Webjet flies above the storm

The online travel company's aggressive expansion strategy has served it well in the face of a deteriorating tourism market worldwide – and looks set to continue to do so.

The hurdles facing Australia’s tourism sector have forced travel operators to adapt and innovate as a means of survival. In the battle for market share, online travel company Webjet has stepped up to the plate.

In recent years, the industry has had to contend with a deteriorating global economy that has badly affected the numbers visiting Australia and a soaring Australian dollar that has made international travel all the more inviting for Australians.

Webjet’s aggressive strategy has ensured it is constantly snipping on the heels of competitors Flight Centre and Wotif. The company’s financial year results showcase its success in a tough market. Webjet reported a $13.6 million profit for fiscal 2012. This represents a 24 per cent rise on the previous year, and was slightly above the earlier guidance given by Webjet in April.

In the face of a deteriorating market, Webjet looked at new ways of lifting market share, expanding into new markets, and ultimately increasing profit. The online travel company’s response was to launch a series of measures to keep itself ahead of the pack. A key reason for the success of the brand has been the continued development of traditional operations, while simultaneously expanding into new markets.

In 2011, Webjet expanded its hotel business by launching a platform featuring over 100,000 hotels. The online travel company formed a partnership with operators Orbitz, Expedia, GTA, Tourico and Hotelbeds. The travel company also partnered up with Tripadvisor, allowing for Tripadvisor reviews to be directly accessed from Webjet’s site.

And in the past two years, Webjet has launched aggressive expansion plans in the US, South Africa and Asia. Plans for expansion into Europe have (unsurprisingly) been put on hold.

As another means of increasing market share, Webjet announced earlier this year that it had joined forces with Coles on the relaunch of flybuys, by allowing customers to use flybuy points to pay for part of their purchase on Webjet’s website.

Webjet’s diverse strategy has ensured continued annual growth for the company in a tough travel market. But as consumers become more cautious, the sector is likely to face increased pressure for the foreseeable future.

The issues facing the industry are not going anywhere. The global economy is a mess, and doesn’t look to be getting better any time soon. And the Australian dollar continues to rise above parity, resulting in more Australians looking to travel overseas, to the detriment of the domestic market.

But Webjet’s solid expansion into hotels and international markets, combined with its continued investment in its online presence, has paid off for the company in the short term. More importantly, Webjet looks to be making all the right moves to best ensure its ability to weather out the continuing depressed market conditions.

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