Luxury Escapes’ Adam Schwab on fast-growing, unique Melbourne new supermarket
- Luxury Escapes has seven million members worldwide and has offices in Australia, India, New Zealand, the US and the UK.
- Members get exclusive access to daily deals on hotels, weekend breaks, luxury small group tours, experiences and flights.
- Luxury Escapes’ latest venture is a supermarket in the Melbourne suburb of Chatswood, where customers can discuss their travel plans over champagne.
The new Melbourne store shows huge confidence in retail tourism stores. How has the response been so far?
Adam: The response to our first permanent retail experience has been incredible – demand has exceeded expectations and we’ve already traded well above budget.
We underestimated how many customers enjoy spending an hour with an expert advisor planning their trip over a glass of Veuve Clicquot. We’ve also held back-to-back events with locked-in partners – showcasing their products to customers, creating a fantastic win-win.
How will you supplement your physical store with technology-driven sales?
Adam: We view retail stores as an extension of our web and app business. Customers can create detailed travel plans in-store and then continue to refine their trips before departure and during their vacation.
So while our interactions with our clients are face-to-face, we are able to utilize all the technological capabilities of Luxury Escapes to enhance the overall experience.
How has Luxury Escapes fared during the COVID-19 pandemic? How fast is the recovery?
Adam: Covid has been difficult for the industry as a whole, but we’ve been very fortunate, as a primarily online business, to continue selling through Covid and even grow our team, especially our tech team, from 30 people to Nearly 150 people now.
Our entire business is trading at more than double pre-pandemic levels, with some source markets, such as the US, growing more than 400% since 2019.
What lessons have you learned from the pandemic?
Adam: We recognize the value of building strong and trusting relationships with customers and suppliers is absolutely critical during challenging times – and we have emerged from the pandemic stronger and more diverse with a larger team, stronger brand and a larger customer base, but we also recognize that we are very fortunate to pivot to serve local markets and have a lot of operating leverage in the business.
The head of sales at a luxury hotel in Bali told me that Luxury Escapes is “both friend and foe” — that is, filling up the beds but squeezing a lot of money in return. What do you think of that statement.
Adam: That’s definitely a minority view—we’ve found that nearly all of our hotel clients, most of whom have been with us for five years or more, appreciate the significant incremental profitability that comes with luxury getaways.
In many cases, we have generated millions of dollars in additional profits for our partners. Our commission levels are similar to OTAs, but we also spend hundreds of thousands of dollars marketing our hotel partners (unlike OTAs, which charge extra for marketing support).
We are a marketing channel that captures 96% of incremental customers who had no plans to go to a hotel or resort until they found it on Luxury Escapes. Simply put, there is no other channel on the planet that delivers the incremental profitability that LE campaigns can deliver, which is why our clients are extremely sticky and recognize the mutual value created.
Post-pandemic, what percentage of your Bali business is your total business?
Adam: Bali, still our number one market, flew out the gate in early 2022 and hasn’t looked back. Actual percentage levels will vary from month to month, but Bali is very popular and continues to be strong in Australian and Asian outbound markets.
In terms of outbound destinations, is there any trend after the epidemic? Or Bali, Thailand?
Adam: Bali and Thailand and the Maldives are very strong. Fiji is unbelievable; demand has exceeded expectations, but supply remains limited. Both Vietnam and Hong Kong rebounded well, while Singapore seems to be getting more and more popular every year. We also saw good growth in travel products in the Middle East and Europe.
You are passionate about the people who work in your office. Not from home. why is it like this?
Adam: We are passionate about creating a super strong culture and recognize the importance of working closely together from a mental health and collaborative perspective. We’ve always been a business that values flexibility, so if our team does need to do something outside of the office, we accept that, but ultimately we believe in delivering the best service to our clients and customers and creating a wonderful The atmosphere is really welcoming and we want our teams to work side by side in the office as much as possible.
Why do you think LE mode has been so successful?
Adam: We have an intense focus on our customers, more than any other retail travel brand in the world. We have an NPS of 75 which is basically unheard of in travel retail (customer satisfaction usually only found in super high end tour operators like Abercrombie & Kent).
We are also very keen to innovate and not afraid to make mistakes. During the COVID-19 pandemic, we created a marketplace platform that completely changed our offering, increasing our product range from 100 to over 15,000 products.
We also created a market-leading trip creation product that can be dynamically adjusted before and during a trip. The most valuable travel businesses in the world – Booking.com and Airbnb – have not really innovated for a decade despite incredible operations, presenting a huge opportunity for fast-growing challenger brands like Luxury Escapes to satisfy customers demand and create a better travel experience.
Are there any plans to expand in Asia?
Adam: We have been present in key Asian markets such as Singapore, Hong Kong, Malaysia and Thailand for almost five years, but this year we plan to significantly accelerate our investments in growth markets that we believe are very exciting for us.
Our product range is perfect for Asian travelers and we can’t wait to invest heavily in our brand and digital channels to grow our market share.