OTAs: Hooroo’s ‘huge spike’ but not yet in top 40

Issues & Trends – August 2012

OTAs: Hooroo’s ‘huge spike’ but not yet in top 40

QANTAS subsidiary Hooroo achieved a “huge spike” in hits to its website following its launch to the public last month (travelBulletin, July).

internet agency market shareBut despite the surge in site visits, Experian Hitwise reported that the new online hotel booking site still has a way to go to catch the leading online travel agencies (OTAs) such as Wotif which sits at the top of the market share table with a 12.42 per cent share of total visits for the week ending July 28. (See Internet Agency Market Share table, right)

Hooroo was ranked at 41, according to Experian Hitwise. “They do, however, seem to be on the rise,” the monitoring company reported.

Meanwhile Webjet, which holds the number two position narrowly behind Wotif, has released full year results that point to the growth potential of Australia’s online hotel booking market now valued at nearly $2 billion.

Webjet established its presence as on OTA on the back of airline bookings and they remain the backbone of its business. However this financial year it launched a determined attack on the hotel booking market, adopting a meta-search approach. Releasing results for the financial year ending June 30, 2012, Webjet managing director John Guscic said: “The year has seen the extension of our full hotel aggregation model which has now achieved an approximate annual run rate of $42 million in relation to the first half year run rate of $25 million (approximately), a 68 per cent increase in six months.”

The surge in hotel booking revenue contributed to a 30 per cent increase in the company’s total transaction value (TTV) that climbed to $768 million in the last financial year.

Webjet achieved a 25 per cent hike in net profit before tax to $19.3 million for an after tax profit of $13.6 million, a 24 per cent increase. Earnings per share are up 31 per cent. The company lifted its dividend to seven cents for the second half of the financial year (13 cents for the full year).

“Webjet has delivered another record profit, has exceeded market guidance, and in particular recorded a lift in net profit before tax for the second half January 2012 to June 2012 of approximately $7.7 million compared with $5.9 million for the half year to December 31, 2011, an increase of 31per cent,” said Guscic.

“We are particularly pleased with the acceleration of profit in a generally flat travel market and now, 17 consecutive half years of TTV growth.

“In the full year, our TTV growth of 30 per cent has, relative to airline market traffic data, substantially outstripped the general travel market,” he said.

• Webjet has entered into an inter-national franchise agreement for brand and booking engine and associated technology licences with BidTravel, said to be the largest travel conglomerate in South Africa.

The 10-year agreement provides BidTravel with franchising rights for sub Saharan Africa and the Indian Ocean Islands. A Webjet statement said BidTravel will pay an initial franchise fee and ongoing annual payments with a guaranteed minimum.

“BidTravel is the largest seller of travel arrangements in South Africa and operates on behalf of a number of well established travel brands. It is part of Bidvest Group Limited,” said Guscic.