Flight Centre and Iglu bosses see ‘a lot of room for growth’ in cruise

Bosses at Flight Centre Travel Group and its new Iglu.com acquisition say the growth opportunities in the cruise sector will play a key role in the brands’ future success.

 

The Australian-based travel company announced on Wednesday (December 10) that it has acquired the British online ski and cruise specialist in a £100 million transaction.

 

The agency now forms part of Flight Centre’s global leisure division under its chief executive James Kavanagh, with Iglu chief executive David Gooch continuing to lead the business in the UK.

 

Kavanagh told a Travel Weekly webcast that Flight Centre has a “strategy to grow the cruise category”, adding: “We have really been investing in a number of businesses, brands, and have been accelerating our growth in this space.”

He said: “The tailwinds are very strong in this [cruise] space. If you look at the back order for the number of ships that are coming through in many years to come, it is quite significant.

 

“If I look back on the transformation of the cruise industry over the last few years, it has been phenomenal.

 

“[The acquisition] gives our cruise partners the opportunity to have one single conversation that can reach multiple markets around the world.

 

“It can only be a positive thing that reinforces and lifts the category overall.”

 

More: Iglu boss outlines global ambitions following £100m Flight Centre deal

 

Flight Centre Travel Group also has a cruise business in Australia, called My Cruises, and Cruise Club in the UK.

Asked about the acquisition of Iglu, which comes less than five months after Hays Travel took over Cruise.co.uk parent Victoria Travel Group, Kavanagh noted: “There has been a range of consolidation in recent years.

 

“It just reinforces the attractiveness of the cruise category… it just shows it is a growing market.”

 

Gooch added: “Look at the incredible ships that are in the market now and coming online [and] the great investments – not just the ships, the wider experience, the private islands.

 

“There is a lot of room for growth and certainly for ourselves. I look at that growth opportunity to get more customers onboard ships and on ski holidays.

 

“We see a lot of customers cruising for the first time – absolutely loving it and recognising the value for money it gives as a holiday.

 

“It is the attractive space at the moment in the travel market, and we’re really well positioned to take advantage of that.”

Asked if Flight Centre is eyeing further acquisitions in the UK, Kavanagh said: “I would never say never, so long as it’s on strategy and it’s complementary to everything we’re trying to achieve.

 

“But right now, the most important thing, particularly in this segment, is bedding down Iglu, and we’re really focused on the integration now and making that a huge success.”

 

Gooch said Iglu is one of the fastest growing companies in the UK and trading in recent months has been “really strong”.

 

He highlighted the successful investment in its technology to create an ecommerce platform for cruise and ski customers.

 

“We do a lot of purely booked online sales. That is very unique in this space,” he said.

 

“A cruise holiday and a ski holiday are relatively complex purchases. In order to be able to do that online, or even searching properly online, takes a lot of information, and that’s something that myself and the team really focused in on.

 

“We’ve had a twin strategy where, for customers booking just the cruises or relatively simple packages, we’ve made it really easy for them to book those online.

 

“We’re seeing more than half of our business now being fully transacted online.

 

“We’ve also focused on the value-add that we can add to customers from our package business, which is more complicated, more tailored, and that’s where our brilliant sales team could also facilitate and give those customers what they want.

 

“The technology platform helps with both, because it gives customers that opportunity to really understand and search what they want themselves, but if they want to take that offline, they have that chance too.”

 

Outgoing Iglu founder and non-executive chairman Richard Downs started Iglu in a small office in Baker Street in 1998.

 

Inglu secured investment from mid-market private equity firm LDC in 2015, with previous investor Growth Capital Partners exiting the business after three years.

 

Gooch commented: “In the last five or six years, [Downs] had taken a step back from day to day, and has been operating as the non-exec chairman, but very involved, very passionate about the business.

 

“It is a nice close in terms of as a founder, to see a business you built from scratch find a new and hopefully permanent home in an absolute brilliant business like Flight Centre.”

 

However, as Downs is currently overseas, he will miss the Iglu Christmas party for the first time.

 

“It’s very much the end of an era. We’ll find a way to celebrate with him when he is back,” added Gooch.