024.

Graham Turner, the company’s founder and CEO, recently told analysts during the company’s full-year earnings update that Flight Centre’s business travel is outpacing this trend, as its business travel sales have already exceeded pre-pandemic levels.

In the corporate travel sector, competition remains fierce, according to Chris Galanty, Flight Centre’s corporate division CEO, who stated the company had recruited 1,000 employees. This was necessary after deep cuts to staffing numbers during the pandemic. 

Galanty further attributed the performance of the corporate division to small and medium-sized enterprise customers formalizing their corporate travel operations with Flight Centre.

“They previously would have self-served, gone on to supply websites, and booked their own travel. In fact, over 50% of Corporate Traveler’s new account wins this year were previously unmanaged.”

Corporate Traveler (CT):

FCM:

Turner added that Flight Centre expects its leisure customers to continue to travel and that it would be interesting to see how the balance between the two divisions continues. Turner also highlighted the impact of the Chinese group traveler, as Australia was one of the major destinations only recently re-included in China’s approved group travel destinations.  

“Australia is a bucket list destination for Chinese travelers. Chinese capacity in Australia is currently tracking at less than 70% of August 2019 levels,” said Turner. 

Flight Centre Leisure CEO James Kavanagh added that one of the categories of travel slowest to return was the family category. Instead, the leisure division has seen a “mix of customers… with lots of solos and couples