Webjet shares strategy for sale of global hotels

Published: 24 Oct 2007

According to the company, the strategy is significantly different from existing hotel only Internet operators who are reliant on post-flight purchase transactions with sometimes costly and difficult to scale processes.

The model "will incorporate the key success components of our current market leading flight aggregator and capitalise on the extremely strong Webjet brand and market footprint," stated the company. "Webjet's current customer database is approximately 800,000 active customers who purchase their flights before they purchase hotels. As a result Webjet has specific and particular knowledge of those customers' buying intentions, unlike its competitors in the hotel space, where the purchase of the hotel is a disparate and second level event in time."

The key components of the new strategy are:

-A fully electronic XML multiple global supplier channel feed with secure year round inventory.
-The elimination of manufacturing cost and the aggregation of a series of global manufacturing entities including GTA, which is the world's largest virtual hotel that has on offer over 70,000 room nights every night of the year and has an inventory supply of over 25 million room nights on a global basis. The supply will be supplemented by specialist market suppliers including Webjet's existing arrangements with HotelClub and RatesToGo and other destination specialists currently under negotiation.
-The ability to strongly and aggressively market at a local level with local product combined offer flexibility.
-The incorporation of sophisticated algorithms in the Webjet travel service aggregator to provide relevant and precise consumer offers following the completion of flight bookings.
-The incorporation of WEB2 push technology within Webjet's PLANITONEARTH and the increasing use of web gadgets and RSS feeds to provide tailored and relevant offers to customers who are transacting with Webjet.

John Guscic , Chief Commercial Officer, GTA and a director of Webjet Ltd, said, "Through my unique 'cross border' and international association with Webjet, we are bringing together global massive scale supply of over 25 million available room nights, covering in excess of 23,000 suppliers across the world, along with GTA's international manufacturing infrastructure and supply reach and combining that with Webjet's deep and strong local Australian market footprint. It welds global supply together with local sophisticated marketing and technology."

Webjet's Managing Director, David Clarke said, "The true significance is that we will have a fully scaleable supply model without supply cost or merchant risk and the ability to tailor global product to specific local requirements. It is year round secure inventory, not just limited to last minute offers and not just limited to circumstances where hotels have space left over. It is pre-emptive in terms of its supply channel arrangements."

"Our TSA will integrate the hotel offers automatically and accurately and precisely mesh the offers with flight itineraries, cities and locations with intelligent choice, resulting in literally, a one-click operation – no date to select, not city to select, no credit card to duplicate, no passenger details to re-input. All completed automatically within our TSA and stored in PLANITONEARTH."

Webjet's Chief Executive Officer, Richard Noon, said, "The launch of the new model is a product of many months of planning which was taking place in parallel with our current bid for Lastminute.com.au. It will launch in the first quarter of 2008 and market guidance in terms of the likely impact on future years' growth and profitability, will be provided at the full financial year point, 30 June 2008. The software project has been developed with our Microsoft Gold Partner, Readify Pty Ltd and is being progressively integrated into our TSA."

Webjet considers the project to be:

· Low risk with a gross profit margin equal or superior to current market operators

· A logical extension of our sophisticated flight technology

· A highly scaleable global model with secure worldwide supply channels that does not rely on left over hotel space.

· Uniquely integrated with PLANITONEARTH with automatic Google mapping."

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