Dida deal opens China door for Webjet

Aggressive online travel agency Webjet more than doubled its market capitalisation last year to about $860 million.

Webjet managing director John Guscic. Picture: Tim Carrafa

Aggressive online travel agency Webjet more than doubled its market capitalisation last year to about $860 million, despite more of its offshore customers booking lower-quality hotels.

Webjet, which has established footholds in Europe and the Middle East, is keen to expand into the US and Asia, striking a deal overnight with China’s largest travel aggregator, Dida Travel Technology.

The partnership with the Shenzen-based Dida gives Webjet’s new B2B travel business Fit Ruums an instant foothold in China, with the two companies supplying and distributing each other’s travel content, including 13,000 hotel properties.

“Among the biggest beneficiaries of this partnership will be national and regional tourism organisations, which will be able to work with Fit Ruums and Dida to tap into the high-value Chinese outbound market,” Webjet told the ASX.

Webjet managing director John Guscic said the deal did not involve cash and was a tie-up of tech business intelligence and supply and distribution of hotels between the two companies.

Mr Guscic said more Middle Eastern travellers were choosing three and four-star hotels over luxury properties because of the collapse of the oil price. But he said in good news for Webjet, cheaper hotels delivered Webjet higher margins.

“Our mix has changed dramatically in the Middle East because of the collapse in oil price ... there is a lower level of confidence in Middle Eastern countries at the moment.”

Meanwhile, at yesterday’s annual meeting Webjet chairman David Clarke said the company had outperformed all relevant ASX indices and could entertain a dual listing. “We have entered into the ASX top 200 (and this) gives great credibility to the company and your investment,” said Mr Clarke. “We may entertain a dual listing, but have no current plan.”

Mr Clarke said Webjet faced many risks from technology to a huge number of very detailed day-to-day trading and governance matters.

“(But) I don’t see any material impact on us from Brexit, our UK business is small and we have no material exposure to the US. It’s too early to judge but we don’t see any imminent risk.”