Adam Schwab runs barefoot half marathons and plays golf in
the dark to give himself more time to devote to Luxury Escapes where, as CEO,
he has overseen the company’s rise to one of the fastest growing travel
companies worldwide.
Luxury Escapes has seven million
global members and offices in Australia, India, New Zealand the United States
and the United Kingdom. Members receive exclusive access to daily offers on
hotels, weekend breaks, luxury small-group tours, experiences and flights.
Luxury Escapes’ latest venture is a
superstore in the Melbourne suburb of Chatswood where customers can sip
champagne while discussing their travel plans. Web in Travel spoke with Schwab about
his plans.
The new Melbourne store shows huge faith in retail travel stores. What
has been the reaction so far?
The reaction to our first permanent retail experience has been incredible
– demand has been off the charts and we’re already trading well above budget.
We underestimated how much customers love the ability to spend an hour
with an expert consultant planning their trip while sipping a glass of Veuve.
We’ve also got back-to-back events with partners locked in – showcasing their
products with customers, creating a fantastic win-win.
In what ways will you be complementing bricks and mortar with tech-driven
sales?
We view the retail store as an extension of our web and app presence.
Customers can create a detailed TripPlan in store and then continue to evolve
their trip before they depart and then while they’re on holiday.
So, while the interaction we have with our customers is in person,
we’re able to utilize all the tech capabilities of Luxury Escapes to enhance
the entire experience.
How
did Luxury Escapes fare during Covid and how quickly has the pick-up been?
COVID was difficult for the entire industry, but we were very
fortunate being a predominantly online business to be able to be able to
continue to sell through COVID and even increase the size our team, especially
our technology team which grew from 30 people to almost 150 now.
We’re trading at more than double pre-COVID levels across the
business, with some source markets like the U.S. being up by more than 400%
since 2019.
What
lessons did you learn from the pandemic?
We learned the value of having a strong and trusting
relationship with our customers and suppliers is absolutely critical in
challenging times – we came out of COVID a far stronger and more diversified
business, with a much larger team, stronger brand and bigger customer base, but
we also recognize we were very lucky to be able to pivot to serving local
markets and having a lot of operational leverage in the business.
A
sales executive of a luxury property in Bali told me Luxury Escapes was “both
friend and enemy” – i.e., filling beds but squeezing out plenty in pricing in
return. How do you view that statement.
That would absolutely be the minority view – we find that
virtually all our hotel clients, most of whom we’ve worked with for five years
or more love the significant incremental profitability a Luxury Escapes
campaign drives.
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In many cases we’re generating literally millions of dollars of
extra profitability for our partners. Our commission levels are similar to online
travel agencies, but we also spend hundreds of thousands of dollars marketing
our hotel partners (unlike OTAs who charge extra for marketing support).
We’re a marketing channel which drives 96% incremental customers
who weren’t planning on going to the hotel or resort before they found it on
Luxury Escapes. Simply put, no other channel on earth can deliver the
incremental profitability that an Luxury Escapes campaign does, which is why our clients
are incredibly sticky and recognize the mutual value being created.
What
has been the extent of your Bali business post-pandemic – as a percent of total
business?
Bali remains our number one market and it flew out of the gates
in early 2022 and hasn’t looked back. The actual percent level will vary month
to month, but Bali is incredibly popular and continues to strengthen in both
the Australian and Asian outbound markets.
In
terms of outbound destinations, have any trends emerged post pandemic or is it
still Bali and Thailand?
Bali and Thailand are super strong, alongside Maldives. Fiji has
been incredible; the demand is off the charts, but supply remains constrained.
Vietnam is rebounding nicely as is Hong Kong, while Singapore seems to grow in
popularity every year. We’re also seeing a nice pick up in touring product out
of the Middle East and Europe.
You are passionate about staff working from the
office. Not from home. Why so?
We are passionate about creating a super strong
culture and recognize the importance of working closely together from a mental
health and collaboration perspective. We have always been a business which
embraces flexibility, so if our team have a genuine need to do something out of
the office, that is embraced, but we ultimately believe to be able to best
service our customers and our clients and create a fantastic atmosphere that
has a real buzz, we want our team working side by side in the office as much as
possible.
Why
do you think the Luxury Escapes model has been so successful?
We have a laser-like focus on our customers, we think more so
than any other retail travel brand globally. We have an NPS of 75, which is
basically unheard in travel retail (usually it’s only super high-end tour
operations like Abercrombie & Kent who have those levels of customer
satisfaction).
We’re also very keen to innovate and not afraid to make
mistakes. During COVID we created a marketplace platform, which completely
changed our supply profile, increasing our product range from 100 to more than
15,000.
We have also created a market-leading trip creating product
which dynamically adapts both before and during a trip. The world’s most
valuable travel businesses – Booking.com and Airbnb, despite being
incredible operations, haven’t really innovated in a decade, that gives fast
growing challenger brands like Luxury Escapes a huge opportunity to fulfil
customer demand and create a far better travel experience.
Any
plans for expansion in Asia?
We have been operating out of key Asian marketplaces, including
Singapore, Hong Kong, Malaysia and Thailand, for almost five years, but this
year we are planning on significantly accelerating investment in what we
believe are hugely exciting growth markets for us.
Our product range is perfectly suited for Asian travelers, and
we can’t wait to invest heavily in brand and digital channels to grow our
market share.
This
article first appeared in WebinTravel.