Travelshop will undergo a radical review of its online advertising and acquisition strategy, after reporting weaker than expected annual revenues, says new CEO Glenn Robertson.
The Perth-based online travel agency recently reported operating losses, with revenues of just over $32 million against predictions of $A38 million. Robertson attributed this result to ongoing company alliances and advertising arrangements that had proved to be "not as strong as first thought".
The company needed to "get itself in order" and "rethink its position a little better", he admitted. The company's financial status upon Robertson's appointment as CEO four weeks ago was "not very good".
Robertson said the first step in the company's strategy overhaul would be to terminate a three-month advertising contract with News Ltd.
That arrangement had seen Travelshop presented as a traditional agency rather than a web-enabled travel agency, he said, due to Travelshop's previous management. "I don't blame News Ltd at all," he said.
Travelshop has seven retail outlets in Western Australia, with expanding points of presence in Sydney and Melbourne. The company recently announced it would acquire Melbourne offline travel agency Croydon Travel. That acquisition, Robertson said, would see annual revenues pushed up towards $55 million next financial year.
Robertson said the termination of the deal with News was not due to any widespread cost-cutting strategy. On the contrary, he said his company would further develop its advertising arrangements with local Ninemsn travel arm Getaway, which he said was "working better".