Wotif.com defies downturn, reports improved profit

TeCommerce business models may prove to be more resilient than many others in a global recession if the latest results from Brisbane based Wotif.com are anything to go by.

ASX listed Wotif reported increased sales, improved margins and half year profit up 21% in its latest results released yesterday 18th Feb 2009.

Even more surprising the online accommodation booking company reported room night sales continuing to grow into 2009.

Wotif.com told the ASX that room night sales were up 33% on the previous years figure for the period from 1 January to 16 February 2009.

Of course, Wotif's latest figures reflect the benefit of acquisitions, including Travel.com.au and Asia Web Direct over the last twelve months. Because of that their raw sales would be expected to be up significantly on the previous year.

But even the Wotif.com site was showing increased room night sales volumes, up 12% during 2009 to date.

So clearly, the almost wholly online business model the company uses to sell accommodation is continuing to prove attractive in the marketplace.

Group managing director and CEO, Robbie Cooke said that the company’s continuing extensions to the booking window it offers to customer is undoubtedly helping.

Customers can now book accommodation up to three months in advance. Previously the booking window was just 28 days. And, of course, when wotif.com started out the booking window was only a week.

Whereas the company started out in life as essentially a last-minute or standby seller of excess accommodation inventory, Wotif.com is increasingly a mainstream seller of accommodation.

Its discount rates are also, in the current economic climate, attracting more customers.

“The Wotif.com business model continues to demonstrate its resilience in these tougher economic times” said Cooke, adding that “customers are very focussed on deals and are coming online to find them.”

Remarkably, Wotif’s booking data suggests that, although the company is benefiting from Australian doing their leisure travel at home rather than overseas, room booking patterns have remained largely the same, even as the numbers have grown.

From an investor standpoint, nevertheless, the successful integration of its recent corporate acquisitions have broadened its revenue sources, and given Wotif a more diversified product and service range.

With travel.com.au the company gained a foothold in the market for airline ticketing and rental cars, and also with travel packages and tours. Its Asiawebdirect acquisition also broadened its customer and supplier base to include Asians and Asian operators. Indeed the company claims it is now a “truly international company, employing over 400 staff in 13 countries on five continents.”

For more information go to
www.wotif.com
www.asiawebdirect.com
www.travel.com.au
www.lastminute.com.au