Wotif shares plunge after profit forecast downgrade, blames volatile marketNews / OnlineBy Karthick Prabu | December 18, 2013Share This article was originally published on Wotifreported net profit after tax for the first half of fiscal year 2014 is expected to be in the range of $20 million, compared to $24.48 million in the prior half-year.Shares at the company fell by almost 32% at the close of trading in Australia today.For the first half of fiscal year 2014, the group's total transaction value is expected to be flat with a decline in ANZ hotel accommodation of around 5%.However, this is expected to be offset by strong growth in flights and gains from its recent launch of dynamic packaging functionality in wotif.com.Revenue is expected to be up by around 4.5% with increases in ANZ accommodation arising from commission increases, in addition to gains from growth in flights and packaging revenue.Wotif says the outlook for second half of fiscal year 2014 remains volatile with retail conditions in its key ANZ retail market continues to be soft. It also says: "Given this volatility, it is not possible to provide guidance for the full fiscal year 2014 at this time."Share this quote Cost increaseFor the first half of fiscal year 2014, operating costs are expected to be up by $8.01 million. This is primarily driven by an increase in marketing estimated to be around $3.56 million YoY, and salaries and wages estimated to be up $3.38 million YoY.The marketing expense is attributed to the extremely competitive online advertising marketplace where overall costs have increased. The increased spend and total spend have delivered positive ROI across all lines of business, albeit the ROI has decreased YoY.In relation to the salaries and wages increase, approximately 40% of it relates to IT headcount for systems development.Managing director and Group CEO of Wotif Group, Scott Blume says: "The increase in our marketing and information technology costs in the first half is to support the strategic initiatives, invest in new market segments and respond to rapidly changing market conditions."Share this quote Business updatesThe group has finalized the Asia marketing plan that would commence this month.It's flights business is growing strongly, and it is increasing the hotel commission to 12% effective January 2014.Technology strategy work is progressing as per plan. In the 2012 annual report, the Group said: "In the coming year we have a number of significant infrastructure related projects scheduled to commence development. Some will consolidate or refresh back-end systems to achieve operating efficiencies, facilitate new features for existing product offerings, and replace technology in some legacy systems."Share this quote In October 2013, Wotif.com was the second most visited travel website in Australia with 12.33% visits.For the year 2012, Wotif Group reported a profit of $76.57 million on about $129.11 million of revenue.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.