You might be reading this news piece from your office desk or from a balcony in sunny Italy. It does not matter. Since the COVID-19 pandemic, we’ve seen a rise in flexible working arrangements, and this has had an impact on business travel both from the company and employee perspectives. 

On the one hand, many enterprises still value face-to-face meetings due to all the uncertainties in global supply chains and the need to train new remote staff. On the other hand, employees now have the freedom to work from their hometowns or from their “healing” destinations even if it’s thousands of kilometres away from the main office, ultimately coining the new term “bleisure”.

Accordingly, Flight Centre (ASX: FLT) is likely to place even more confidence in its global corporate travel division, which has continued to outperform. Despite the market only tracking 70-80% of pre-pandemic levels, the division claimed that it had achieved record-breaking Total Transaction Value (TTV) in FY23, though the exact figure has not been disclosed yet

For this, Flight Centre has updated its FY23 Corporate TTV guidance to reach $11 billion. This represents over 20% growth compared to the previous TTV record of $8.9b in FY19. The updated guidance is reflective of the multi-billion-dollar pipeline of new accounts won—both from competitors and accounts that were previously unmanaged—across both its corporate travel brands FCM and Corporate Traveller during the pandemic. 

Commenting further, Flight Centre Managing Director Graham Turner said, “We are pleased with our continued recovery as demand has generally rebounded solidly across both our leisure and corporate travel businesses.”

“In corporate, we have delivered record TTV while investing significantly for the future by securing large volumes of new accounts, expanding our sales force and introducing innovative new platforms and products for our customers, which should lead to stronger returns in the years ahead.”

Turner also mentioned that the leisure travel division is performing well too, achieving scalable results from post-pandemic enhanced productivity and efficiency. The division has been offering more diverse products and services under a strong brand name. 

Collective positive performance from both divisions prompted Flight Centre to upgrade its total TTV guidance to hit $22b, almost a 115% growth on $10.3b TTV reached in FY22. If succeeded, the FY23 TTV will become the Company’s second strongest full year result behind FY19 result of $23.7b.

Flight Centre now expects a total underlying EBITDA anywhere to land between $295 million and $305 million for the full year ending in 30 June 2023, The new midpoint of $300m represents a 7% increase on the midpoint in the Company’s previously targeted range of underlying EBITDA between $270m and $290m, and a $483m turnaround on the underlying $183m loss incurred in FY22.

Travel demands are not likely to cool down soon for leisure travellers too as they enjoy higher incomes. Flight Centre revealed that its leisure sector recovery gained momentum during the seasonally busier second half of FY23, in line with pre-COVID levels in May 2023. These people are willing to spend on unique experiences and seek for a new normal in travel – one that delivers on quality and value. Potentially influenced by social media and entertainment, travellers are landing in lesser-known destinations in search of cultural immersion. As of March 2023, global spending on experiences was up 65% while spending on things is up 12% compared to 2019.

In response to the changing consumer preference, Turner mentioned that Flight Centre has invested in luxury travel collection by acquiring luxury travel operator Scott Dunn in the second half of FY23, and recently its luxury travel supply and events business Luxperience has continued to bolster Company presence in the leisure travel and luxury travel spaces. 

“Looking ahead, our expectations are that leisure travellers will continue to prioritise holidays and experiences over other areas of discretionary spending, as we have seen in the past and as evidenced by the consistent year-on-year growth in outbound travel in large and important markets like Australia.”, added Turner.

FLT is expected to release audited FY23 results on Wednesday, 30 August 2023.