| Cruise grows in significance for FCTG

FLIGHT Centre Travel Group (FCTG) is aiming to double cruise sales, following strong results from the sector for the first half.

FCTG’s results, announced yesterday, indicate an almost 25% first half growth to $500 million in cruise & tour sales, which are indexed together.

The company delivered more than $1 billion in TTV from cruise & tour sales in the first half, while accelerating its cruise market share was named as one of FCTG’s five longer-term objectives through its specialist brands and retail portfolio.

FCTG’s directors report suggested greater cruise sales in the second half of the year could see a heavier skew in profit, compared to the prior corresponding period.

TTV growth opportunities identified in FCTG’s results presentation include sharper execution of its ‘Bundle Save’ strategy through its flagship Flight Centre brand.

This scheme, which typically yields a $16,500 booking value, averages more than $20,000 when cruises are included.

FCTG has been so bullish on cruise the past six months, it noted its flat underlying profit before tax result was largely due to investment geared toward fast tracking growth in the sector.

These investments collectively totalled almost $4 million, relating to start-up costs for Cruiseabout, and the integration of Cruise Club UK into the business, which it purchased late last year (CW 30 Oct 2024).

Yesterday’s results indicate FCTG paid 2.5 million (A$4.8 million) for the Manchester-based company, which employs around 35 people, and turned over around 20 million in retail cruise sales during the 2024 fiscal year.

These two new FCTG brands were both identified in the company’s results presentation as “scalable”, “winning” models.

Also relevant were costs associated with FCTG’s agreement with Oceania Cruises for the ‘Explorations by Norwegian’ product, sold through the company’s Ignite Travel brand (CW 03 Oct 2024).

FCTG noted sales for Explorations by Norwegian are promising, with about 1,500 staterooms already sold, although it will not recognise revenue on these cruises until they depart in 2026 and 2027.

The cash flow from investing activities was $2.3 million, net of cash acquired.

FCTG also tabbed enhanced digital capability for cruise, enhancing its online bookings and product information. MS