Tampa-based Webjet.com takes off
TAMPA - When Australia's largest online travel agency looked to expand to North America in 2010, it made an unlikely choice: Tampa. Two years later, the decision is paying off. Tampa-based Webjet.com has become profitable, achieving roughly $100 million in ticket revenue primarily from international airline bookings. By its accounting, it ranks as the ninth largest U.S. online travel agency. Yet its presence remains relatively unknown locally, which is not surprising, considering it has just 20 employees. But the Webjet.com story has lessons for both consumers seeking to book international flights and economic development recruiters seeking an edge to promote the region.Webjet.com started in Tampa in April 2010 as a subsidiary of publicly traded Webjet.com.au, a 12-year-old company that reported a 24 percent increase in annual profit for the 12 months leading up to June 30 of this year, reaching about $14 million. Revenue rose 30 percent to about $62 million. Financials for the U.S. subsidiary are not made public, and comparisons with other companies are difficult because the major online travel industry companies have multiple businesses, such as top-ranked Expedia Inc., whose stable of companies includes Expedia, hotels.com. hotwire.com and five others. Although the success in Tampa makes the expansion seem like a natural progression, the move was counter intuitive. "History shows companies that migrate from Australia to the United States fail miserably 95 percent of the time," said Mathias Friess, chief executive officer and part owner of Webjet.com. "We always had a bit of hesitancy to go to the United States." Webjet limited equity and funding to $1 million and acquired the business assets of two existing websites: Farecrawler.com and Whentofly.com. The timing of the U.S. startup was difficult given the stress of the poor economy on travel. But top management in Australia showed its confidence in Friess, a native of Germany who previously headed Lufthansa Airlines' North American sales from New York and was head of global sales and distribution for Virgin Blue Airlines. Virgin had transformed from a low-cost carrier to a renowned international carrier, and Friess bolstered his experience as an entrepreneur through his association with Virgin's Sir Richard Branson. An early step was to choose a U.S. site for Webjet's expansion. Colorado, Nebraska and Florida became the final three choices. "We wanted to be in a time zone where the majority of travel was booked, so that meant east of the Rocky Mountains," Friess said. "Everything in the Northeast was cost prohibitive." Friess looked into Florida and in particular Tampa, where a relative lives, although that was not a determining factor. "What works for Tampa was its infrastructure," Friess said, regarding the area's fiber optics connectivity and labor pool. Tampa had an experienced workforce in skills Webjet needed. Some local airline call centers had downsized, Tampa had a pool of employees with experience from Disney and AAA operations, and Webjet could draw from those who had been assigned to MacDill Air Force Base and had international expertise. In addition, Tampa's universities provide a good pool of workers, and many speak Spanish. "Tampa is a beautiful spot," Friess said. "That certainly can't hurt." Webjet hired 15 for its booking service teams and another half-dozen employees for perfomance and marketing. It outgrew a Hyde Park office and relocated to an office on North Howard Avenue. "It's important to hire people for their attitude," Friess said, drawing on his experience of working for the charismatic Branson at Virgin. "You can teach skills." The company's sophisticated, proprietary algorithms create choices for various schedules and fares that are handled beyond Tampa. But the strategy that Friess said sets Webjet apart from other online travel services is very much an in-house creation. For example, someone choosing a domestic flight from a list on an online travel site is likely to consider cost and convenience — non-stop flights or brief stops or layovers at best, Friess said. Consumer strategy for international travel — Webjet's focus — is likely to be different. If a traveler could save $100 on an international ticket by accepting a layover of a couple of hours along the way, it might be worth it, especially for a family of three, four or more, he said. So Webjet's programs search for schedules and connecting flights that give consumers plentiful options that other services might not list. Also, Webjet employs service representatives in Tampa to handle problems and possible schedule changes to better serve its customers. "The biggest thing is we don't want to confuse customers," he said. Webjet is making inroads into Mexico and Canada. Further expansion is likely, which could make it an example for what's possible locally. "One of the things we need to build in an entrepreneurial economy are innovated new tech jobs," said Rick Homans, chief executive of the Tampa Hillsborough Economic Development Corp. "These are the kinds of companies that grow one job into five and so on. They offer the fastest growth in jobs year after year and its critical to attract them into our economy."
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