Luxury Escapes, an e-commerce travel deals business, plans to raise as much as $70 million (A$100 million). Makes sense. Travel companies with capital in hand may be best-prepared for the pandemic rebound.
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.
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.
Photo credit: Southern Ocean Lodge on Kangaroo Island in Australia was recently bookable via online travel agency Luxury Escapes. Southern Ocean Lodge on Kangaroo Island in Australia