Scott Blume

In its latest “Market Update and Completion of Strategic Reviews”, CEO Scott Blume, who took up the reins earlier this year, disclosed that total transaction value for the group is “expected to be relatively flat with increases in Australian/New Zealand accommodation offset by continuing shortfalls in Asia and Rest of World (ROW), trends which have continued from the first half results”.

Asia and ROW are collectively estimated to be down by A$2.3 million year on year. Interest and other income are also down by $0.9 million.

Total group expenses are on the rise and estimated to grow by $5 million, with incremental investment in marketing and information technology accounting for around 40% of this increase.

The value of the Asia Web Direct domain name has been written down. “Due to algorithmic changes on Google, the traffic from those lower-ranked domains has declined dramatically and these links to the Group’s booking sites now  also have a negative impact on overall Search Engine Optimisation rankings,” said the report.

“As a result, the value of these domains has been written down to zero. Traffic from other “key” domains included in the AWD  purchase continues to increase YOY and these increases also provide an opportunity to monetise traffic in the future.”

Said Blume, “Our core Australian/New Zealand accommodation business has maintained some momentum with an expected small topline TTV growth despite a lacklustre domestic retail environment. We are also seeing some encouraging growth in our flights business. Our incremental investment in marketing in the last quarter, together with some solid merchandising of deals, has stimulated retail demand in the same period. In addition, previously announced hotel commission increases to 11% in 2013 have been successfully rolled out to the significant majority of our partners throughout the second half of the fiscal year.

“These positive factors have been eroded by a continuation of the year-on-year revenue shortfalls in Asia and ROW. Our focus on the Asia and content strategies … are targeting initiatives to get this business growing again.”

Meanwhile, in case you haven’t heard, Olivier Dombey has joined the Group as the new executive general manager for Asia, based in Bangkok, replaced Matthew Varley who left to join Wego. It is hoped that Dombey, formerly with HotelTravel as chief information officer, will be able to lift Wotif from the doldrums in a region in which he has extensive online travel experience.