Investor Actus to Inject Capital Into This Australian Luxury Online Travel Agency

Luxury Escapes, an e-commerce travel deals business formally known as Lux Group, plans to raise as much as $70 million (up to $100 million Australian) with the help of
Auctus, an asset management firm.

Auctus will invest at least $40 million (A$60 million) in Melbourne-based Luxury Escapes, which sells upscale vacation packages. The firm has launched a special purpose investment fund to raise capital that would take a minority interest in the travel business.

The move is the first external equity capital raise by Luxury Escapes since its opened for business in 2013. The investment would come as a convertible note, likely by late November, and it would buy out some other shareholders while also investing primary capital. Asset manager HT&E recently announced its plan to divest up to $17 million (A$23.2 million) of its holdings in the online travel company.

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Catch Group founders Gabby and Hezi Leibovich will remain as significant shareholders.

The pandemic slammed Luxury Escapes. Before the crisis, the company sold packages for trips serving nearly 500,000 travelers a year. In 2019, it generated about $15 million (more than $20 million Australian) in earnings before interest, tax, depreciation, and amortization on pro forma revenue of approximately $239 million ($350 million Australian). International markets made up about 40 percent of bookers, but the rest were Australians.

In 2019, Qantas Airways tapped investment bank Citi as it considered taking a full or partial stake in Luxury Escapes. But the talks went nowhere. Qantas has had a long-running partnership promoting Luxury Escapes packages to members of its frequent flyer program.

In 2020, revenues fell drastically during the pandemic-related travel restrictions. Luxury Escapes currently has about 250 employees and is “cashflow positive,” executives said.

As Skift previously reported, Luxury Escapes takes a curated approach somewhat similar to French-based flash deals site Voyage Privee and UK-based Secret Escapes. The company handpicks a few vacation packages and markets them to its database of about 3 million travelers, typically for a couple of weeks at a time.

The agency rotates out properties, intending to keep its offers surprising. It has fewer than 100 deals on its site at any given time.

Luxury Escapes is ­currently running a promotion where it offers vouchers for travel worth up to $150 ($200 Australian) for consumers who provide their proof of vaccination. Only roughly a third of adult Australians are fully vaccinated today.

The online travel agency hopes Australia will re-open at least some international travel within the next six months. But the government’s projected timetable remains mid-2022.

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