The Australian group is turning to the U.S. for its next phase of expansion, but interestingly thinks the best avenue for that is through a British luxury brand.
Australia’s Flight Centre Travel Group is buying UK-based tour operator Scott Dunn for $148 million (A$211 million), in a bid to expand into the U.S., as well as the UK.
The luxury-focused brand, which was founded in 1986 as a luxury ski operator, will now act as an “entry point into the UK and U.S. luxury market to complement the existing global leisure offering in a segment where Flight Centre is underrepresented,” Flight Centre said in a statement on Tuesday.
Flight Centre said Scott Dunn achieves higher revenue and EBITDA (earnings before interest, taxes, depreciation, and amortization) margins in comparison to Flight Centre’s existing leisure operations. For the 12 months to Dec. 31, 2022, Scott Dunn reported a total transaction value of $138 million with revenue of $35 million.
The tour operator also has a presence in Singapore.
The operator’s management team, headed by CEO Sonia Davies, will be retained, and the brand will continue to operate as an independent unit, with corporate support provided by Flight Centre.
The agreement to acquire 100 percent of Luxury Travel Holdings Limited (the trading name for Scott Dunn) is being funded by an equity raise and will complete by the end of February 2023.
In August last year, Flight Centre played down media speculation it was poised to buy U.S. travel management company Altour.
Flight Centre will release its first-half results on Feb. 22, 2023.
CORRECTION: An earlier version of this article stated the acquisition was $120 million.
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Tags: australia, flight centre, luxury, mergers and acquisitions, tour operators, uk
Photo credit: Flight Centre Travel Group will acquire 100 percent of Luxury Travel Holdings Limited , the trading name for Scott Dunn. Flight Centre