The Webjet Ltd (ASX: WEB) share price is in focus after the ASX travel share gave a trading update at its annual general meeting (AGM).
Webjet has three different divisions – the online travel agency (OTA) business Webjet, the business to business (B2B) provider WebBeds and the global motorhome and car rental website GoSee.
Webjet share price
Trading update
Webjet revealed that the strong start to FY24 has continued.
As of 27 August 2023, WebBeds’ total transaction value (TTV) is up more than 30% (and up more than 40% in Australian dollar terms), with bookings up more than 30% compared to the same period in FY24.
Turning to the Webjet OTA business, for the period to 27 August 2023, total TTV is up more than 20% and bookings are up more than 5% compared to the same period in FY23.
GoSee, which is by far the smallest segment, has seen no growth (flat) TTV to 27 August 2023, while bookings have gone up more than 10% compared to FY23.
The business said it’s going to announce its FY24 first half result on 22 November 2023, which is when we’ll get a good look at how profitable these divisions and the overall business have been.
Is the Webjet share price a buy?
It seems the future is looking very promising for the company.
WebBeds is a particularly exciting prospect because of its global reach and its ongoing wins of new clients, with all of the travel activity returning to normal after the COVID-19 disruption. The company said it has significantly outperformed the market since May 2022, which bodes well for the next 12 months.
WebBeds is now 50% more efficient on a booking per full time employee basis compared to 2019. It’s also rolling out “AI, robotics and machine learning”, which will help it gain better insights into customer preferences.
A new WebBeds platform has enabled higher search capacity and quicker response times, which is helping increase conversions and provide the ability to scale.
Webjet OTA says that it has extended its lead as the number one OTA, gaining market share (from 5.6% in 2019 to 8.9% in FY23). It’s now benefiting from the ramp up of international travel back to full capacity.
The Webjet share price is not cheap like it was during COVID-19, but there is plenty of potential for the business to grow margins and overall profit as it returns to full travel activity. I’d be happy to buy it for the long-term.
