Adam Schwab is an award-winning entrepreneur who, with no outside capital, grew Luxury Escapes into one of Australia’s most lucrative e-commerce businesses in just six years. Luxury Escapes generates more than $350 million in yearly revenue with operations on four continents and more than 200 employees.
Adam Schwab: History
It’s hard to ignore Schwab: he’s a marathon runner named one of Australia’s Top 45 Influencers by Men’s Style magazine in 2014, and he penned the best-selling book Pigs at the Trough in 2010. And he can talk faster than most people can think. Schwab’s day job is co-founding and working on Luxury Escapes, which has been named Australia’s fastest-growing company (twice) by The Financial Review and is one of the most exciting travel companies in the world. In August 2017, Australian retail sales dropped to their lowest level in over five years, and once-thriving shopping districts had turned into a sea of ‘for lease’ signs and opportunistic pop-up businesses. What kind of entrepreneur would risk going from a digital-only firm to launching a brick-and-mortar store in a bleak commercial environment? He surprised everyone when the company opened a real storefront for Luxury Escapes on Melbourne’s Little Collins Street in October 2017. “We’ve always found that physically contacting clients is quite successful,” he remarked. Flight Centre’s founder, Graham Turner, referred to his businesses as “huge billboards.” But convincing clients to believe them and recognise that it wasn’t too good to be true had always been one of their biggest challenges in the luxury vacations industry. ‘That can’t be right,’ a number of people said after seeing their advertisement. ‘How do you manage to be so much less expensive than Expedia?’ That was a major factor. The store isn’t the only place where the brand may be found. Roadshows also back it up. Schwab spoke about an event in Brisbane when a dozen or so employees described Luxury Escapes’ business model to over 1000 travel enthusiasts, some of whom travelled four hours to attend. Adaptability, on the other hand, is crucial. “We’re continually trying new ideas because we work,” Schwab said. Schwab’s concentration on Luxury Escapes enabled him to tackle two problems: one for the company’s three million clients and the other for thousands of hotel partners across the world.
The company curates the best travel packages instead of offering 50,000 hotels with no content, allowing its members to choose from 30 of the world’s best holidays at any given time, at a rate typically half that of almost every other travel agency. “We’re able to produce considerable added profits for our hotel partners,” Schwab stated. “In essence, we’re now a crucial marketing channel and have worked with practically every important brand internationally, from Park Hyatt to One&Only, Kempinski, Four Seasons, Ritz Carlton, and Hilton.” But, of course, while travel is increasingly organised online, the sector still has a strong presence on the high street, thanks to shops like the aforementioned Flight Centre. “It’s a tremendous industry,” Schwab emphasised. Because they’re a much more established firm now, they’re probably not growing as fast as they were in the 1980s, but they still have a $20 billion turnover. In Australia, they’re a behemoth. Luxury Escapes is a considerably smaller company (though it is developing quickly, and in December, it bought the Catch Group’s travel assets). Still, it has a strong point: extraordinarily high net promoter scores. “Our customers like us more than they like anyone else’s customers,” Schwab stated. According to their net promoter score, Luxury Escapes has a score of 73, which means that more than 90% of their clientele would recommend them to friends, as opposed to an industry average of 20 or 30. And, given that consumers can visit a store that is modelled after a high-end airport lounge and offers free Wi-Fi, an on-site massage, a barista, snacks, virtual reality goggles, and a free BMW transfer service for members, those recommendations are certain to increase.