Richest 250: Even after 50 years, titan of tourism Graham Turner can’t kick travel bug
Flight Centre boss Graham Turner is optimistic about the recovery of the wider public’s travel habits – even if he believes it will take some time to get back to pre-Covid levels.
Graham Turner has spent 50 years trying to satisfy his appetite for travel. He keeps failing to kick the habit.
Turner is a titan of the travel industry, but it has been a good 25 years since his mates Geoff Harris and Bill James announced they were stepping down from board roles at Flight Centre and leaving Turner in charge as chief executive. He remains in the job today, toiling away while all three of them – who co-founded Flight Centre in 1982 as a shop basically illegally selling discount airfares – reap the rewards of his hard work as major shareholders of the company.
Turner has seen it all during his time in charge, having led the business through economic downturns, wars and terrorist incidents that would bring most international travel grinding to a halt the rise of the internet, which was supposed to bring an end to their retail shop network; the global financial crisis; and most recently, Covid.
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The pandemic had a huge impact on the travel industry, and Flight Centre as well. The business is rallying, and Turner is optimistic about the recovery of the wider public’s travel habits – even if he believes it will take some time to get back to pre-Covid levels.
“Everything points to a two-year blip that will probably last four years,” he says. “If you look at the long-term trends, travel normalises and gets back to pre-event volumes pretty quickly, then grows quickly. That tends to be the trend over the past 30 or 40 years. There will eventually be steady growth of 5, 6 or 7 per cent annually, almost regardless of what seems to happen in the world.”
This year marks 50 years since Turner and James famously set up their first business, Top Deck, in London. Top Deck was a bus tour business that started after the duo met at a London party, then bought old buses, put kitchens and bunk beds in them and toured Europe.
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“The family celebrated Jude’s birthday on Lord Howe Island, but remarkably there are countries even Turner hasn’t visited”
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Nine years later, they had returned to Australia and set up, with Harris, what would become Flight Centre. Turner is still in the driver’s seat.
“It is funny, when you look back it doesn’t seem long ago. When we started Top Deck it was about getting the travel bug out of the system and having a lot of fun with friends,” he explains. “We decided after a couple of years we could make it a business.
“It has been a fairly varied journey. If you’d asked me then, I would have been thinking about how to grow the business and diversify it, but any business over a long time has its ups and downs. I generally have been pretty lucky, I think.”
These days, Harris is dabbling in private equity pursuits and backing philanthropic ventures, and James is a respected historian of the Kokoda Trail. All three of them are on The List, thanks to their Flight Centre shares, but also have diverse interests and other investments.
Turner and his family do too. Wife Jude set up the Spicers Retreats luxury resort business, a part of which is being sold off in a $130 million deal. (The Turners have kept four of the properties.)
Son Matt runs 99 Bikes, which grew quickly during Covid and has lately been dealing with the classic business problem of a stock overhang, while daughter Jo has the activewear brand LNDR in London.
Turner still plays a spirited game of touch football regularly, and the family had a white Christmas at picturesque Lake Louise and Banff in Canada’s Rockies. He and Jude often spend time at their holiday house at Noosa, and they kept travelling for work even at the height of Covid, when most planes flew with plenty of cargo but few passengers.
The family celebrated Jude’s 70th birthday in March on Lord Howe Island, but remarkably there are some major countries in the world even Turner hasn’t visited.
“As you get older, you like going to places you know and like. We would like to go to Japan – we’ve never been there. Everyone says it is spectacular,” he says.
“We have got a few favourites. Paros island in Greece is one; we went there for five days in July. That is the sort of great place to keep going back to. There’s good mountain biking and the food is good.”
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TURNING POINT
Turner says Covid was the biggest challenge Flight Centre has faced and describes the issues the travel companies faced as ‘devastating’
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In short, Turner seems to have plenty to keep him occupied. So why, at 73, does he keep working?
He chuckles softly and replies in his distinctive laidback drawl. “Have you been speaking to my wife? She’s fairly keen for me to take more of a step back,” he says. “But I still enjoy what I’m doing. It is the challenges that keep coming. I can assure you that Covid was the latest big challenge for us. We’re in 26 countries now, so there are still things that come up from time to time that are challenging.
“There is a challenge of being in business, but also growing the business and working together with people all over the place, in different areas of the travel industry. It still really is stimulating.”
Turner also points out that he tried to step away once before, famously taking a sabbatical from the CEO role in 2007 in a supposed attempt to recharge his batteries.
“In a public company the board is always talking about succession and you think there’s no better time than now [to take a break],” he says. “So I did that sabbatical and then the GFC hit, and I wasn’t particularly enjoying the sabbatical and I needed to get back to the job. Well, I thought I did anyway. It’s the sort of thing that you try once to see if that’s what you want to do – that’s what the board wants you to do.
“But I still had the fire in my belly, and I still do now. It is the same with my senior people. It doesn’t matter if you’re young or old, you have to have the fire in the belly and it has to be something you really want to do. And if you lose that, then it is time to go.”
Turner says Covid was the biggest challenge Flight Centre has faced – “you look back at September 11 and the Gulf wars but compared to this [Covid] for the industry, they paled in comparison – and describes the issues the travel companies faced as “devastating”.
When Covid started locking down much of the world from March 2020, travel virtually stopped. Flight Centre went from 21,000 employees to about 7000 over a couple of months and the business would rack up a $2.3 billion loss. It would also need more than $1 billion in emergency and other funding from investors that would dilute the three founders’ stake in the company.
Turner, not surprisingly, is no fan of the lockdowns state governments put in place during the peak of the pandemic.
“Everyone blames Qantas and airports for queues and lost luggage, but when the government and states shut borders, it had devastating consequences. There was a futility to it all – China [where there were harsh lockdowns until the government opened the borders earlier this year] is a great example of the futility of locking down or half locking down. One hopes we have learnt from that.”
Flight Centre has had to become a more nimble business, Turner says, but more importantly it has diversified its operations across the past few years. It now books more than $10 billion worth of corporate travel, with holiday and leisure bookings now only about 44 per cent of its total travel volume. It has also reined in its costs, becoming more efficient while investing in technology and making acquisitions.
North America is now its second-largest market, and one Turner says has lots of potential for further growth. “We’ve only got a tiny percentage of the market share there so the opportunities are enormous. You just have to make sure you have the offerings people want. But in a couple of years the northern hemisphere will outpace the southern for us.”
In the meantime, he will keep tracking airfares on the “Turner Index” chart on his office wall, which shows how Flight Centre has helped bring airfare prices down over four decades.
He says the current high prices lucky travellers are shelling out to head overseas should soon abate too.
“There are still plenty of challenges getting back to the same margins and profits in the international corporate business,” he says. “There’s still only about 67 per cent capacity [out of Australia compared to pre-Covid], but the Chinese carriers are coming back and that will help keep everyone else honest.”
The 2023 edition of The List – Australia’s Richest 250 is published on Friday in The Australian and online at richest250.com.au
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