Adam Schwab runs barefoot half marathons and plays golf in the dark to give himself more time to devote to Luxury Escapes where, as CEO, he has overseen the company’s rise to one of the fastest growing travel companies worldwide.
- Luxury Escapes has seven million global members and offices in Australia, India, New Zealand, the US and the UK.
- Members receive exclusive access to daily offers on hotels, weekend breaks, luxury small-group tours, experiences and flights.
- Luxury Escapes’ latest venture is a superstore in the Melbourne suburb of Chatswood where customers can sip champagne while discussing their travel plans.
The new Melbourne store shows huge faith in retail travel stores. What has been the reaction so far?
Adam: The reaction to our first permanent retail experience has been incredible – demand has been off the charts and we’re already trading well above budget.
We underestimated how much customers love the ability to spend an hour with an expert consultant planning their trip while sipping a glass of Veuve. We’ve also got back-to-back events with partners locked in – showcasing their products with customers, creating a fantastic win-win.
In what ways will you be complementing bricks and mortar with tech-driven sales?
Adam: We view the retail store as an extension of our web and app presence. Customers can create a detailed TripPlan in store and then continue to evolve their trip before they depart and then while they’re on holiday.
So, while the interaction we have with our customers is in person, we’re able to utilise all the tech capabilities of Luxury Escapes to enhance the entire experience.
The bar at Luxury Escapes new Melbourne retail store
How did Luxury Escapes fare during Covid and how quickly has the pick-up been?
Adam: Covid was difficult for the entire industry, but we were very fortunate being a predominantly online business to be able to be able to continue to sell through Covid and even increase the size our team, especially our technology team which grew from 30 people to almost 150 now.
We’re trading at more than double pre-Covid levels across the business, with some source markets like the US being up by more than 400% since 2019.
What lessons did you learn from the pandemic?
Adam: We learned the value of having a strong and trusting relationship with our customers and suppliers is absolutely critical in challenging times – we came out of Covid a far stronger and more diversified business, with a much larger team, stronger brand and bigger customer base, but we also recognise we were very lucky to be able to pivot to serving local markets and having a lot of operational leverage in the business.
A sales executive of a luxury property in Bali told me Luxury Escapes was “both friend and enemy” – i.e., filling beds but squeezing out plenty in pricing in return. How do you view that statement.
Adam: That would absolutely be the minority view – we find that virtually all our hotel clients, most of whom we’ve worked with for five years or more love the significant incremental profitability a Luxury Escapes campaign drives.
In many cases we’re generating literally millions of dollars of extra profitability 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 who charge extra for marketing support).
We’re a marketing channel which drives 96% incremental customers who weren’t planning on going to the hotel or resort before they found it on Luxury Escapes. Simply put, no other channel on earth can deliver the incremental profitability that an LE campaign does, which is why our clients are incredibly sticky and recognise the mutual value being created.
What has been the extent of your Bali business post-pandemic – as a % of total business?
Adam: Bali remains our number one market and it flew out of the gates in early 2022 and hasn’t looked back. The actual % level will vary month to month, but Bali is incredibly popular and continues to strengthen in both the Australian and Asian outbound markets.
In terms of outbound destinations, have any trends emerged post pandemic or is it still Bali and Thailand?
Adam: Bali and Thailand are super strong, alongside Maldives. Fiji has been incredible; the demand is off the charts, but supply remains constrained. Vietnam is rebounding nicely as is Hong Kong, while Singapore seems to grow in popularity every year. We’re also seeing a nice pick up in touring product out of the Middle East and Europe.
“We’re a marketing channel which drives 96% incremental customers who weren’t planning on going to the hotel or resort before they found it on Luxury Escapes. Simply put, no other channel on earth can deliver the incremental profitability that an LE campaign does,” says Adam Schwab, co-founder and CEO of Luxury Escapes
You are passionate about staff working from the office. Not from home. Why so?
Adam: We are passionate about creating a super strong culture and recognise the importance of working closely together from a mental health and collaboration perspective. We have always been a business which embraces flexibility, so if our team have a genuine need to do something out of the office, that is embraced, but we ultimately believe to be able to best service our customers and our clients and create a fantastic atmosphere that has a real buzz, we want our team working side by side in the office as much as possible.
Why do you think the LE model has been so successful?
Adam: We have a laser-like focus on our customers, we think more so than any other retail travel brand globally. We have an NPS of 75, which is basically unheard in travel retail (usually it’s only super high-end tour operations like Abercrombie & Kent who have those levels of customer satisfaction).
We’re also very keen to innovate and not afraid to make mistakes. During Covid we created a marketplace platform, which completely changed our supply profile, increasing our product range from 100 to more than 15,000.
We have also created a market-leading trip creating product which dynamically adapts both before and during a trip. The world’s most valuable travel businesses – Booking.com and Airbnb, despite being incredible operations, haven’t really innovated in a decade, that gives fast growing challenger brands like Luxury Escapes a huge opportunity to fulfil customer demand and create a far better travel experience.
Any plans for expansion in Asia?
Adam: We have been operating out of key Asian marketplaces, including Singapore, Hong Kong, Malaysia and Thailand, for almost five years, but this year we are planning on significantly accelerating investment in what we believe are hugely exciting growth markets for us.
Our product range is perfectly suited for Asian travellers, and we can’t wait to invest heavily in brand and digital channels to grow our market share.
