Serko working to find silver lining out of travel chaos

Wednesday, 24 June 2020

Darrin Grafton, chief executive of travel software company Serko, says staff has been flat out developing during the Covid crisis.

As Covid-19 shut down border after border, travel technology company Serko saw its bookings and revenue shrink dramatically.

But the company says bookings are beginning to return, and it is in a reasonable cashflow situation to ride out the coming months.

Serko, whose software helps companies manage their travel bookings and expenses, has posted an annual loss of $9.4 million for the year to March 31, compared to a profit of $1.6m last year.

In February, Serko's main revenue earner, its online travel booking system was receiving up to 24,000 bookings a day.

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A month later, daily bookings had plunged as much as 90 per cent on the same period a year earlier. So far in June, they are back to around a quarter of their levels a year ago.

Chief executive Darrin Grafton said that although the outlook was highly uncertain, the company expects its core Australasian markets will be operating at 40 per cent to 70 per cent of pre-Covid 19 levels by March next year.

With lockdowns and non-essential travel still suspended around much of the world, he said that was as much guidance as he could give.

Qantas are preparing for a number of planes to return to the skies after being grounded due to travel restrictions during the pandemic.

But there had been some silver linings, with several major deals with resellers such as Booking.com, in the last three months.

Serko undertook a $45m capital raising late last year, including participation from Booking.com's owner, Booking Holdings.

This meant the company could operate within its current cash constraints for some time, Grafton said.

Around 16 employees and contractors had lost their jobs in a restructure, but other contractors were brought onto the staff, so the headcount of 230 had remained about the same.

One of the most amazing things out of the crisis was that big travel resellers were still investing heavily in improving their systems, and that was resulting in work that would never have happened otherwise, Grafton said.

''People haven't stopped investing with us.''

'We've done a major delivery of a massive platform for Booking for Business [Booking.com] and we delivered that on May 25, and that's an incredible achievement under these conditions. It's the biggest brand in our industry.''

Longer term, even with global aviation largely grounded, Grafton said it still had some guaranteed revenue coming in from parts of the business.

Its premier booking platform Zeno was still able to be rolled out in North America and Europe as domestic travel picked up, even if long-haul travel was closed, he said.

Another promising area was expense management, which already formed about a third of its business, Grafton said.

''We're not just travel, we're also an expense business so people are managing more than ever expense controls, working from home cost controls, working from home offices and that's what we do as well.''

Serko took $1.6m in government Covid relief, including over $800,000 in wage subsidies. Employees took a pay cut for three months.