Website cashes in on hotel discounts

By CHRIS DANIELS


Riding in on the coat-tails of low-cost internet air travel, website accommodation company Wotif says its New Zealand business is booming.

Company founder and chief executive Graeme Wood, visiting New Zealand from his Australian base this week, said growth here doubled in the past 12 months.

Wood's company runs a site allowing hotels and motels to dump excess inventory at cheap prices, allowing consumers to get discount deals.

And it is not just backpackers or budget tourists using the service. Business travellers - particularly those in small and and medium firms - now made up at least half of its customers.

"The small and medium enterprise market and small corporates are really the ones who picked up on us early. They tend to also be leisure travellers.

"We like the SME (small and medium enterprise) market because they book regularly," Wood said.

"Big corporates have lots of buying power and they exercise that in the market place with travel management companies, but the smaller corporates never have that buying power.

"We have become the de facto booking tool for lots of corporate clients."

Wood said the expansion of Virgin Blue in Australia had prompted the big jump in online accommodation and booking. Air NZ had also encouraged New Zealanders to start booking air travel online.

The low-cost carriers had legitimised the online booking concept, which paved the way for wotif.com to follow up with cheap accommodation.

Wood said when Wotif was first set up, the big hotel chains were not interested because they believed the pressure on prices did not "suit their position in the market".

But that had changed, as they realised it was a cheap way of getting rooms filled.

A newspaper or radio advert was not the best way to fill rooms at short notice. Discounts for travellers can range from 30 to 70 per cent for hotel rooms.

Wotif, a private company, makes its money through a 10 per cent margin charged on rooms booked through its website.