Qantas shopping spree extends to online travel business

An unlikely partnership between a Byron Bay start-up, a private equity firm and Qantas is set to turn TripADeal into Australia’s biggest online travel agency.

TripADeal founders Richard Johnston (right) and Norm Black (left) are selling a controlling stake in the Byron Bay travel business to Qantas. Picture: Nigel Hallett

An unlikely partnership between a Byron Bay start-up, a private equity firm and Qantas is set to turn TripADeal into Australia’s biggest online travel agency.

Qantas announced on Tuesday it had bought a 51 per cent stake in the company from founders Norm Black and Richard Johnston and BHG Capital’s Ben Gray.

Mr Black said a condition of the sale was to maintain TripADeal’s base in Byron Bay where the company employed over 100 people.

“Qantas is really invested in the fact that the business stays there and grows there, so now there’s an opportunity to potentially add more jobs to the region after what we’ve endured this year,” he said.

“It was a really big catalyst to it, the opportunity to have a much bigger business and overnight we essentially became the biggest database in Australia for an online travel agency.”

The reason for that is because Qantas has embedded the business in its juggernaut frequent flyer program, which boasts a membership of 14 million people.

As a result, frequent flyer points can now be used as “currency” when booking TripADeal travel packages, and purchases can also earn points at a rate of three for every $1 spent.

Mr Black said they were hopeful the turbocharge effect of the frequent flyer tie-up would help triple or even quadruple the size of the business he founded with Mr Johnston after seeing an opportunity for affordable bucket-list travel.

“Through the 1990s and early 2000s, bucket-list experiences were pretty much exclusive to the elite and we thought it shouldn’t be that way, so we found a way to beat the system,” he said.

“By cutting out the middle men we were able to cut many little costs out of travel and build relationships with operators in over 30-countries. Those operators are literally like family members and it’s served us really well. That’s the attraction for Qantas. They saw an opportunity to share a piece of our DNA to develop out these bucket list experiences.”

Over almost 12-months of discussion and meetings, the majority-stake sale was decided with the potential for Qantas to buy the remaining 49 per cent after four years.

As luck would have it, the deal was finalised at the perfect time, with TripADeal in the midst of its biggest booking month on record.

“The Ukrainian war is going on and it’s not smooth sailing out there but the appetite for travel particularly among the baby boomer set to get out there and see the world is incredible,” Mr Black said.

“There’s this real feeling that people have been robbed of two years of their retirement time and they’re making up for lost time, that’s for sure.”

To that end TripADeal had sold out of Antarctic voyages to the end of 2023, and there was “enormous” travel booked for July, August and September.

“People are literally buying (travel packages) across the globe from the orang-utans in Borneo, to Antarctica to Alaska and Canada,” he said.

“Italy, believe it or not is back stronger than ever, and cruising is back stronger than pre-Covid. There was this whole talk about cruising being a white elephant moving forward after the Ruby Princess but cruising is outstanding and that’s really taken us by surprise.”

Although Qantas would not reveal how much it spent on the stake in TripADeal, Mr Black conceded he and Mr Johnston “would be okay”.

“There’s no doubt this has given us a pretty nice secure situation on a personal level to probably eat more than white rice moving forward,” he said.

At this point the pair would continue to have a hands-on role in the business which Qantas CEO Alan Joyce likened to the flying kangaroo itself.

“This company was established by three entrepreneurs 100-years ago and I think there’s a lot of similarities,” Mr Joyce said.

He said Qantas considered TripADeal their ticket for increased access to the $13bn online travel market, at the same time as engaging frequent flyers.

“We know that the number one thing people want to spend those points on is travel,” said Mr Joyce.

Packages to places like Japan and India will require up to 140,000 points plus $1400 per person twin share, regardless of the airline involved. Alaskan adventures cost from 250,000 points plus $2499 a person.