Flight Centre Travel Group reported total transaction value
in its corporate travel business nearly doubled year over year during the 2023
fiscal year, which ends June 30, to A$11
billion (US$7.1 billion), with records hit in all geographic segments, the
company announced.
The result was 96 percent above the total transaction value
in the 2022 fiscal year and 25 percent above 2019 levels, which was the
previous record for the group's corporate travel sector consisting of
large-market-focused FCM and SME-focused Corporate Traveler. The group's
corporate transaction volumes also have surpassed 2019 levels, which it
attributed to "high customer retention rates and a large pipeline of
global account wins for both FCM and Corporate Traveler." New accounts
contracted for FCM totaled A$1.6 billion (US$1 billion) in annual spending and
largely moved to FCM from another travel management company, while most of
Corporate Traveler's new accounts were previously unmanaged programs, according
to the group.
New business signed since 2020 accounts for about A$4
billion (US$2.6 billion) of the total transaction value, group's global CEO of
corporate travel Chris Galanty said in an earnings call.
The group has incurred "significant upfront costs"
related to that customer growth, including adding about 1,000 new sales and
support staff across the corporate segment through the fiscal year. The segment
is now "right-sized with full staffing," Galanty said. Technology
investment has been another part of those costs, including enhancements to its
global FCM platform and deploying Corporate Traveler's online platform Melon in
the UK, according to the group.
While such investment will continue, the group also is working
to "identify savings, productivity gains and customer benefits through
automation" to improve margins.
Spend per client remains below 2019 levels, which the groups
said it expected to continue "in the near-term as customers maintain their
cost reduction focus." The group still expects corporate total transaction
value to continue to grow year over year in the 2024 fiscal year with new
client wins.
The Americas became the largest region for Flight Centre's
corporate business in terms of total transaction value in the 2023 fiscal year,
representing 31 percent of the total, a percentage point above Australia/New
Zealand's 30 percent share. Europe, the Middle East and Africa represented 28
percent of the total transaction value pie for the fiscal year, and Asia made
up the remaining 11 percent.
Flight Centre's corporate segment reported a A$190 million
(US$123 million) EBITDA for the fiscal year, up from A$6 million (US$3.9
million) the previous year. EBITDA across the whole group totaled A$301.6
million (US$195.3) for the fiscal year, compared with a A$183.1 million
(US$119.6) loss in the 2022 fiscal year.
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