Is Webjet’s threat to agents intensifying?

Webjet is the latest company in the travel industry to reveal its half-yearly results

Looking at the results, the one thing that becomes gleamingly obvious is the growing threat of the OTA to traditional brick and mortar agencies.

Webjet has revealed steady growth over the past six months, with total revenue sitting at $359.8 million, up 290 per cent from the same time last year.

According to the release, the OTA’s total transactional value stood at $1.44 billion, up 55 per cent.

As well as this huge growth, Webjet flight bookings are also continuing to “outperform” the market by more than four times.

Bookings for flights have grown by 11 per cent compared to the previous period.

The release added that packages booking had grown by 86.4 per cent.

Speaking about the results, Webjet MD John Guscic said: “The Webjet OTA continues to outperform the market and ongoing investment in our tech platform is driving improved visitations and conversions.”

“We are also seeing the impact of significant growth in various higher margin ancillary products leading to TTV margin improvements.”

While this growth might have left your head spinning, it’s interesting to note where the OTA has lacked growth.

In particular, the OTA has revealed that cruise has underperformed due to what it calls “a difficult market environment”.

As well as this, Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) was also impacted by the introduction of “Netflix tax” and “adverse currency movements during the period”.

Looking to the future, the OTA has said overall the business is positive about future growth.

“January 2018 bookings are up in all businesses and we expect trading for 2H18 to be stronger than 1H18.”

“We remain on track to deliver full-year EBITDA of more than $80m inclusive of $1m costs in relation to the JacTravel acquisition.”

So what does this mean for agents?

Well, fear not.

Given that most of the industry’s biggest players have come out swinging this week in the slew of half-yearly results, it seems that Webjet’s increases in profits are reflective of an industry-wide growth.

What is interesting now is the cruise industry and their relationship with trade and OTAs.

Do you have something to say on this? Get in touch with Travel Weekly Editor Daisy Doctor here to share your thoughts.

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Email the Travel Weekly team at traveldesk@travelweekly.com.au

Latest comments

Maxwell Smart says:
February 23, 2018 at 2:46 pm
webjet still lies about having all options on their website. Last time I looked there were no Southwest flights in USA. Southwest are the biggest U.S. domestic airline in terms of fleet & probably the best U.S. airline. Think they have 800 or so 737’s, but you won’t find them on webjet
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