Flight Centre has survived the 9\/11 terror attacks, rise of the internet, global financial crisis, and coronavirus pandemic, but analysts and management see artificial intelligence as the biggest structural shift for the travel business yet.<\/p>\n
At its annual general meeting in Brisbane on Wednesday, Flight Centre\u2019s management warned AI will transform the travel industry for holidaymakers and corporate workers, with significant consequences for investors.<\/p>\n
Uncertainty over whether the Australian travel icon will be a winner or loser from new services linked to AI has sent shares 26 per cent lower over the past year, although chief executive Graham Turner emphasised the benefits of the technology on Wednesday.<\/p>\n
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By continuing you agree to our Terms<\/a> and Privacy Policy<\/a>.<\/p>\n \u201cAI has the potential to transform our industry and we are embracing it,\u201d he told the AGM. \u201cWe\u2019re embedding AI into customer service and operations, delivering measurable benefits for our customers and success teams.\u201d<\/p>\n Flight Centre said it has saved 64,000 hours in employee time by using AI to intelligently route customers\u2019 inbound travel queries at the same time as improving the booking experience. Virtual travel assistants powered by AI also now interact with its business travel customers as a travel companion. to answer questions and complete tasks autonomously.<\/p>\n \u201cThey\u2019ve been talking up the whole AI thing for at least a year,\u201d said Richard Hemming, the founder of the Under the Radar Report. \u201cAnd I actually think they will benefit more from it, than what they may lose. The major disruption to travel with the internet has already occurred, and people still see value in human travel agents otherwise they\u2019d only use the internet now.\u201d<\/p>\n Future of travel<\/p>\n Eventually, AI assistants could act as digital tour guides for high-spending business or leisure travellers, throughout a trip to offer additional services such as taxi, restaurant, or sightseeing bookings to cross-sell or up-sell services for travel operators like Flight Centre.<\/p>\n \u201cThe bigger impact (than AI) to Flight Centre\u2019s business is the overall macro and economic conditions,\u201d Mr Hemming said. \u201cIn US corporate travel they\u2019ve gained market share and they want to push into corporate (travel) more. So, I struggle to believe tech is going to kill this business, as it hasn\u2019t killed it before.\u201d<\/p>\n However, hedge funds and professional investors are betting that Flight Centre shares will extend 2025\u2019s horror run. As at November 5 it was among the most shorted stocks on the S&P\/ASX 200 Index, with nearly 11 per cent of its shares on issue held by traders who think the stock will fall further.<\/p>\n \u201cWhile AI presents us with opportunity, it does, of course, also represent a threat as competitive customers offerings emerge,\u201d said the group\u2019s chairman, Gary Smith. \u201cWe\u2019re very cognisant of this and are working diligently to combat these competitive threats and offerings globally as they arise.\u201d<\/p>\n Reasonably optimistic<\/p>\n At its AGM, the travel group guided for underlying profit to climb to between $305 million and $340 million over the 12 months to June 30, 2026, which would represent growth of up to 17.6 per cent.<\/p>\n This follows a soft year for travel over the 12 months to June 30, 2025 as holidaymakers worried over political change in the US and escalating tensions in the Middle East.<\/p>\n Mr Turner told the AGM he\u2019s \u201creasonably optimistic about the chapters ahead\u201d just as he was 30 years ago, when he founded the iconic group after backpacking around the world with his mate and business partner Geoff Lomas.<\/p>\n On Wednesday afternoon, Flight Centre shares were 1.4 per cent higher to $12.36, as its updated profit guidance largely met the market\u2019s expectations on strong results for its corporate sector and signs of improvement in holiday travel bookings.<\/p>\n Broker RBC Capital Markets kept a buy rating on shares and $16 price target. Management also used the AGM to flag that they\u2019re prepared to consider extending its strategy of growing via the bolt-on acquisitions of smaller travel businesses.<\/p>\n Mr Hemming attributed the negativity around the stock to ongoing worries that the business model of bricks-and-mortar stores will be flattened by online competition. \u201cShort interest has always been high in Flight Centre,\u201d he said. \u201cBut Mr Turner is a good operator with levers to pull. And the more people pay in travel the more reassurance they want (from a human rather than machine) in travel, which can cost a lot.\u201d<\/p>\n Others like Morgan Stanley\u2019s high-profile US internet analyst Brian Nowak have regularly suggested the online travel sector will be revolutionised as personal AI assistants suggest and book tailored holidays at the best prices. This will save travellers time in avoiding scrolling through websites for the best flight prices for example, according to Mr Nowak.<\/p>\n \u201cOver time, AI will help devise pre-packaged itineraries, and recommend specific flights, accommodations and experiences that best match consumers\u2019 needs. As a result, travel companies will benefit from higher customer conversion and repeat use,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"Flight Centre has survived the 9\/11 terror attacks, rise of the internet, global financial crisis, and coronavirus pandemic,…\n","protected":false},"author":2,"featured_media":284262,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[256,254,255,64,63,99,105],"class_list":["post-284261","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-au","tag-australia","tag-business","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/284261","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=284261"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/284261\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/284262"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=284261"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=284261"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=284261"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}