Travel booking group Webjet says trip bookings are tracking at 95 per cent of pre-pandemic levels and predicts its operational cash surplus will exceed $100 million by September.
In a trading update ahead of the group’s annual general meeting, Webjet’s managing director John Guscic said the company was on track to earn more than before the pandemic in financial year 2024 as demand for flights and accommodation continues to soar.
Webjet’s shares jumped more than 11 per cent to $5.68 by early afternoon trading on Wednesday.
Webjet managing director John Guscic.Credit:Arsineh Houspian
The ASX-listed company operates a local online travel booking website for consumers, and a global wholesale business called WebBeds, which sells hotel rooms to travel agents, tour operators and airlines.
WebBeds travel bookings have been above pre-pandemic levels since May, with this month’s total transaction volume expected to surpass record July levels. The accommodation wholesaler – which is the most profitable part of Webjet – has benefited from a strong Northern Hemisphere summer trading period. The growth has led to a bullish forecast from Guscic “that EBITDA margins will expand beyond pre-pandemic and continue to scale”.
RBC capital markets analyst Wei-Weng Chen said global macro-economic indicators suggested a slowing of the travel market, but WebBed’s growth should continue for the remainder of 2023 given its market share gains, rising customer numbers and technological improvements.
Webjet’s online travel site is also growing, with its total flights market share expanding by 57 per cent since the onset of COVID-19. Chen said while there’s significant travel demand, airline capacity is yet to return to pre-pandemic levels. This, coupled with higher ticket prices and widespread flight cancellations, could hurt flight sales.
Guscic said the company used the pandemic disruptions to “transform our businesses to ensure they would emerge more efficient, more profitable and with higher market share when travel returned”. Bookings on its Australian website were growing 50 per cent faster than travel demand industry-wide, and its market share had doubled to 11 per cent since the onset of the pandemic, he said.
Webjet turned cash-positive in the six months to September 30, with an average monthly surplus of $3.5 million compared to cash burn of $5.5 million a month last year.
In May, Webjet announced it had returned to profitability in the six months to March 31, even though it still handed down a full-year loss of $85 million.
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