By Martin Kelly, Editor, Travel Trends
AUSTRALIA’S online travel sector continues powering ahead in stark contrast to the problems experienced by traditional retailers such as Flight Centre, Jetset and Harvey World Travel.
Mounting evidence suggests the recessionary conditions may favour online players with consumers increasingly heading online to take advantage of domestic accommodation and airline discounts.
Both Wotif and Webjet are performing at record levels, while another major website told Travel Trends that January was a “cracker” with almost 2m site visits.
More will be revealed on Wednesday when Wotif CEO Robbie Cooke, who is being interviewed at the No Vacancy conference in Sydney on March 19, announces the detail behind his company’s expected A$20m after-tax profit for the six months to Dec 31, 20% more than the previous corresponding period.
The results for Wotif, owner of several major online brands, follows an outstanding performance from airline booker Webjet, which recorded a 29% increase in net profit to $A3.7m on the back of strong booking growth for the same period.
Webjet’s Total Transaction Value for the six months to December 31 was up 15% to A$182m while the number of transactions increased 19%.
CEO David Clarke said the disparity was due to the price of airfares falling aligned with the reduction by airlines of fuel surcharges, a trend which has continued into 2009 (Jetstar this week announced it was dropping all fuel surcharges).
The airfare falls have no impact on Webjet’s profitability because its business model is based on charging a range of fees for each transaction. There is no evidence yet of consumers pushing back on this extra cost.
Clarke baulked at making projections, citing economic volatility.
Meanwhile, Jetset Tavelworld announced a $23m pre-tax profit for the half-year – its first result since merging with Qantas Holidays on July 1 last year.
Although there is no direct comparison it appears the result is down around 30% when all elements (Jetset Travelworld, Qantas Holidays and Qantas Business Travel) are taken into account.
Australia’s largest travel retailer, Flight Centre, is doing it tough, recently revealing slower sales, plus a couple of write-downs on various investments, including in the Liberty retail chain in the US.
Travel Trends: February 13, 2009