Webjet hits investor turbulence amid travel doldrums
Webjet is boosting advertising to spark the travel bug.
ONLINE travel booking service Webjet slumped 15 per cent after it warned of ''very low growth levels'' in the leisure travel market over the past four months.
Analysing the challenging trading conditions facing travel companies, Webjet said on Wednesday that it was concentrating on ''managing for margin'' in all parts of its business.
Webjet has issued guidance for an increase of at least 10 per cent in net profit to almost $15 million for this financial year. The forecasts exclude the cost of setting up a new accommodation website in Dubai.
But the commentary about trading conditions appears to have spooked investors, with Webjet shares falling 62¢ to $3.51 on Wednesday, its fourth consecutive day of losses.
Managing director John Guscic said the leisure travel market in Australia had shown ''very low growth levels at both a unit price level and transaction volume levels''.
Domestic prices had declined on a month-by-month basis, he said.
In an environment where consumers are cautious, the company has decided to boost its spending on advertising by $1 million in the first half of this financial year.
Webjet warned in August when it released its full-year results that there been a noticeable slowdown in demand across the entire industry due to consumers becoming more cautious.
The travel company also said previously that the strong Australian dollar had not been stimulating demand for travel as it had a year ago.