Good news is rare in the travel industry at the moment, so it is pleasing that a major player is bucking the trend. This week, popular accommodation reseller Wotif.com Holdings Limited announced a record end of year financial result. Although the travel industry is in recessionary mode, there are a few businesses that are taking advantage of the subtle changes in the market.
It would appear that the economic downturn has been good for Wotif!
Wotif have been extremely successful establishing themselves as a one-stop accommodation brand for consumers that are seeking "last-minute accommodation specials or great deals in advance". The rise of Wotif achieving a high brand recognition and business success with minimal investment in the mainstream media has been remarkable.
What are some of the current market trends that may have assisted Wotif?
Those consumers that have taken advantage of deep discounting occurring in the airline industry would have also been seeking comparable value in accommodation. Wotif with its increasing brand awareness is well poised to take advantage of this.
It is evident that baby boomers are cutting back the most in travel, however there is growth in the 18-34 market that is spending more on travel and would be more inclined to book on-line than any other demographic.
The buzzword in the travel industry at the moment is “staycation.” The concept of the public traveling shorter distances and staying for shorter lengths of time appears to be a growing trend. Online accommodation sites such as Wotif are being used for inspiration.
The nature of commoditising accommodation into an easy intuitive purchase has attracted consumers to the web. Wotif appeals to leisure consumers that are looking for value and are making increasingly last minute spontaneous travel arrangements.
There appears to be anecdotal evidence that business travellers are seeking accommodation online as they look to control their overall travel spend and compare value. Managing director and CEO, Robbie Cooke claims that Wotif has taken advantage of this trend and has experienced an increase in reservations from the corporate space.
26 August 2009
NZ Press Release: Wotif.com
Wotif.com Holdings Limited today announced a 26% surge in after tax profits, delivering a record $43.5 million result. This performance was fuelled by a 29% increase in room nights sold, as consumers migrated to the Wotif Group's online channels seeking the value, convenience and simplicity offered online.
The Wotif Group achieved record sales in the year for its New Zealand accommodation partners, delivering a 22% increase in room nights sold.
FY2009 Highlights
Net Profit After Tax up 26% to $43.5 million
6.33 million room nights sold, up from 4.91 million last year
523,000 room nights sold for New Zealand accommodation partners (up 22% on last year)
More than 1,550 New Zealand accommodation suppliers partnering directly with the Wotif Group
Launch of 3 month booking window (previously 28 days) on Wotif.com
Wotif.com brand recognition in Australia at 50% and New Zealand awareness jumped to 30% (up from 25% last year)
14,500+ hotels and accommodation venues working directly with the Group in 49 countries
Flights booking platform enhanced for FY2010 re-launch
Successful integration and positive full-year contribution from travel.com.au Limited and Asia
Web Direct (HK) Limited acquisitions
11 cent final dividend (fully franked), taking full year payment to 17.5 cents (up from 15 cents last year)
