Are Serko Ltd (ASX: SKO) shares worth buying after the travel business provided an update?
Serko is an online travel booking and expense management for the business travel market. Zeno is Serko’s ‘next generation’ travel management application which uses predictive workflows and a global travel marketplace.
Serko’s trading update
The company wanted to keep the market informed on current trading conditions.
Serko said it intends to provide updates every so often to assist the market to assess changes to the environment.
The company said it has seen a gradual improvement in transaction booking volumes following the easing of domestic travel restrictions within Australia over the past couple of weeks. Transaction volumes increased to 44% of prior year volumes for the month of November (meaning it was down 56%). This was an increased from 35% of prior year volumes (down 65%).
The past week has seen some daily transaction rates at around 50% of prior year volumes.
It is New Zealand that has seen a particularly strong recovery. New Zealand domestic travel was only down 15% compared to last November. New Zealand was down 24% in October, year on year.
Australian domestic travel in November was 33% of November last year (down 67%) and October was 26% of last October (down 74%).
Serko CEO Darrin Grafton said: “While future trading patterns remain unknown, it is reassuring to see Australian travel bookings start to recover with the current easing of domestic travel restrictions in that market.
“During our recent earnings announcement we also advised that it was expected that new customers wishing to set up a business account on the Booking.com website would be directed to the new Booking.com for Business platform powered by Zeno in select markets imminently.
“We are pleased to confirm that new customers in select global (predominately English-speaking) markets, are now being directed to the new Booking.com for Business platform powered by Zeno. The rate of new organic sign-ups remain uncertain and will be dependent on local travel restrictions and trends in each relevant market.”
Summary thoughts
It’s good to hear that travel is getting close to normal in New Zealand, and Australia is steadily recovering as well. The Serko share price is almost as high as it was in January 2020 (the peak), so it’s not exactly cheap any more. I think it’s still a good long term idea, particularly as COVID-19 vaccines are close and travel is recovering.
But there are other digital ASX shares I’d prefer to buy such as Pushpay Holdings Ltd (ASX: PPH) which is transforming the donation process in US churches.