Webjet hopeful amid gloomy outlook

Webjet hopeful amid gloomy outlook
By admin

Webjet will increase its marketing expenditure in an attempt to benefit from low growth levels in the leisure travel market, as it revealed its guidance for the full financial year.

The online retailer forecast net earnings would rise by at least 10% and that net profit would see growth of “a similar order” for the full year to June 30.

Managing director John Guscic referred to “very low” growth levels in the Australian leisure travel market over the last four months, in terms of unit price and transaction volume.

“Month by month data has shown declining domestic prices,” he said.

But Guscic claimed that Webjet saw the current trading environment as a “substantial opportunity” to strengthen its market footprint.

“We have accordingly increased our marketing expenditure in the current half year to take advantage of these conditions,” he said.

The online retailer has upped its marketing spend by $1 million, or 0.2% of total transaction value (TTV) for the half year.

In addition, the period has seen the introduction of next generation packages and yesterday’s release of a Windows 8 version of the Webjet site for both domestic flights and hotel bookings as the exclusive launch travel partner of Microsoft in Australia.

Implementation of its Lots of Hotels venture in the Middle East is also underway, with total expenditure of the development activity for the full year not expected to exceed $1.5 million and marketing operations to commence in January.

“As these development activities continue in a travel market where the macro level is not exhibiting strong significant growth, there has been a concentration on managing for margin in all areas of our activities,” Guscic said as he confirmed the full year guidance.

Webjet reported a 25% lift in profit for the 2011/12 financial year with a pre-tax profit of $19.3 million in the 12 months to June 30 with TTV climbing 30% to $768m.

Latest News