Kiwis to get the Travelbug, thanks to Trade Me

A report in The Dominion Post says that Trade Me’s new accommodation website Travelbug has signed up more than 1500 hoteliers and moteliers offering travellers more than 10,000 rooms from Ahipara in the Far North to Stewart Island.

The online booking site, launched yesterday, covers everything from holiday parks, to bed and breakfast, motels and top hotels and even luxury lodges for $2000 a night.

Trade Me chief executive Sam Morgan expected to double the number of operators within a year and had a long-term target of 5000 to 10,000.

Travelbug is taking on well-established online travel booking company Wotif, ranked as the top accommodation website in New Zealand last year, with Wotif running in New Zealand for four years.

The Automobile Association also offers online booking options for hundreds of hotels and motels, and there are also traditional accommodation guides such as Jasons Travel and AA.

It is a large and potentially lucrative market for online booking companies, and Travelbug intends to expand into car, tourist activity and flight booking.

Australia-based Wotif, which started just seven years ago, made a A$26 million (NZ$31 million) profit on A$67 million in revenues last year, on total transaction values of A$529 million. It has 9,000 hotels registered around the world, and has 160,000 bookings a month.

Wotif’s room nights sold in Australia were up 39 per cent last year, and in New Zealand they were up 43 per cent.

For Travelbug, hotels and motels do not pay to advertise, but pay a “success fee” of 12 per cent of the booked room night cost including Visa credit card charges, slightly more than the 10 per cent typically charged by information centres.

About 1.8 million bed nights are sold in New Zealand each month and Mr Morgan said the market was “wide open”.

No one had done online booking well enough, so far, though he admits to having used Wotif himself.

“We would be chuffed to get to 10 per cent of that market – that would be a great success and a very profitable business.”

Though Wotif is well established, Trade Me can tell the 1.5 million people who get its newsletter about Travelbug, with about two-thirds of all Internet users in New Zealand using Trade Me.

“We can turn the (existing Trade Me) traffic on to it, but that doesn’t make it a sure thing.” “We have to exceed expectations when they get there,” he said.

Trade Me aimed for success first in Travelbug before extending it to include options such as holiday homes and tourist activities, and then later, booking rental cars or flights.

“We have a few providers in pretty much every town, but we are hoping that number (1500) will explode now,” Mr Morgan said.

Travelbug shares a navigation bar with Trade Me, and also draws on the principles of feedback and trading histories. Prospective customers are able to check out other travellers’ experiences and provide their own ratings of accommodation providers.

Rooms run from $25 to $1500 night, but the main focus is for families at between $80 and $160 a night and Ttravellers can book online up to a year ahead.

Trade Me has built Travelbug in partnership with Vianet International, a Kerikeri-based travel software and development company and in its first full year as part of the Fairfax Media stable, Trade Me delivered earnings before interest, tax, depreciation and amortisation of $50.4 million, with the pre-acquisition target of $45 million, Fairfax having paid $700 million for Trade Me in April last year.

Trade Me has expanded from an online auction website to advertising jobs, property and vehicles.

Report by The Mole