Ihug's agency open to offers

Travel.co.nz is one of a number of companies eyeing up Ihug's internet travel agency Travel Online.

Travel.co.nz is one of a number of companies eyeing up Ihug's internet travel agency Travel Online.

Travel.co.nz managing director Greg Southcombe says his company is continuing to discuss acquiring Travel Online, which launched in 1998.

Ihug director Nick Wood says Ihug has been considering a range of options for the retail part of its travel business, which required an injection of cash last year. The extra investment reduced the management stake in Travel Online from 30% to as little at 10%.

"We're focusing our attentions on whether we keep the retail part of the business, says Wood. "We're thinking of focusing on the software side and passing the retail sales side off to someone else. We're talking to various people to see what the best avenue is."

Wood says that rather than selling travel, Ihug wants to sell the software it has developed for Travel Online.

"We're working on expanding the platform we built for ourselves to be used by multiple agencies – a database-driven structure with a Web interface which manages their travel business."

Wood says Ihug may look to combine Travel Online's software assets – its award-winning website, a back-end customer management system called Tolnet and a corporate business tool called Wired World – with communications products such as voice over IP and high-speed data.

The leveraging of proprietary software and telecommunications links appears to have worked for travel.co.nz, which, since it relaunched as a wholly owned subsidiary of the listed Australian company travel.com.au a year ago, has used not only a website but internal productivity applications hosted in Sydney. Most of its travel consultants work from homes as far afield as Timaru, with phone and data links provided through a VPN.

In its former incarnation – a group of agencies centred around the family firm Jetsave Travel – travel.co.nz turned over $48 million in the year to April 2000. Southcombe says it continues to profitable and is "on track" for $60 million in business in the year to this April.

Contributing to that business, he says, is $10,000 a week in online booking from the US, $6.5 million in new corporate business since last April and $4000 a month in advertising revenue from the travel.co.nz website.

Southcombe says the company's roster of independent consultants – an idea picked up by the Australian parent company – has expanded from 25 to 48. He says a full-time recruiter has been hired.

"Our main competition is Air New Zealand – there's really no other online agency to speak of," says Southcombe. "The big brands have been slow to start – they have models that make it difficult for them to do it."

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