Wotif still waiting for travel surge
The online travel company said it would not provide specific earnings guidance for the new financial year until February, when it releases its half-year results.
Wotif chief executive Scott Blume told shareholders in Brisbane that the overall trading environment here remained soft, and any uplift in consumer confidence following the federal election was yet to translate into higher sales.
Mr Blume, who began as CEO in January, warned that its Asian business continued to be a drag on the company, and any turnaround in its performance was unlikely to occur until the second half of this financial year.
But he said Wotif's flights business was exceeding expectations, and its total transaction value - the price at which goods and services are sold - was set to increase by more than 30 per cent in the first half if trends continued.
The online flights business is in its infancy for Wotif, which remains heavily reliant on accommodation bookings. Almost one in 10 room nights in Australia is booked on Wotif's sites.
Mr Blume's comments echo those from Qantas on Friday when the airline warned that a pick-up in business confidence had failed to translate into added bookings for flights.
Shares in Wotif, whose sites include lastminute.com.au and latestays.com, closed down 3¢ at $4.64 following the update to shareholders. In contrast, Webjet rose almost 5 per cent to $3.64 on Monday while Flight Centre struck a record high of $51.87. The latter's share price has more than doubled over the past year.
Wotif chairman Dick McIlwain also told shareholders that the end of an era of double-digit growth in accommodation bookings marked a turning point for the company, which could "no longer see itself as a single-purpose accommodation booking transaction service".
He emphasised that the earnings last financial year, when it posted a 12 per cent fall in net profit, showed that its core accommodation and Asian business had not produced the growth evident in its early years.
About 10 per cent of shareholder votes were also against its executive-pay report on Monday.
Frequently Asked Questions about this Article…
Wotif has noted that despite a lift in consumer confidence, trading conditions in Australia and New Zealand remain soft. This means that the expected increase in accommodation bookings has not yet materialized.
Wotif plans to provide specific earnings guidance for the new financial year in February, coinciding with the release of its half-year results.
Wotif's Asian business is currently a drag on the company's performance, and any turnaround is not expected until the second half of the financial year.
Yes, Wotif's flights business is exceeding expectations, and the total transaction value is set to increase by more than 30% in the first half if current trends continue.
Wotif remains heavily reliant on accommodation bookings, with almost one in 10 room nights in Australia booked through its sites.
Following the update to shareholders, Wotif's shares closed down 3 cents at $4.64.
Wotif's chairman, Dick McIlwain, mentioned that the end of an era of double-digit growth in accommodation bookings marks a turning point for the company, indicating a need to diversify beyond being a single-purpose accommodation booking service.
About 10% of shareholder votes were against Wotif's executive-pay report, indicating some level of dissatisfaction among shareholders.
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