As you may know by now, STA Travel Holding AG, the Swiss-based parent company of student and youth travel company STA Travel across the globe, has announced that it is filing for insolvency. Although this ongoing pandemic has tested even the most established of travel businesses to the limit, we are deeply saddened to hear this news from a company that has been a staunch advocate for student travel for many years.
In these times of great uncertainty, there is one thing that we know for sure. Students and young travelers are amongst the most resilient and mobile groups out there. In our 20 years of supporting young travelers in experiencing the world, we’ve collectively endured 9/11, the global financial crisis, and countless incidents of global unrest. Every single time the sector has come back stronger than ever. We believe that this time will be no exception.
The opportunity is huge, with an estimated 370m young travelers accounting for $400b of spend globally. The USA alone welcomes over 1m international students per year, the UK 435k, and Australia 380k. In their ongoing desire for new, unique, and formative experiences, they collectively invest significantly more into their host country than they take out.
Although the recent news will undoubtedly be unsettling, we want to offer our assurance as to the health of StudentUniverse. StudentUniverse has already seen the green shoots of recovery, with revenues quickly approaching 30% of 2019 levels. This has significantly outperformed both expectations and the wider travel market.
As a digital-first business, we have been able to continue to trade without significant exposure to the declining offline retail sector. We have also not been impacted by the need to maintain physical retail locations. Our globally centralized structure has allowed us to keep our costs manageable, with both our UK and Australian businesses turning a profit in July. We’re also incredibly excited to share that we will be expanding into Canada later in 2020, with further global expansion slated for 2021, demonstrating our belief in a bright future. Alongside this, as part of the Flight Centre Travel Group, we have secured a large capital investment, extending our cash runway significantly to weather a much longer downturn in trading.
Supported by our student verification technology, we have an engaged and growing membership base of reachable users of over 1.25m young travelers globally. We are committed to working hard to ensure that the market doesn’t only survive, but will once again thrive in the brighter days ahead.