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Webjet gains on Wotif here and moves to outflank it in the Asian marketplace


Issues & Trends – December 2012 / January 2013

Webjet gains on Wotif here and moves to outflank it in the Asian marketplace

WEBJET has overhauled Wotif in the Australian Online Travel Agency (OTA) market and is setting out to trump its rival in the Asian market where Wotif appears to be struggling.

Latest site visit figures from Experian Hitwise show Webjet with a sliver more market share (12.16 per cent to 12.15 per cent) in the week ending November 10 and on level pegging for the week ending December 1 with both companies on 11.76 per cent.

In preceding months, the figures, published monthly in travelBulletin’s Business Monitor (page 3), showed Wotif between one and two percentage points clear of Webjet.

In another development, Expedia appears to have fallen further behind its Australian-owned rivals, with the gap almost doubling in November and December.

In those two months the giant US OTA’s share slipped to below nine per cent, 2-3 percentage points behind the market leaders. Until then, its share had been trending in the high nine per cents little more than a percentage point behind Webjet.

In fact, Expedia should probably be considered as fourth not third in Australian OTA market share.
While it has a lead of about half a percentage point over Flight Centre, the picture changes significantly if the share of Flight Centre subsidiary, Escape Travel, is also taken into account.

For example, in the week ending December 1, the combined share of Flight Centre (8.12 per cent) and Escape Travel (1.25 per cent) came to 9.37 per cent, narrowly but decisively ahead of the 8.73 per cent achieved by Expedia.

Of course it must also be said that the share attributed to Wotif does not include the shares of its fully owned subsidiaries, Lastminute and Travel.com.au.

When these are added to Wotif’s 11.76 per cent for the week ending December 1, the company’s total market share amounts to a dominant 18.41 per cent.

However Webjet’s acquisition of Asian-headquartered Zuji, announced earlier this month, will provide a boost to its Australian situation and position it to make big gains in Asia where Wotif appears to be struggling.

Wotif’s annual report for the 2011/12 financial year shows the company’s Asian revenue falling for the third year in a row – from $15.5 million in 2008/09 to $11.8 million last financial year. There has also been a drop in total room nights sold.

Wotif was looking to Asia to become a growth powerhouse in the wake of its $34 million acquisition of Asia Web Direct in early 2008.

Now Webjet plans to use Zuji’s established market dominance in Singapore and Hong Kong as a launch-ing pad for further gains elsewhere in Asia.

“Zuji is the OTA market leader in Singapore and Hong Kong with 45 per cent and 36 per cent of the online air ticket markets respectively,” the company has told investors.

“It attracts traffic in adjacent markets (eg. Malaysia, Thailand, Indonesia) even in the absence of active operations in these countries.

“Expansion into other Asian markets represents significant upside potential.”

Announcing the $US25 million purchase of Zuji from Sabre Holdings subsidiary, Travelocity, Webjet managing director John Guscic depicted it as “a unique opportunity to substantially expand Webjet’s marketing footprint particularly in the major future growth markets of Asia.”

In the wake of the Webjet-Zuji move, Expedia Australia and New Zealand managing director Georg Ruebensal welcomed “the added competition in a market that is ripe for continued expansion”.

“Expedia plans to continue building on the success of the joint venture with Asian travel operator, AirAsia, which they established back in March 2011,” he said, adding that his company now showcases 13 localised websites and will continue to grow this number aggressively.

 

 

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