Australian travel agent Flight Centre Travel Group Ltd (ASX: FLT) today announced that it is to expand into Mexico by acquiring a corporate travel management business named Koch Overseas de Mexico.
The Mexican travel business has reportedly operated as an independent licensee of Flight Centre’s corporate travel business since 2006 and the progression to full ownership extends Flight Centre’s footprint in the Americas.
The corporate travel industry generally has proven remarkably resilient over the years, as technological advancements have failed to put a dampener on the growth of business travel. For example the emergence of the videoconference in the 1980s was thought to spell the end for corporate travel, but it seems there’s no technological substitute sufficiently strong to replace traditional face-to-face meetings.
Most Australians will be familiar with the bright red Flight Centre brand via its shops and heavy advertising, although the Australian market is relatively mature now. The key growth driver for this business is international growth into far larger markets.
Indeed, Flight Centre has successfully operated in the UK for a long time now and is growing all over the world. It also operates dozens of travel brands other than the Flight Centre business and looks a good bet for leverage to the growth in global travel.
Another business that specialises in corporate travel, but may perhaps branch out into retail travel itself one day is founder-driven Corporate Travel Management Ltd (ASX: CTD). It has more than doubled in value in less than two years, with its success based on new client wins and easy to sell travel solutions.
Those are two top travel businesses that currently trade on seemingly reasonable valuations…