Introduction

Asiatravel.com with local offices in key destinations, is a pan-Asia online hotel and travel reservation service provider. Travellers can enjoy great value, last minute availability and instant confirmation with option to pay on checkout at the hotel. Our Click & Go, easy and hassle free website offers travellers a choice of more than 60,000 hotels for both their leisure and business needs. Soon we will extend last minute availability and instant confirmation on air tickets and dynamic air, hotel, transfer and tour packages from multi departure points in Asia, giving travellers a comprehensive 1-stop service with choice and convenience.

Financials

Our Group's revenue grew 31.3% ( S$13.64 million) from S$43.6 million in FY 2005 to S$57.2 million for FY 2006. The increase in revenue was due to the strong organic growth in some of the Group's core Asian markets ie in Singapore, Hong Kong, the Middle East and the Philippines and the successful implementation of a new user-friendly booking engine, AT3 that allows instant online confirmation of travel services. The Group's gross profit of S$16.44 million represents an increase of 28.2% from the S$12.82 million achieved in the previous corresponding period. The increase in the Group's gross profit is reflective of the increase in the Group's revenue. The net cash from operating activities has a healthy 159.8% growth in 2006 over that of 2005.

A quick run through of our fiscal year financial track record of turnover from 2002 to 2006 shows a compound annual growth rate (CAGR) of 11.5%. We recorded a year-on-year growth of 42% in room nights for our online hotel reservation service for FY2006.

We have achieved a record profit attributable to shareholders of S$3.3 million for the financial year ended 30th September, 2006 compared to a loss of S$6.4 million in the previous financial year. This translated into earnings per share of 1.70 cents as compared to a loss of 3.26 cents previously. This strong turnaround is attributable to stronger demand for the Group's services as well as a one-off operating expense incurred in FY2005.

Growth Prospect

With the WTO's forecast for up to 2020 for visitor arrivals for Asia and the Middle East, the recovering global economy spurring a growth in tourism, especially in Asia, the prevalence of low-cost air transport, increased cross-border trade activities contributing to an increase in air-travel and accommodation, we are all set to expect an increase in visitor traffic across Asia and the Middle East.

Various international tourism and sports events throughout Asia to be held from 2007 to 2010 will also support the positive forecasts - for e.g. the FIFA Women's World Cup, World Grand Prix Finals, the 2008 Olympics and more in the People's Republic of China, a number of World Championship events in Japan and Malaysia to expectedly growing popularity of new tourism trends such as eco-tourism and tourism markets such as Vietnam, Hong Kong, Macau, China and India and the much anticipated integrated resorts in Singapore all hold well for a more promising business future.

Demand for accommodation will not be met by current supply. The rising trend for cities to plug into Asia's MICE boom is translating into them building bigger and better facilities to capture the conventions market and this is also giving rise to the rising demand for hotel rooms. Many cities of Asia can be expected to face a room crunch. Therefore, meeting customers' demands will pose for us greater challenges! We will undoubtedly explore creative and alternative ways of meeting these challenges.

In view of the upbeat market outlook, the Group has plans to capitalize on this existing growth and implement a twin-growth strategy to extend the Group's destination and total travel reservation services and focus on positioning itself as a leading Pan-Asian online travel reservation service provider. Our twin growth strategies are as follows:

1. Expanding worldwide hotel destinations footprint:

We would tap into new destinations and travel products through collaboration with 3rd parties' online reservation systems to expand our worldwide hotel destinations footprint; together with Asiatravel's direct supplies of hotels in its core Asian destinations, this arrangement enables the Group to offer worldwide hotels on last minute availability and instant confirmation basis. 

A network of 10 offices in 7 countries primarily responsible for maintaining good relationships with hotels and to answer customer's enquiries with an on-the-ground knowledge 

2. Total travel reservation service provider:

(i) Offering real-time air-ticketing service to reach the mass market of business and leisure travelers;

(ii) Offering dynamic reservation of air-ticketing, hotels, transfers and sightseeing services in a single process providing one-stop convenience with choice; and

(iii) Offering value-for-money packages comprising air, hotel, transfers and sightseeing components.

 

These strategies will lay the foundation for the transformation of the Group from a niche hotel reservation service provider into a total travel reservation service provider, and are expected to lead to significant growth for the Group.