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Flight Centre Travel Group (ASX: FLT) is diving deeper into the European cruise market after acquiring Cruise Club UK with plans to fast-track growth in Britain by adopting a strategy used by one of its fastest-growing subsidiaries, the Gold Coast-founded Ignite Travel.
Cruise Club UK, a privately-owned business based in Manchester, will be led by Ignite founder and former Gold Coast Young Entrepreneur of the Year Randall Deer, who will become managing director of Cruise Club UK, working closely with Ignite’s CEO Ryan Thomas.
Cruise Club, which employs about 35 people and delivered revenue of about $40 million in FY24, uses a call centre model to sell cruise products while its Business Travel Centre services small to medium-sized corporate entities.
Flight Centre has indicated that Cruise Club’s growth blueprint will be based on the model used by Ignite’s highly successful MyCruises business in Australia while the group’s established infrastructure will provide a platform for deployment of other Ignite offerings.
Ignite, which was acquired from Deer in 2019, is one of Flight Centre’s fastest-growing brands, generating more than $500 million in total transaction value in FY24, with the business growing more than 20 per cent annually.
Financial details of the acquisition have not been disclosed with Flight Centre saying the scale of the deal to be funded through existing cash reserves is not material to its business.
The push into the UK cruise market follows the recent launch of Flight Centre’s specialist cruise brand Cruiseabout and its CruiseHQ wholesale business in Australia.
Flight Centre’s leisure CEO James Kavanagh says the Cruise Club UK acquisition is aligned with the group’s strategic objectives of increasing margins through cruise and tour sales and of becoming a leading player in the large UK leisure market, mirroring its success in the corporate travel sector in the country.
“As we look to increase cruise sales and expand Ignite’s offering internationally, we are excited by the potential in the UK and the parallels with Australia, where the Ignite model and MyCruises have proven so successful,” says Kavanagh.
“We aim to replicate that success in the UK, which is a top-three source market for cruise passengers globally and estimated to be double the size of the Australian market.
“Given Ignite’s procurement, packaging and advertising expertise, which allows the business to secure additional bonuses and create extra value for customers, we’re confident we can deliver an innovative and disruptive offering that will quickly prove popular.”
Kavanagh says Flight Centre has already seen strong support from suppliers keen to work with the company and from potential customers who participated in a Cruise Club trial of a My Cruises-style offering.
“We are also very excited to work with the Cruise Club UK team to build on the strong platform that has been established over some 30 years and to broaden the product offering to include the exclusive packages that MyCruises has become famous for,” he says.
Cruise Club UK was founded by founded by Paul Edge, who was the company’s major shareholder. Edge and his son Paul Edge junior will continue working with the business as it is integrated into Ignite.
Flight Centre CEO Graham Turner says the acquisition is a “small but important step” as the company rebuilds its presence in the northern hemisphere’s leisure sector.
“We see solid future growth prospects in both the UK and America, and we are keen to pursue these opportunities, both organically and, in some instances, through acquisitions like Cruise Club where there is a strong strategic and operational rationale,” says Turner.
“This acquisition gives us the ability to quickly and cost effectively launch our offering, plus immediate access to expertise, systems and infrastructure that we don’t currently have locally. It also gives us a more diverse UK leisure offering.”
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