Australia-based online travel company Wotif Group has reported a profit (after tax) of $20.36 million for the six month period ended December 2013.
This profit number is a decrease of 18% compared to the same period for 2012 - the reason is primarily due to increased investment cost in marketing and IT related activities.
Wotif announced in December 2013 that it is was expecting profit after tax to be in the range of $20 million.
Revenue for the period July 1 - December 31, 2013 was reported at $68.34 million, an increase of 3.5% compared to the same period in 2012.
When it comes to flight sales, the company reported a 27% increase (about 110K bookings) in the number of flights booked across the Group.
The Group sold 3.2 million room nights across all of its brands during the period, and the average sale value of hotels booked ($143.86) on Wotif.com increased by 3% when compared to the same period in 2012.
Wotif Group’s online travel brands in Asia Pacific region include Wotif.com, lastminute.com.au, travel.com.au, Asia Web Direct, LateStays.com, GoDo.com.au and Arnold Travel Technology.
Investment in technology
In an effort to improve customer proposition, and open new distribution channels, Wotif continues to invest in IT related projects.
Incremental investment in technology costs totals $1.35 million when compared to the prior corresponding period. This is in addition to an increase in IT amortisation of $1.8 million, compared to the same half last year.
Wotif Group’s managing director and CEO, Scott Blume, says:
"Work continues on the update of our information technology systems as outlined in the Company’s Strategic Plan. This work is progressing on budget and on schedule and is likely to be substantially completed by the end of FY14."
The Group is working on various technology related initiatives including - Enhancements to support access to new channels, margin enhancing features (new ranking algorithm), data capture and analysis enhancements, and improvement in mobile offerings.
Increase in marketing spend
To increase hotel sales in Asia, the Group launched its marketing initiative in December 2013 and it has improved the hotel content with addition of 1,100 new directly contracted hotels.
The Group's investment in marketing increased by $4.06 million over the previous corresponding period. This increase is attributed to -
- Marketing costs related to the launch of Dynamic Packaging in October 2013, this feature has been growing month on month.
- A ramp-up of SEM and metasearch spend. SEO efforts will continue in the second half of FY14.
- Investment in online marketing for flight business.
- Spend on Wotif Group-branded key words due to a policy change by Google. Approximately 50% of Wotif.com traffic comes direct to website due to strong brand recognition and importance of brand in mobile channels.
Mobile growth
As on December 31, 2013, Wotif.com's mobile apps across all platforms have been installed on over 735,000 mobile devices with over 4.6 million downloads.
During the reported period, Wotif.com mobile app update include - Map search, shortlist hotels, enhanced images, and social media sharing feature.
Mobile bookings for Wotif.com stands at 360,000 for the reported period, an increase of 36% over the previous corresponding period.
Also, the mobile channel attracted over 20 million visits for the reported period, an increase of 70% over the previous corresponding period.
Website traffic and content
The Group has a overall customer base of 3.5 million and the Group's websites collectively gets over 12.1 million visits per month.
Traffic to the Group's websites continues to grow and is up 11% over the previous corresponding period.
The Group claims that its Australian brands – Wotif.com, lastminute.com.au and travel.com.au – collectively tops the online traffic share versus all competitors.
User generated reviews on the Group sites crossed one million.
Hotel initiatives in the second half of FY 2014
The Group is working on various enhancements to its hotel section in Wotif.com, including:
- New Wotif.com home page and enhanced search functionality
- New ranking algorithm for hotels to be implemented to recognise popular hotels with top traveller review scores
- Beta test for hotels requesting increased marketing and ranking access
- Potential for additional distribution partners/channels partners to be implemented
- Membership program to be introduced to reward loyal customers
NB: Full earnings report can be accessed -
here.