Hotels

Webjet’s hotel business drives huge half-year profit growth

Huntley Mitchell

Huntley Mitchell

Online travel company Webjet has recorded massive increase in profit and revenue for the first half of the 2019 financial year, thanks in large part to its hotel business.

The company’s underlying net profit was $31 million for the six months to 31 December 2018 – up a staggering 59 per cent on the prior corresponding period.

Webjet’s revenue soared 28 per cent to $168.4 million, and its total transaction value (TTV) jumped 24 per cent to just under $1.8 billion.

Earnings before interest, taxes, depreciation and amortisation rose 37 per cent to $56 million in the first half of FY19.

Webjet’s B2B hotel business, WebBeds, saw its half-yearly revenue increase a whopping 72 per cent to $85.1 million, while its TTV grew 65 per cent to over $1 billion, and its bookings rose 50 per cent to more than 1.5 million.

The company’s online travel agency division lifted its half-yearly revenue by 12 per cent to $74.1 million, while its TTV was up seven per cent to $684 million, and its bookings rose 4 per cent to 785,000.

Online Republic, Webjet’s motorhome rental provider, saw half-yearly revenue grow eight per cent to $16.2 million. However, its TTV fell five per cent to $147 million, and its bookings dropped one per cent to 241,000.

Webjet managing director John Guscic said the half-yearly figures were “another outstanding result” for the business.

“Our WebBeds business continues to consolidate its position as the number two global B2B player and is now delivering significant EBITDA growth,” he said.

“Following the acquisitions of JacTravel and more recently Destinations of the World, our increased global size and scale means we have been able to shift our focus from growing market share to pursuing more profitable growth.

“The Webjet OTA continues to gain share despite a slowing domestic flights market, and our strategy to focus on profitable bookings in Online Republic saw improved TTV and EBITDA margins.”

Guscic said the company continues to believe in considerable global growth opportunities for WebBeds, particularly in the Asia-Pacific region.

“Even though we are not yet at scale in all markets, we are already close to our ‘8/5/3’ target,” he said. What Guscic means by that is eight per cent revenue/TTV margin and five per cent costs/TTV to drive three per cent EBITDA/TTV.

“We are an industry leader in the development of blockchain technology, and as we continue to extend our global reach and leverage RezChain to further tighten costs, we believe WebBeds will be able to deliver an ‘8/4/4’ target by FY22.”

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