I don’t have a breakout of number of flight bookings. Nobody...

I don’t have a breakout of number of flight bookings. Nobody seems to give it presumably because competitors could make use. Solely from personal experience I spend twice on accomodation than what flights cost. Allowing some percent for car rental and cruise sales, 1/4 of TTV could be flights which for WEB is $1B. Adjusting for several people on the one booking could reduce this 30% My average flight booking is around $600 so this could equate to 1.1 million flight bookings for $50 million booking fee revenue. This is a very rough ballpark figure and assumes WEB is not used for short inter-city commutes. Much of WEB’s expenditure would be for advertising so costs have to stay high or revenue falls.

Google is both selling advertising and competes with FLT and WEB in booking flights and hotels. It does this by metascraping and selling clicks to each subscriber such as Expedia and the airlines. In essence, Google is still only selling advertising and facilitating a subsequent travel booking. It is a rich man’s SkyScanner. Every travel agent realises that Google disintermediates them and is a big threat. FLT’s response was to drop flight booking fees online while still selling extras such as insurance and a price guarantee package. Both FLT and WEB use the GDS distribution system which does not offer airline extras such as seat selection and meals and so could be paying a fee to airlines to compensate. Airlines prefer the IATA NDC distribution system which does sell extras. Both FLT and WEB could be forced to move onto NDC.

Travel agents make much more money from hotel bookings because margins are far higher. Flight sales are being used as a teaser into the accomodation sale. WEB’s booking fees are an obstacle to selling accomodation so must fall or be removed entirely. The number of competitors in travel is huge and growing. Booking.com is the biggest in Australia and AirBNB does it too.

WEB’s EBITDA for OTA was $40 million so removing booking fees could put them into a loss of $10 million p.a. Travel Agency is a volatile and rapidly changing industry now. Whereas WEB was once a growth stock, it should be de-rated for uncertainty and is not investment quailty.