All posts by Martin Kelly

Webjet Diversifies as Sales Grow

ONLINE retailer Webjet is starting to diversify income by placing its airline booking engine – which already generates most of the company’s revenue – on three new websites within the next two months.

Managing Director David Clarke said the booking engine will soon feature on the Travelmate and Need It Now consumer sites, in addition to the Creative Holidays trade site.

The booking engine is part of the Travel Service Aggregator technology platform Webjet developed in conjunction with Galileo and Microsoft.

It can process up to 1000 transactions a minute and has been a key reason for the recent strong business performance of Webjet, which recently announced a net profit for the six months to December 31, 2004, of A$254,484.

Further profit announcements are expected with sales continuing to surge.

February, with just 28 days, was a record month with A$8.1 million in sales (11% up on January) driven by 22,000 bookings covering 30,000 passengers.

“Just wait until you see March,” Clarke said.

He added that TSA, which is able to aggregate and display product from disparate suppliers, has allowed Webjet to increase sales while controlling staffing costs.

“Most of the incremental growth goes straight to the bottom line,” he said.

“At Webjet we have 16 full-time staff,” he said. “The throughput of the best run traditional travel agencies is around $1 million a year per staff member – we can do A$6 million per person.”

Clarke said Webjet operates on a gross margin of 7% before costs – 6% is fixed while the remaining 1% goes to marketing, generally evenly split between online and offline.

“I believe you’ve got to be a visible presence in the real world – it’s no good just being a cyber space identity.”

While Clarke was reluctant to forecast because of ASX rules, he said “if the model holds true I believe our net margin can fall within the 1.5% to 2% range by the end of the year based on current trends.”

Current rampant growth rates will be difficult to maintain, he said, although the company is aiming to double existing (low-commission) airline traffic, which currently dominates income at 60%.

Another 20% comes from car, hotels, and insurance, while the remaining 20% comprises services fees.

Webjet charges a A$6.95 service fee for every transaction, no matter what volume or amount.

“It’s been in place for more than a year and we have had absolutely no resistance,” he said.

Meanwhile, whatever resistance there was to investing in Webjet has evaporated.

Over the past seven months Webjet shares have increased from three cents to a high of 22 cents (check) and are currently trading at around 16 cents.

Daily trading volumes regularly exceed one million shares, resulting in major paper profits for some of the biggest names in Australian travel.

Significant investors who bought in or struck options deals when the stock was scraping the bottom of its range include Harvey World Travel (19%), Cendant (9%) and Australian Outback Travel (3.5%), which owns Need It Now and Travelmate.

Both Cendant (GDS, hotels and car – Avis, Budget) and Australian Outback Travel (Australia and NZ hotels) are also using Webjet to distribute its products, while the HWT alliance provides it with buying power.

The frenetic stock activity has inevitably led to speculation and rumour.

But Clarke said there has been little or no recent change in the Top 20 shareholders.

“We are not sitting here trying to organise a buyout or takeover,” Mr Clarke said.

“If someone makes an offer, we’ll consider it but it’s not in the business plan or strategy.”

Ends/ 22 March, 2005

Record Traffic Levels For Aussie Travel Web Sites

CONSUMER traffic to Australian travel websites is at an all-time high, according to Nielsen//NetRatings and Hitwise.

Not surprisingly, given the launch of Jetstar, the sharpest growth has occurred within the airline sites over the past two years.

However, hotels and travel agencies are not far behind.

According to Hitwise:

  • Commercial Airlines >> Increased 69% between December 2003 and January 2005
  • Travel Agencies >> Increased 40% between December 2003 and January 2005
  • Destinations & Accommodation >> Increased 46% between December 2003 and January 2005

Meanwhile Nielsen//NetRatings reports a similar pattern.

Senior Analyst Andrew Eckford said the trend has been particularly evident during the first three months of 2005.

“Over the past few weeks we have seen consistently more than 630,000 unique browsers a week to audited travel sites.

“This is significantly higher than seen for any week since we launched the Market Intelligence measurement for the travel industry.”

Tables Below From Nielsen//NetRatings and Hitwise:

 

Nielsen//NetRatings Market Intelligence, Domestic Traffic to Travel Sites by Category for February 2005

Category              Unique Browsers      Page Impressions

Travel Portals       1,272,537                  10,659,606
Destinations         488,256                      5,065,915
Hotels                   203,342                     1,640,914
Rental Cars          133,497                     1,576,388

Hitwise – Travel – Agencies ” February 2005 ” Ranks by ‘Visits’
   
Name                           Domain                                               Market Share

1 Flight Centre             www.flightcentre.com                 11.50%
2 Webjet                      www.webjet.com.au                     6.31%
3 lastminute.com.au    www.au.lastminute.com              5.96%
4 Expedia.com             www.expedia.com                         4.47%
5 ZUJI Australia           www.zuji.com                                 3.91%
6 Best Flights              www.bestflights.com.au              3.44%
7 Travel.com.au          www.travel.com.au                        3.18%
8 Octopus Travel        www.octopustravel.com/au         2.50%
9 ITN.net                      www.itn.net                                    1.92%
10 ninemsn Travel       www.ninemsn.com.au                 1.90%

 

Hitwise – Travel – Destinations and Accommodation ” February 2005 ” Ranks by ‘Visits’
   
Name                         Domain                                              Market Share

1 Wotif.com                www.wotif.com                            6.71%
2 HotelClub.net           www.hotelclub.net                      5.70%
3 RatesToGo.com      www.ratestogo.com                   2.93%
4 Need It Now            www.needitnow.com.au            1.96%
5 TravelMate              www.travelmate.com.au            1.91%
6 Trip Advisor            www.tripadvisor.com                 1.60%
7 Totaltravel.com       www.totaltravel.com                   1.37%
8 Visit Victoria           www.visitvictoria.com.au           1.36%
9 Lonely Planet          www.lonelyplanet.com               1.35%
10 AAA Tourism        www.aaatourism.com.au           1.30%

Nielsen//NetRatings Market Intelligence, Top Destination Sites for February 2005


                                            Unique Browsers                 Page Impressions

  
1 visitvictoria.com              161,372                                  1,353,450
2 ourbrisbane.com             154,053                                  1,235,204
3 visitnsw.com.au              60,383                                    559,331
4 discovertasmania.com    48,739                                    813,611
5 westernaustralia.com     39,281                                    337,420
6 southaustralia.com          21,653                                    319,092

Ends/ 22 March, 2005

Travel.com.au Launches DP

New management at perennial under-achiever Travel.com.au Limited (TVL) has launched Dynamic Packaging on both its sites – travel.com.au and lastminute.com.au.

TVL has also ended its dual supplier approach to GDS, concluding a long-standing relationship with Sabre Pacific and fully committing to Amadeus, which has a stake in the company.

These moves come after disappointing results for the six months to December 31, a period in which TVL lost A$745,000 compared with a net profit of A$9000 for the corresponding period in 2003.

Encouraging sales growth of 9% was completely overshadowed by a 20% blowout in expenses largely due to the relaunch of the main site with a new design and booking engine.

Sales were driven solely by lastminute.com.au, which grew 35%, while Travel.com.au continued to disappoint with a 1% fall in sales. The bulk of its bookings are still handled offline.

Acting CEO Adam Johnson, who replaced incumbent Bill Gair in mid-February, said the focus at TVL – which employs 80 staff – is on growing automated sales.

He said this approach has been given strong impetus through the acquisition of Arnold Travel Technology (which Johnson used to run) via a share issue late last year.

As a result, interests associated with Arnold now control around 25% of the company. These include Johnson and new Chairman Roger Sharp.

Johnson claimed the early results from its Dynamic Packaging flight/hotel offering were encouraging, adding that automated booking numbers had increased on both sites as customers became familiar with the new booking engine.

“We’re already ahead of budget and are going to be promoting it more over the next couple of months,” he said.

Its Dynamic Packaging product is branded as ‘TripSaver’ which allows clients to “book flights and hotels together and save”.

Chairman Roger Sharp described Travel.com.au in the six month results as a company which has “traditionally operated as an offline travel agency with a website offering limited online functionality”.

It is a situation he aims to change.

Sharp said the aim now was to slow the cash burn – at December 31, TVL had reserves of A$2.5 million compared with A$4.4 million six months earlier – while growing sales.

But how? “Just having the Arnold booking engine in there means we can reduce costs, so as we grow we’ll need fewer people to handle a larger number of bookings,” said Sharp.

“The trick is to get growth in online transactions, and get it past our offline business.”

Ends/ 22 March, 2005

JTB and Viator Combine to Distribute Japanese Product

A new distribution deal between JTB Corp, Japan’s biggest travel company, and Sydney-based Viator is already yielding strong sales, according to Viator CEO Rod Cuthbert.

Cuthbert said Viator has now added JTB’s huge Japanese destination product range to its database, which is marketed through through Viator.com and 500 affiliate sites such as Hotwire, Travelocity, Zuji and Priceline.com.

Products include sightseeing and destination activities like the famous Shinansen Bullet Train tours.

“We’ve been surprised and pleased at the booking levels so far,” Cuthbert said.

“Clearly, given the perceived language challenges a destination like Japan presents, people like to get themselves organized before they go.”

Cuthbert said the initial product focus is on Tokyo, Osaka, Hiroshima and Kyoto, while the primary target market is inbound English-speaking travellers to Japan.

Cuthbert said Viator has partnered with the Sunrise Tours division of JTB.

“It’s a clear leader in English-language tours to Japan,” he said.

“There’s a bias towards educating visitors about the culture and history of Japan, and that’s exactly what our customers are looking for.”

Viator claims to be the world’s leading online aggregator and seller of destination product. Purchases are typically made by travellers prior to departure.

JTB Corp. is Japan’s largest travel company. Founded in 1912, it has offices worldwide and annual revenues in excess of US$13 billion.

More than seven million overseas travellers are expected to visit Japan during 2005, according to JTB estimates.

Ends / March 22, 2005

 

Strong Foundations For Decipher.biz

Decipher.biz – billed as the world’s largest tourism data portal – today announced it has signed three of Australia’s largest travel companies and all state tourism bodies as foundation members.

CEO Mark Phillips said Decipher, which aggregates tourism data from more than 200 sources and features a range of business planning tools, wants to further boost sales of its resources through industry resellers. 

“We’re looking for distributors and want to establish a network of resellers,” Mr Phillips said. Decipher packages start at A$550 for small companies, up to A$33,000 for large corporations.

Mr Phillips said Decipher had been buoyed by strong industry support with hotel group Best Western, hire car companies Avis and Budget signing on as foundation members.

“They view it as a valuable business planning tool – it allows them to access the latest data from around the country and build that information into their business strategies,” Mr Phillips said.

Other partners include AAA Tourism, Australian Tourism Export Council, Tourism Queensland, Tourism Tasmania, South Australia Tourism Commission, Northern Territory Tourism Commission, Australian Capital Tourism, Tourism Australia, Tourism Victoria and Tourism NSW.

He said www.decipher.biz has attracted more than 7000 unique visitors since its launch last month by the Minister for Small Business and Tourism, Fran Bailey, with the average visit lasting 20 minutes.

“I think this shows we have really hit the mark,” Mr Phillips said.

Managing Director of Decipher Technologies, Peter O’Clery, said Decipher aggregates the latest statistics from disparate sources such as the Australian Bureau of Statistics, Tourism Research Australia, State and Regional tourism organisations and private companies like Roy Morgan.

“It is designed to help tourism operators of all sizes, as well as local governments, regional tourism authorities, destination marketers and industry organisations.”

Decipher has been in development for many years and is the result of a working alliance involving the Sustainable Tourism Cooperative Research Centre, Amadeus and international consultants Ernst & Young.

Much of the funding has come from the Federal Government, which identified poor access to as a major industry issue in the late-2003 Tourism White Paper.

Decipher Technologies is administered as a business unit of the CRC for Sustainable Tourism Pty Ltd, which is responsible for developing and managing the commercial operating system.

Tourism contributes nearly 6 per cent of Australia’s employment and earns about A$17 billion in exports.

Ends / 22 March, 2005

Totally Teetotal on Technology

Can you survive a week without your mobile and Blackberry? Yeoh Siew Hoon goes cold turkey in the golden land of temples – Myanmar

I’ve just been reading a report about what it takes to keep the 21st century business traveller happy.

Apparently, the four top requirements are a direct flight, a flat bed, a Blackberry and being met at the airport – so said 1000 business travellers who were surveyed at the recent Business Travel Show in London.

According to the survey:

  • 62% said a direct flight would make their journey more enjoyable
  • 48% craved to see a chauffeur hold up a card with their name on at their destination airport
  • 46% said they wouldn’t be parted from their Blackberry for the world
  • 43% longed for the undeniable luxury of a flat bed on their long-haul flights

So there we have it – the 21st century business traveler is a spoilt and insecure species.
 
Spoilt because he or she craves luxuries and comforts and insecure because he or she can’t do without their communication devices – some psychiatrists believe our fear of being without our mobiles or Blackberries stems more from insecurity than conscientiousness about our work.

In other words, we all need to be needed and we all want to feel indispensable in our jobs. Imagine if everything ran smoothly while we were away and were out of touch …

Anyway, the survey got me thinking that if they were ever to do similar research on what it takes to keep a 21st century leisure traveler happy, I am quite sure that top on the list would be no mobile phones and no Blackberries.

I say this because I have just spent a week in Myanmar, mobile-less and email-less.
 
And I am glad to say I survived. In fact, more than survived. I felt a sense of freedom and liberation that I had not felt in years. It was like walking on winged feet through a golden land of temples.

At first, it felt strange. In the first few hours of arrival, my mind kept wandering to my phone and laptop, wondering what messages I was missing and if I had missed any deadlines. My fingers actually started to itch.

Switching off my mind was infinitely harder than switching off my electronic gadgets.

It’s hard when you are an SMS addict, like I am, to suddenly go cold turkey. But let’s face it, if you have to go cold turkey, Myanmar is the best possible rehabilitation clinic on earth for us urban, email, mobile phone junkies.

This is a land that is timeless. It’s a place steeped in time. People have time. They take time to do things. They do not rush. They sit. They talk. They pray. They smile a lot. They do not have much but they have a lot.

It teaches you not to hurry because why worry? There is time.

By the time I went to bed at the Pansea that first night, I was in step with Myanmar.

I dreamt of white clouds, not Blackberries.

During the course of the week, there were temptations thrown my way. Perish the idea but some hotels now actually have business centres with Internet facilities.

The temptation was strongest on “The Road to Mandalay” cruise from Mandalay to Bagan where I had to spend three nights on the ship in really close proximity to an Internet connection.

It was tough but whenever I felt the old habit creeping up on me, I immediately ordered a gin tonic, recited Rudyard Kipling and counted flying fishes.

I therefore recommend Myanmar to any 21st century business traveler who wants to learn to do without his or her Blackberry.

Truth is, it’s amazing how easy it is to do without when you are forced to do without.

Ends / 21 March, 2005