Is the travel industry anti-innovation? Both ‘Skroo’ and Adam Schwab claim they were once travel’s rejects

Is the travel industry anti-innovation? Both ‘Skroo’ and Adam Schwab claim they were once travel’s rejects

Is the travel industry slow to embrace change? This is a natural question to ask, after both Flight Centre co-founder Graham ‘Skroo’ Turner and Luxury Escapes co-founder Adam Schwab both claim to have once been industry rejects.

Flight Centre and Luxury Escapes are now considered to be two of Australia’s most successful travel companies.

“We weren’t very popular in the industry [when we launched],” Turner told audiences at the ATIAs Beyond Borders summit in Sydney.

This was because a lot of agencies were owned by “banks and other people like this” he continued. He went on to say that the travel industry attempted to limit the growth of the early Flight Centre by introducing the TCF (Travel Compensation Fund).

“The TCF came along in the late 80s and early 90s, and it was basically sponsored by AFTA (the older iteration of ATIA). It was basically, I believe, meant to get us because we were growing really rapidly.”

“By 1995 when we floated, we had about 330 shops and were doing about a billion dollars. And that’s from a standing start in 82 and the industry did feel a bit threatened by it.”

He went on to say that the success of Flight Centre actually proved to be an asset to the travel industry.

“Those of you who were around in the 90s and 2000s will remember, that we paid millions and millions of dollars into the TCF to prop up agencies and operators that went broke without any meaningful benefit to us.”

It important that any ATIA initiatives set up to better protect the industry do so “without a huge amount of bureaucracy,” he continued.

Meanwhile, co-founder of Luxury Escapes Adam Schwab sold a similar story of getting the industry’s cold shoulder when launching Luxury Escapes.

“I had no background in travel, but it seemed like everybody hated us,” Schwab said. “We didn’t really understand why,” he continued. He was “surprised” by the industry’s reaction, given that he always considered Luxury Escapes to be more of an incremental channel to the existing travel industry.

About five or six years ago, Luxury Escapes began working with the trade in a “small way” with “limited success”, he continued.

“We always wanted to engage more with trade. And actually, this year, we relaunched, and properly relaunched an agent portal. So we now sell to agents. We have a couple of 1000 agents. We’ve worked with a couple of 1000 agents who signed up, and I think at least 500 are active, so transacting, and we want to be, ideally, the number one supplier to the trade in Australia. We think we’ve got the best product.”

“We don’t consider ourselves to be a cannibaliser. We consider ourselves more of a partner of the trade,” he finished.

Beyond Borders: Katrina Barry, Adam Schwab and Katrina Konstas on travel and tech

 

 

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