Qantas acquires Byron Bay-based travel agency TripADeal

Qantas acquires Byron Bay-based travel agency TripADeal

Antarctic tours are among the wide range of options Qantas will make available to frequent flyers as part of the deal.

Australia's flagship airline Qantas (ASX: QAN) has taken a majority stake in Byron Bay-based TripADeal for an undisclosed sum, giving the group greater exposure to the estimated $13 billion online packaged holiday booking market.

Founded in 2011 by Byron Bay shop owners Norm Black and Richard Johnston, TripADeal offers "bucket list" tours, cruises and resort escapes with set itineraries including flights and hotel accommodation.

Options range from African safaris to villa stays in Bali, Japanese ski trips to Antarctic tours, or domestic offerings like South Australian wine tours.

TripADeal has built thousands of direct supplier relationships with hotels, tour operators and other vendors over the past decade, and now has 100 staff in Byron Bay and the Gold Coast, as well as its own tour guides based in more than 30 countries.

Before the pandemic the company had an annual growth rate of more than 40 per cent, and in the 12 months pre-COVID bookings were in excess of $200 million. Qantas asserts monthly bookings for TripADeal are now significantly higher.

"We’re an Aussie business that is very proud to now be in a close partnership with the national carrier. Qantas understands why TripADeal is different and what makes it a success, which is why we chose to do this deal with them," says co-founder Norm Black.

TripADeal co-founder Norm Black.
TripADeal co-founder Norm Black.

 

Black's fellow co-founder Richard Johnston says the business is about making it easier for people to take amazing holidays essentially at the click of a button. 

"It’s taken a decade for us to build the relationships direct with suppliers to be able to offer all the experiences we have, and the ability to now use Qantas Points for that is really going to drive our growth in the years ahead. And frankly, it’s great news for anyone wanting to take a special trip," he says.

Following the 51 per cent all-cash acquisition, which provides a mechanism for Qantas to acquire the remaining 49 per cent in four years at an agreed multiple of TripADeal’s bookings at the time, the company's ready-made holidays can be booked with Qantas Frequent Flyer points. Until then, other shareholders include the founders and private equity firm BGH Capital, which bought a stake in 2020.

The combination of TripADeal’s success at curating holiday packages together with the reach of Qantas Loyalty’s 14-million member base, plus the opportunity to redeem and earn points, is projected to drive a significant increase in TripADeal’s revenue in the next few years.

"This is a great opportunity at the perfect time. Coming out of the pandemic, people want a holiday experience that is special but also tried and tested, and there is a huge shift to booking online," Qantas Group CEO Alan Joyce explains.

"That’s exactly what TripADeal does. It’s an Aussie success story built on delivering ready-made holidays at very sharp prices, and their level of repeat customers shows how well they do it.

"Partnering with TripADeal means we can make Qantas Points part of the equation, which is great news for our Frequent Flyers and for our loyalty business more broadly. Buying a majority stake at the same time means we can benefit from the strong growth that’s going to follow as a result."

Joyce says Qantas Loyalty performed extremely well during COVID. The company is targeting double-digit growth for the program this calendar year and aiming for underlying earnings before interest and tax of $500-600 million by FY24.

"Despite the lack of flying, members earned and used large volumes of points on the ground, customer satisfaction reached record levels and the business delivered strong earnings for the Group. I don’t think any other airline loyalty program managed to do that," he says.

"The ways to earn points on the ground keep expanding and we know that the number one thing people want to spend those points on is travel. That’s why the opportunities that TripADeal opens up for our Frequent Flyers will be so positive."

The acquisition follows months of various forms of consolidation and diversification within the travel sector as tourism rebounds, including Flight Centre's (ASX: FLT) recently announced joint venture Link Travel Group with independent travel agencies, and soon-to-be Woolworths Group (ASX: WOW) owned MyDeal (ASX: MYD) launching its experiences marketplace Amazed.com.

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