New owner Expedia has confirmed at its annual partner conference in Las Vegas that it will shift Wotif.com onto its tech platform as soon as possible and is committed to preserving the core brand.
It will also maintain Wotif commissions at the present level for the time being and invest more heavily in marketing.
Cyril Ranque, Expedia’s Senior Vice President of Global Market Management, stressed that it is very early days with company execs still coming to terms with the Wotif business.
The AUD700m transaction was completed just under one month ago on Nov 14.
Previously Expedia had just seen the financials – now they have been getting under the hood of the business.
“We’re in the evaluation process right now,” Mr Ranque said.
“How do we make the businesses work better together?”
He said technology, where Wotif has been a laggard, is key.
“Wotif has had some challenges recently and we think by moving to the Expedia platform Wotif will get what is missing.”
Which is the benefit of relentless tech investment.
Expedia invested more than USD650m in technology in 2014.
Wotif spent just AUD7.2m on IT in the year ended June 30, a stark contrast.
“Our goal is to move Wotif onto the Expedia platform as soon as possible,” he said.
The tech integration also equals product integration.
When complete, all Expedia product and inventory will be available on the Wotif site and vice versa.
He said the front end UX will also be likely be redesigned.
“What does it look like, how do we retain brand image, how do we make it familiar to consumers?” Mr Ranque asked.
“That is to be determined.”
As is a new commission structure for Wotif.
Mr Ranque says Wotif’s commission will not change in the short-term.
“My position is very clear – we’re not here to make massive changes, we’re taking things step by step.
“It’s really important to build a sustainable business in Australia.”
He said talks will be held with hotel partners “to find the best way forward commercially”.
In addition to technology, Expedia will also ramp up marketing, an area where Wotif has also under-invested.
“It looks like an opportunity,” Mr Ranque said
“There’s no value in burning marketing money but we think we have credibility and our marketing teams will work with Wotif’s to come up with the best solution.”
And one suspects a vastly increased budget.
Expedia now spends almost 50% of revenue on sales and marketing – USD2.6bn on all its brands in 2014.
Wotif on the other hand spent AUD30m on 13/14, or 20% of revenue.
Plenty of scope for growth – in a nutshell why Expedia bought Wotif Group, which also owns other significant brands such as lastminute.com.au, travel.com.au and Asia Web Direct.
What happens to them?
“We’ll see,” said Mr Ranque, who once again emphasised that it is still very early days in what will be long journey.