Online booking agency sees future in bedbank market
John Guscic has pitted himself against the gorillas of the global travel industry. Think Expedia, TripAdvisor and Booking.com.
John Guscic has pitted himself against the gorillas of the global travel industry. Think Expedia, TripAdvisor and Booking.com.
He says the key to Webjet’s success in recent years has been picking a niche in the $50 billion international “bedbank” market.
“We are always cognisant of what the competition are up to. Obsessed about looking at their results and where they choose to invest. And where we can, we try to avoid a direct confrontation with them,” he says. “Outside of Australia the key to success has been picking a niche where there is enough runway for us to be successful for a 10-15-year time horizon. And not get swamped by somebody else.”
Guscic believes there will be plenty of growth in the WebBeds business in 10 years time, as his legacy Webjet online travel agent (OTA) and New Zealand-based online car, motorhome and cruise operation known as Online Republic continue to mature. Those businesses are not immune from macroeconomic factors, even as they win market share, and weak consumer spending meant their profits were lower in the first half.
Cruise bookings have been falling due to lower supply, with major operators Princess Cruises, Royal Caribbean and P&O reducing capacity.
The leisure travel market in Australia remains volatile, also highlighted in the weaker-than-expected half-year results of rival travel booking company Flight Centre, which relies more on a brick-and-mortar model.
Yet even at its February half-year results, Webjet’s OTA business reported that flight bookings grew 4.1 per cent.
“Our growth has been at least three times the market and we have continued to become a significant player in the OTA market where we now account for 15 per cent of all flight transactions,” Guscic says.
Webjet’s backers believe that despite the domestic headwinds, a combination of strategic acquisitions and high margins mean it can grow profits.
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