By Martin Kelly
Lastminute.com.au is finally breaking free of its dated UK-based technology platform and developing one of its own.
The popular site will also revamp its look and feel, while retaining the ‘love it or hate it’ pink branding, in a bid to improve its poor sales conversion rate which TRAVELtech estimates trails industry leaders by around 10 to one.
Managing Director Adam Johnson said the new site and back end will be ready for launch in early 2007, adding that consumer research is now under way to assist with project scoping.
“It will be a brand new Australian-built site featuring the latest Web 2.0 and Travel 2.0 tools,” he said.
“We want to build a site focused around usability.”
Johnson said Lastminute.com.au – a 75: 25 joint venture between Travel.com.au (TVL) and Travelocity which lost A$250,697 during 05/06 – is using clunky and costly 2003-era technology hosted in the UK.
“Lastminute.com.au has suffered from systemic administrative problems resulting from its reliance of remote systems … TVL is now repatriating management systems and processes to eliminate this problem,” the TVL annual report said.
The project is being overseen by General Manager – Commercial, Chris Meehan.
In another big change, the site will also embrace new positioning based around the tagline “Live Every Lastminute”.
It’s part of a move away “from being a $2 shop online” into higher-yielding territory, Johnson said.
“Price is clearly not the most important factor for customers,” he said.
Meanwhile, Lastminute’s profile will get a serious lift this financial year with parent company TVL boosting total marketing budget for its two main brands by 70% to A$2.6 million.
The majority will be spent promoting Lastminute.com.au, now clearly more important to TVL than online travel battler travel.com.au.
During 05/06, Total Transaction Value at Travel.com.au slumped 34.8%, while revenue fell 7%. Overall it lost A$23,000 for the year.
Lastminute.com.au, on the other hand, had a reasonable 05/06 (even though it lost more money thanks to incurring A$607,000 in impairment charges) on a number of measures, including a 51% increase in revenue to A$4.7 million.
Most of Lastminute’s income comes from selling hotel rooms on commission although it also offers flight, car hire and gifts.
Johnson says the brand has great recognition, while visitations are high with 244,000 average monthly unique visitors, according to Nielsen NetView figures quoted by the company.
But it has an awful conversion rate.
TRAVELtech estimates that, based on site visits and assuming a similar room rate, Lastminute.com.au converts 90% less of its visitors than Wotif.com.
People are looking in large numbers, but they are not buying.
Why? That’s what Lastminute.com.au is now trying to find out.
Johnson said a recent change to the site’s hotel availability display has improved conversion over the past couple of months, while being able to source 228 day inventory through Travelocity has helped.
“We are seeing encouraging signs – it’s made a difference but there is no one silver bullet.”
He believes the fact Lastminute.com.au offer rooms, air and car will give it a competitive advantage over single offers sites as the local market matures.
“It’s quite clear the market here is18 months to two years behind the UK and US and those markets are now beginning to be dominated by one-stop shops.”
Only time will tell.