Webjet echoes sentiments- domestic is dead

Webjet echoes sentiments- domestic is dead
By admin

Webjet expects Australia’s domestic leisure travel, its core market, to remain flat for the remainder of FY15, in line with a number of other travel companies suggesting the same outcome.

The OTA told investors today that despite a flat domestic leisure market, YTD bookings show a 10% increase year on year and record TTV each month since the start of FY15.

The OTA said its goal was to outperform the market to become the number one brand and offer “customers greatest convince and choice”.

The company, which has brands Zuji travel in Australia, Hong Kong and Singapore, has forecasted pre-tax earnings of $27 million for FY15, up from its initial expectation of $23 million after expensing $1 million costs from its acquisition of SunHotels in Europe.

Booking fees as revenue from air also continue to drop with 29% reported for FY14, down from 59% three years ago.

Webjet said metasearch for its air business has not yet been a “key threat” as the structure of the Australian market limits the impact as seen overseas coupled with the 0% commission for domestic airfares.

According to the OTA, from its non-air businesses, hotels are no longer a “key growth focus” due to “intense market competition” but continued to perform well nonetheless.  Dynamic packaging and Webjet Exclusives have shown “good growth” since its launch in FY14, while car hire and insurance are both sectors growing “significantly faster” than its core air business.

The company said its Zuji operations which it acquired in 2012 is expected to breakeven for FY15, largely due to a “difficult trading environment” for the brand’s Hong Kong arm citing the ‘umbrella movement’ as one of the impacting causes.

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