How luxury escapes against COVID as other travel platforms take flight – ShareCafe

During his progression from student entrepreneur to founder of one of the world’s fastest growing online travel companies, Melburnian Adam Schwab, 41, has taken on many business challenges, including capital exploitation before the term “angel investor” was coined.

A lawyer by training, Schwab has adopted a methodical approach to assessing business risks. But as he discovered last year, nothing could prepare him for the one-in-100 pandemic that has sucked momentum from the company he co-founded, Luxury Escapes.

Before COVID, Luxury Escapes grossed nearly A $ 500 million and served 500,000 customers. In 2017, the Australian Financial Review named the fastest growing enterprise in Australia.

“COVID has certainly been an interesting time,” Schwab says with palpable understatement. “Suddenly our revenue became not only zero, but negative as we were literally crediting and paying off hundreds of thousands of bookings overnight.”

In the spirit of enterprise, in adversity, there is also comfort and hope. After rapid cost cuts, including pay cuts for executives and directors taking no fees, management used the pandemic to reflect on the underlying business structure of the company.

Co-founded with former Caulfield Grammar classmate Jeremy Same in 2013, Luxury Escapes rolled out the ‘flash sale’ model of offering select, heavily discounted packages to luxury hotels for a limited period of time.

The “flop and drop” deals to places such as Bali, Dubai and the Maldives have resonated with travelers, as evidenced by the customer satisfaction ratings of Luxury Escapes.

With the pandemic slashing sales, the company quickly moved on to creating an organized market offering – think with a small selection of the best hotels in each desired destination.

The idea was simple: Creating a marketplace allowed the company to not only keep their entire team employed while other travel companies downsized staff, but actually increased headcount to develop the technology. .

“Instead of being a limited site with 40 products, we will have 10,000 highly selected products relevant to four or five star travelers,” Schwab said.

With the country’s drawbridges retracted, Australians are not free to wander to their favorite playground, Bali – or anywhere else for that matter.

Despite this, Luxury Escapes revenue (before credits and refunds) nearly hit pre-COVID levels in May, before slowing down again as nationwide lockdowns and border closures hit again.

“We are the only travel company in the world to have increased their workforce,” says Schwab. “Even big travel companies like Airbnb and have crushed their staff by more than 50 percent.”

One of the reasons for the company’s resilience was its activity in the United States, where borders never closed, even during the height of the crisis. The obscure travel bubble between New Zealand and the Cook Islands has also been surprisingly helpful in maintaining patronage.

Importantly, most customers were happy to accept vouchers for future travel rather than requesting refunds (which were granted, when warranted).

“It’s because Luxury Escapes has a unique offer, you can’t get it anywhere else,” says Schwab.

“The vast majority of our customers have had an excellent experience and our Net Promoter Score [the standard measure of customer satisfaction] rebounded from 65 to 72.

Schwab’s entrepreneurial flair manifested itself at Caulfield Grammar, where he sold nursery notes for less attentive VCE students.

He enrolled in Monash University’s law and business degree, where he replicated the model for his fellow academics. He even convinced the law school bookstore to stockpile his CDs before an unfriendly dean of the school forbade the arrangement.

Schwab held a mergers and acquisitions role at Freehills (now Herbert Smith Freehills) before he and Same discovered the opportunity to rent furnished city center apartments to affluent backpackers.

The company evolved into Living Corporate Apartments with a focus on more reliable, long-term corporate rentals.

The duo embarked on buying and selling apartments in a booming real estate market and made a million dollar profit.

Still modest at the time, these revenues supported the start-up of Zoupon, which became, in 2011. The company shamelessly drew on the American startup Groupon, which had reached $ 1 billion. dollars in revenue but had not yet entered the Australian market.

“Venture capitalism did not exist at the time,” Schwab recalls. “We were our own funders. We haven’t bought a house or a car and invested in ourselves.

The duo quickly learned that the small businesses that provided the platform were enthusiastic, but focused more on customer profitability rather than building a sustainable customer base.

They soon realized that travel was more attractive because the size of the transaction was larger. Plus, hotels genuinely care about their brands and make sure their guests have an amazing experience. Therefore, filling the remaining rooms with a fixed cost basis is a win-win classic.

“Hotels with smart revenue managers can make millions of dollars with Luxury Escapes and we are an integral part of many of their marketing plans,” Schwab said.

He says founders of successful, consumer-oriented online businesses don’t need to be a tech geek per se.

Rather, he must know how to understand customers and manage products, while being jack-of-all-trades. “None of us are coders or engineers but we have always been able to make specifications [specifications] and manage a product from concept to exit.

During this time, Schwab kept his finger on many entrepreneurial pies, most notably as president of the online art market and the beauty booking marketplace Bookwell.

He is a member of the board of directors of Private Media, a brainchild of veteran editor Eric Beecher. He writes for the company’s irreverent website, Crikey, speaking on topics such as the need to disband Fortress Australia and the imperative to take vaccinations seriously.

Schwab has been a director of the Myeloma Foundation since 2010.

To complete the loaded CV, Schwab authored the authoritative volume in the 1980s: Pigs at the Trough: Lessons from Australia’s Decade of Corporate Greed.

But her primary focus will remain luxury escapes as her most successful venture navigates uncharted post-pandemic waters.

“COVID has proven that we are an incredibly resilient business,” he says. “We were able to invest heavily in the product that we would not have done otherwise.

“We are very confident in 12 months we will have an amazing product that customers will absolutely love and we will be a much better company after surviving the pandemic.”

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