The Flight Centre Travel Group Ltd (ASX: FLT) share price will be on watch on Monday after the release of a positive announcement out of the global travel agent this morning.
What was announced?
This morning Flight Centre announced that it has strengthened its presence in the global corporate travel sector by securing a 25% interest in The Upside Travel Company.
The Upside Travel Company is a Washington DC-based, technology-driven business launched in 2017 by Priceline founder Jay Walker. This investment will see Flight Centre become Upside’s largest individual shareholder and will gain access to a travel technology platform and software development resources that will enhance its already strong small to medium sized business offering.
In addition to this, the two companies have entered into a commercial deal covering cooperation on a number of distribution initiatives that combine Flight Centre’s knowledge of the corporate travel space with Upside’s powerful technical assets.
Flight Centre’s managing director appeared to be very pleased with the investment.
He said: “Upside is an emerging corporate travel business with an innovative customer offering that has the potential to disrupt traditional offerings in the SME sector in the future.”
He added: “By investing in Upside, we are effectively investing in a next generation corporate online travel agency and also taking proactive steps to future proof our successful SME-focused offerings, which we predominantly provide through the Corporate Traveller brand; and fast-tracking our overall growth in this huge travel sector by offering customers the benefits of a new, blended on and offline offering.”
The offering will be deployed in the Americas market in the near term, before a potential launch in the UK in the medium term. No financial terms were disclosed.
Should you invest?
Whilst Flight Centre’s performance has been a touch underwhelming recently, one side of the business that has continued to shine is its Corporate segment.
I believe this development will be a boost to the segment and support its long-term growth, potentially making it a great alternative to Corporate Travel Management Ltd (ASX: CTD) which continues to be targeted by short sellers.
Overall, I would suggest investors consider picking up shares today along with fellow travel sector star Webjet Limited (ASX: WEB).
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Flight Centre Travel Group Limited. The Motley Fool Australia has recommended Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.