Helloworld Travel Limited held their Annual General Meeting on Friday and gave shareholders and potential investors plenty of reasons to stay hopeful for a positive return to travel and business in 2021 and 2022.
As with most corporate communications in these strange times, this year’s Annual General Meeting was held virtually, with Helloworld Travel Group (HLO) CEO Andrew Burnes leading the company update supported by Chairman Garry Hounsell.
You can read the full report here on the ASX site, but in short, the key points and forecast HLO shared were:
- Given the recent success of the vaccine trials, HLO expects the rest of the world will start to open up throughout the second half of 2021 and into the first half of 2022.
- Through the financial year in 2022 (FY22), trading conditions will get better and HLO is hopeful the financial year 2023 (FY23) will see a return to their previous turnover and revenue levels.
- HLO’s retail travel agencies, mobile and corporate agents will experience a very significant increase in demand in 2021 with their services highly desired.
- People can then start getting back to enjoying the extraordinary experiences that travel brings them right around the world.
Burnes gave an overview of the financial year prior to March 2020 and the pandemic before the company was forced to effectively go into survival mode with HLO reporting a 50% drop in turnover versus 2019 in what Burnes said was: “For the first time in my tenure as CEO of the business, a loss for the month.”
It was only thanks to an enormous amount of effort and co-operation from all the Helloworld team said Burnes that the business was able to dramatically reduce its costs in the June quarter and generate a profit after tax for the year of $16 million which in the circumstances: “Was an exceptional outcome.”
The network’s agents were also thanked in Burnes address, with the leader saying he wanted to: “Acknowledge the extraordinary job they have done in both Australia and New Zealand to survive, to look after their customers, to manage the cancellation and refund processes and to remain positive in the face of extreme adversity.”
“Over 85% of our network members remain in business and are now starting to see green shoots with a recovery in domestic travel, trans-Tasman travel and importantly international enquiries for travel in the latter part of 2021 and into 2022.” He continued.
Staff were also praised globally, with Burnes noting that at the beginning of March 2020, HLO had 1,950 personnel working in the business, and while it was: “Very difficult to have to reduce our overall headcount, they still have over 1,100 personnel employed in the business, mostly in Australia and New Zealand.”
“Many of them have worked on a part-time basis since March while others have been stood- down for that period of time but as we roll into 2021 we are looking forward to welcoming back all of our existing personnel, initially mostly on a part-time basis but as 2021 unfolds we will bring back as many people as possible as quickly as possible to a full-time role within the business.” He said.
Moving into 2021, Burnes detailed the company’s ongoing operations and future strategy, outlining cost-saving measures, renewed partner agreements and investments in new technology.
Once borders reopen, Burnes said he anticipates a significant uplift in travel, saying: “We know travel agents will be needed more than ever to secure and organise travel experiences for their customers around Australia, New Zealand and the Pacific but more significantly around the world, once it begins to open up again.”
However, he was quick to mention that while there had been a significant uplift and boost for agents recently in domestic wholesale bookings with more to come once a Trans-Tasman bubble is established, it will still not replace significant revenues from global international travel.
‘In the new year, we would anticipate specific bilateral bubbles to open up with countries throughout Asia although we do not expect travel to Europe/UK or to the USA to open up in any meaningful way until at least the last quarter of 2021.” Said Burnes.
Positive news of a vaccine was also highlighted as “a very welcome morale boost to not only the travel industry but to the whole world and while it will take some time for this vaccine to be distributed and administered it appears to be a very realistic and positive pathway to a return to ‘normal’ by 2022 and we welcome this news with cautious optimism and considerable hope.” Said Burnes.
The recent purchase of Cruiseco said Burnes: “complements our very successful Seven Oceans Cruising business and we are confident that through these businesses and with the support of our agency networks we will be in a very strong position to market and sell global cruise products for departure later next year and into 2022 and beyond.” Said Burnes.
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Helloworld anticipate the remainder of this financial year will continue to be challenging, with losses in the vicinity of $1.5-$2 million per month at least until March 2021, however, depending upon what other international bubbles may have opened up by then say they are “hopeful that we would be close to a break-even position by the last quarter of the current financial year.”
Beyond that said Burnes: “It is not unreasonable to assume the rest of the world will start to open up throughout the second half of 2021 and into the first half of 2022 and while we do not believe things will return to their previous levels in FY22 they will certainly continue to get better and better and we’re hopeful that FY23 will see a return to our previous turnover and revenue levels.”
Competition declining, Helloworld Travel Agents in demand
Speaking about the future of agents and specifically within the Helloworld, network, Burnes said he anticipated that relative competition would be “dramatically reduced” in the months to come, with the group’s agents well-placed to benefit.
“We expect that our retail travel agencies will experience a very significant increase in demand in 2021 firstly because their services will be in great demand given the complexities of travel in a post-COVID world but also because the relative level of competition across Australia will be dramatically reduced given the recent announcements by some of our friendly competitors about the shrinkage of their own retail footprints in Australia and New Zealand.” He said.
Signing off his address, Burnes said:
“I stand before you today with a renewed degree of optimism about the travel industry and about our business. During the year it’s not that I couldn’t see the light at the end of the tunnel but it was more that I couldn’t actually tell whether or not we were even in the tunnel.”
Andrew Burnes, Helloworld Travel CEO
“I know in talking to my fellow senior executives in the business, to our many colleagues and partners throughout the industry and to our customers in the corporate and leisure world that there is now a sense of optimism that the worst of this pandemic and all the carnage it’s bought is coming to an end and the world is starting to right itself, as it was always inevitably going to do, and people can start getting back to enjoying all of the extraordinary experiences that travel brings them right around the world.”
You can read the full report here on the ASX site.