If you have seen Luxury Escapes co-founder Adam Schwab speak publicly, you might have noticed his nostalgic fondness for the early, somewhat gritty days of Luxury Escapes.
He shows a particular soft spot for one of the company’s early homes: a somewhat sad-looking Melbourne office above a print shop. It’s the kind of shady-looking startup office that only a founding father could love.
Sitting in a glitzy skyscraper in Barangaroo, with sweeping views across Sydney Harbour on a sunny winter’s day, it is clear both the business and Schwab are a long way from those humble beginnings.
But Schwab is quick to shut down any suggestion that Luxury Escapes has become one of the travel industry’s incumbents it once sought to challenge.
“We see ourselves as we did on day one,” he says. “We’re always a challenger. We’re just changing what we’re challenging.”
“We used to challenge smaller competitors,” Schwab said. “Now we are looking at Booking.com.”
Schwab’s ambitions aren’t small. He wants to become one of the top 10 travel businesses in the world and believes Luxury Escapes could become the largest leisure travel business in Australia within the next decade.
While Flight Centre remains the Australian leader, Schwab said its greater focus on corporate travel meant Luxury Escapes was increasingly differentiated through its leisure focus.
“We’re more focused on leisure than any travel business in the world, and growing far quicker,” he said.
The ambition carries weight coming from Schwab, who is somewhat unusual in the Australian travel industry in that he embodies the startup-founder archetype more commonly found in Silicon Valley than Melbourne’s Southbank: relentlessly focused on growth, highly disciplined in his approach to work and fitness, and visibly energised by conversations about entrepreneurship, work culture and building businesses.
A different kind of disruptor
It is clear that this challenger mentality is central to how Schwab sees both himself and Luxury Escapes.
Luxury Escapes, he argues, is operating in an industry that has changed surprisingly little since the late 1990s.
“Certainly since the OTA in the late 90s, that hasn’t really changed. Mainstream agents haven’t really changed.”
“We kind of revel in disrupting the industry and creating something new.”
That has included everything from its retail stores to Agent Hub, charter flights and its technology platform.
Its Melbourne store, in particular, has become a significant business in its own right, with Schwab saying it is “barrelling towards $100 million” in turnover, around 10 to 15 times that of a normal store.
“It’s a pretty unique concept,” he said.
But he argues the physical stores are about more than sales.
“Part of the challenge of any disruptive travel business is getting customer trust.”
“A retail presence is a really helpful way to reinforce that trust.”
Travel, he argues, is an unusually high-trust purchase because the risk extends well beyond the money being spent.
“It’s probably one of the highest trust purchases.”
“You go overseas, you go to Bali, Thailand, Morocco, Maldives, Egypt, wherever you’re going. It’s a lot of trust you’re placing in the organisation selling that trip.”
“If you go to Thailand and the hotel doesn’t exist or is terrible, or you’re in a bad room, it’s a lot. And you’ve got family there. It’s not just the money.”
“You could be stuck in a place that’s potentially pretty dangerous.”
That makes trust particularly important for Luxury Escapes, which Schwab says often sells products at prices significantly below what customers might otherwise expect to pay.
“That’s an even bigger trust hurdle we have to jump over than any other travel business.”
Vocal founder in an industry under pressure
As Luxury Escapes has grown, Schwab is increasingly willing to speak publicly about an industry that is becoming his own.
Asked about the recent controversy surrounding CTM, Schwab was blunt in his assessment, contrasting CTM with Australian travel businesses including Flight Centre and Intrepid.
“You look at Darrel [Wade] and Skroo [Turner], who’ve done this amazing job with Australia as heroes of not just travel, but heroes of business, and you look at CTM, which is just an embarrassment.”
He acknowledged that there were good people working at the company who did not deserve to be caught up in its problems, but questioned its ability to survive long-term.
His willingness to speak publicly is deliberate, although he acknowledged there are limits.
“As founders, you get a lot more rope than as a manager or CEO, but you only have so much rope.”
“I like to think that whenever I say stuff, it will be either neutral for the business or in the best business interest.”
He also said he tried not to “punch down”, given Luxury Escapes’ size.
“I never criticise a little corner travel agent because I don’t think it’s fair.”
That willingness to have a public point of view also reflects Schwab’s broader interest in entrepreneurship and the Australian business ecosystem.
“When we started in 2004, being an entrepreneur was like [Alan] Bond’s case and bankrupt guys.”
“Now it’s like people love startups and love founders.”
The venture capital environment had become more difficult in recent years, he said, although funds including Blackbird, AirTree and Square Peg continued to raise significant capital.
AI still faces trust hurdle
Given Schwab’s affinity with startup culture, you might expect him to be evangelical about AI. Instead, he remains measured about how quickly consumers will trust it with high-value travel.
Schwab pointed to comments from Booking.com CEO Glenn Fogel, saying he had indicated that a tiny proportion of bookings come from AI.
“They have sub 1 per cent of their bookings generated by AI,” Schwab said. “It’s still infinitesimally small.”
He is particularly skeptical about consumers trusting AI with high-value leisure travel.
“The average customer books at 27 different sites before they book a holiday. Are you going to trust that to Gemini?”
He acknowledged that there was a risk AI could ultimately disrupt the OTA model altogether.
“There is a world where a large number of people just leave an agent to book and cuts out OTAs completely.”
“If you put us in that category, it goes straight to Brand.com.
“I’m not sure that, my gut feeling, that doesn’t happen, but it’s not a non-zero chance,” he admits.
Luxury Escapes is instead taking a more controlled approach, using large language models within its own platform.
“We’ve got a trip planning tool now, which is effectively a large language model wrapped up in our platform that we think is a much better option than using a frontier model directly.
“You’re actually using lots of our data and your own personal data and building trips and chat to a person if you want to, or book it all.”
“We’ve tried to get the best of the agent world and mix it in with our platform.”
He is more bullish about AI on the post-booking side, where the technology is already helping customer service teams respond faster.
“Obviously, we do it post sale with customer service. It makes customer service a lot quicker.”
“You can speak to a voice AI agent in much quicker time than speak to somebody and get a refund or a credit done in a couple of minutes.”
“So we think it’s improved the post-purchase experience. The question is what it’s doing to the pre-purchase experience. I’m not too sure.”
A startup that refuses to grow up
The focus on challenging the status quo is not just an external feature of Luxury Escapes, it is embedded in its culture. Schwab said Luxury Escapes remained deliberately focused on building a culture where people are regularly taking risks.
“We’re definitely a business of placing lots of bets and knowing that not every bet will pay off. And if a bet does pay off and pays off 100 to one, then it’s worth making that bet every day of the week”.
The philosophy is to embrace “errors of commission, but not of omission”.
He said trying something sensible and failing was acceptable, while failing to act, particularly when it affected a customer, was not.
“The biggest offence someone in our sales team would do is not call someone back. That can get you fired.”
Schwab has been public about the importance of not being afraid to fire people. It is a sentiment that might make some in the heavily relationship-based travel industry balk, however he insists it is often the best thing to do for all parties.
“Ultimately, having somebody hanging around who’s not performing probably isn’t helping them either,” he said. “You’re stopping them getting the next job, having a better opportunity.”
He cited the idea of a “slow failure” being worse than a quick one.
“Scott Galloway says the worst thing is a slow failure. A quick failure is actually fine. It’s moving on to the next thing.”
Another of Schwab’s (mildly) controversial work takes is having everyone work in the office. The company deliberately trying to make office-based work attractive.
It provides lunch every day, has introduced a barber at its Sydney office and brings health services into the workplace, including skin checks, flu vaccinations and other health initiatives.
Schwab said the company wanted to make returning to the office a genuine trade-off for employees.
“I don’t think you can demand people come to the office and then make them work in an environment that’s not fun and drab and boring and shit,” he said.
“We think there is a bit of a carrot and stick, and we’ve asked people to come back to the office, but we also want to make sure they have a great experience here.”
Money, impact and building something lasting
For all the emphasis on growth, however, money is not what Schwab says ultimately motivates him.
“My goal in life isn’t to make as much money as possible. My goal is to hopefully leave the world a better place.”
He said one way to do that could be by building wealth and giving it away, while another was using influence to encourage people to do things he believes are right.
His view on corporate philanthropy is similarly pragmatic.
Schwab praised Intrepid as an unusual example of a company successfully integrating impact into its business model, but argued that, generally, companies should focus on serving customers and delivering returns, with founders and shareholders then able to use their own wealth for philanthropic purposes.
“My general view is the companies exist generally often to serve customers, deliver returns for stakeholders and shareholders, and then it’s up to the founders/investors to then use that money the right way.”
“Nothing annoys me more than the CEO who uses the company money to get their name on a hospital wing.”
He said founders should instead build successful businesses, extract value from them and then use their own wealth to create positive impact. He pointed to the founders of Canva as another example of people giving away significant amounts of their wealth.
The next bet
Schwab says the biggest achievement of the Luxury Escapes journey is not the stores, the technology or even the scale, but the team built around the business.
He described the role of the founder and CEO as ultimately being about allocating capital and, crucially, building and retaining great people.
“Your asset turns up and goes down the elevator every night.
“We spend on great people.”
His focus now is on building leadership teams capable of maintaining the entrepreneurial culture as the business expands.
“We can build a great senior leadership who think like entrepreneurs and want to grow their business and want to serve a customer really well.”
That is perhaps the clearest expression of Luxury Escapes’ next phase: a business that is considerably larger, increasingly global and increasingly embedded in the travel industry, but still determined to see itself as the challenger.
“We still want to be a disruptor.”
For Schwab, the biggest threat to a business is not AI or competitors, but complacency – the slow, creeping ailment of the incumbent.
It is why, despite Luxury Escapes’ growing scale, he remains determined to keep moving quickly.
“If we don’t stop running, then somebody will come beat us.”
