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