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LayAway Travel offers new way to book, pay for holidays

Sydney start-up LayAway Travel has introduced a new way to book and pay for holidays online with the launch of its website in Australia this week.

Founded by Andrew Paykel, of Fisher & Paykel Appliances, LayAway Travel offers customers a range of domestic and international holiday packages, which they can book and pay for in weekly, fortnightly, or monthly instalments over a 5-24-month period in advance of the trip. Customers are not required to pay a deposit, fees, or interest.

The company’s managing director Andrew Paykel said the start-up will make worldwide travel accessible for more Australians. “With the rising cost of living, it’s not easy for families to get a lump sum together to book a holiday in advance without reaching for the credit card, and we all deserve a break,” Paykel said.

The company has three core audiences: families with young children, retirees and school and sports groups, which have all been overlooked by lay-by travel services in the past, according to LayAway Travel.

The length of time between a customer’s booking and their final payment, typically 12-16 months, however, means that LayAway Travel’s cash flow is very slow moving. The company’s underlying philosophy is that customers’ funds remain theirs until payment is complete.

LayAway Travel described the business model as a natural barrier to entry for competitors. The company has budgeted for the initial 12-16-month delay in profitability and anticipates it will become cash flow positive in two to three years. It has also developed specialised intellectual property and a unique lay-by platform to support future travel services.

In addition to Paykel, LayAway Travel’s marketing director Peter Russell and a group of like-minded investors funded the start-up with just under $1 million. According to the company, the combined total investment to date is in line with its business plans.

LayAway Travel started  as a similar business in New Zealand in 2009, however, this is the company’s official Australian debut, after a soft launch 18 months ago.

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