Luxury Escapes trials concept store in Melbourne

Heather McIlvaine

21st Aug 2017

In an effort to raise the bar on customer experience, discount travel site Luxury Escapes has opened The Lounge, a pop-up concept store in Melbourne.

The bricks-and-mortar store, located on Little Collins St near Swanston St, offers customers a chance to visit potential holiday destinations using virtual reality technology, consult with experts and enjoy perks like free coffee and massages.

“Most travel agents do not offer a great buying experience,” Adam Schwab, managing director of Lux Group Limited, Luxury Escapes’ parent company, told Internet Retailing.

“We wanted to make the buying process as enjoyable as the trip itself and get customers in the right frame of mind when they book it, not when they’re on the plane,” he said.

Schwab said The Lounge is more like an Apple Store than a traditional travel agent, with iPads located through the store for customers to browse Luxury Escapes’ highly discounted travel packages.

Since launching in 2013, the site has seen rapid growth. Luxury Escapes today turns over more than $200 million a year, according to Schwab, and has seen a 40 per cent increase in the frequency of repeat purchases.

“Our growth has really been driven by incredible viral growth from our best customers. Repeat purchases are a key drive of the business,” Schwab said.

As retailers wise up to the fact that consumers are prioritising experiences over physical goods in their budgets, the travel sector is becoming more competitive.

Catch Group recently launched its own luxury travel site, Bon Voyage, while Chinese e-commerce giant Alibaba has ramped up its travel offering, Fliggy. Meanwhile, Airbnb is on track to facilitate 100 million stays this year.

Schwab is confident that Luxury Escapes offers something different than most sites selling holiday packages. “We don’t go through wholesalers. Our consultants go straight to hotels to negotiate and have a much closer relationship with them,” he said.

“The key data point is that 91 per cent of customers weren’t planning to go to the hotel or tour until we suggested it. We literally find the world’s best holiday and make them affordable. We have the best content globally,” he said, adding that competition “makes us better at what we do.”

Running from 27 July through 11 September, the pop-up store gives Luxury Escapes a chance to make this case to customers face-to-face, and Schwab is open to launching more stores in future in order to do so.

“This is the first one and so far it’s been very successful, but it’s very early days” he said, adding, “I’m inclined to roll out pop-ups in different cities or try permanent bricks-and-mortars across Australia.”

At the moment, the focus is on rebuilding the Luxury Escapes platform, which is set to launch in early 2018. Schwab said this will allow the company to offer more options, like ski packages.