Wotif books record result for FY09

By: Graham Gardiner

Despite the significant economic headwinds experienced in the year, the Wotif Group delivered a record $43.5 million net profit after

Despite the significant economic headwinds experienced in the year, the Wotif Group delivered a record $43.5 million net profit after tax for the 12 months to June 30, 2009.

This 26 percent profit increase saw the group process transactions valued at $993 million for its accommodation and flight partners.

A total of 6.33 million room nights were sold by the group (up from 4.91 million last year) for the 14,500 plus accommodation suppliers with whom Wotif works in direct partnership.

The year saw strong migration to the Wotif Group's websites as customers took advantage of the value, convenience and simplicity offered for booking travel online.

In recognition of the group's strong performance, the company declared a final fully franked dividend of 11 cents, taking the full year payout to 17.5 cents (up from 15 cents last year).

Wotif Group’s Managing Director and CEO, Robbie Cooke, says the company faced some "significant headwinds on entering the financial year".

"Consumer sentiment was deteriorating daily and we were as a community being conditioned for an economic meltdown. The challenges posed by this backdrop were new for the Wotif Group as our business model had not in its nine years of operation been tested by a recessionary environment.

"We believed our model would continue to resonate with consumers in a down cycle. We expected that consumers would, more than ever, be focused on value and as a result would be drawn to the compelling value available online.

"Our thinking was that consumers would take shorter breaks, travel more domestically, transact in the last-minute space, and would move to the online environment to secure best value for their accommodation and other travel needs.

"These theories seemed sound, but we were definitely in unchartered waters.

"Our performance in the year demonstrates that the Wotif Group business model has come through with flying colours. This has been the most successful year ever for the group, with record transaction levels, revenues and profits," he says.

Cooke says one of the "slightly perverse outcomes" is that Wotif experienced an increase in corporate travellers bookings.

"This outcome is counter-intuitive given the definite reduction in corporate travel in the wider travel market.

"We have benefited in this corporate space as business travellers, just like the wider community, are looking to control their overall travel spend and are seeking best value.

"We are hopeful that those first-time corporate bookers will stick with us as markets rebound," he says.

Cooke says newly-acquired businesses contributed for a full year for the first time.

Asia Web Direct assisted in driving the group's Asian room night volumes by 100 percent, recording a record $128 million (excluding taxes) in transaction value for sales of Asian hotels.

Travel.com.au performed very strongly with the team beating internal cost saving target with more than $2 million of ongoing annualised savings realised following integration with the Wotif group.

The lastminute.com.au business achieved a 170 percent increase in the total value of flights and accommodation sold in the year.

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