VANCOUVER - Uniglobe.com Inc. (CDNX:UTO.B and OTC:UGTRF) today announced that the primary focus of the Company for the immediate future will be to step up its concentration on the high-margin retail cruise sector.
U. Gary Charlwood, the Chairman of Uniglobe.com, reiterated his message from the Company’s Annual General Meeting held on May 31 that Uniglobe.com will be focussing on the sector in which the e-commerce travel company is already one of the industry’s leaders.
“For Uniglobe.com, the cruise sector, along with high margin tour product and our fast growing air/car/hotel retail sales, will enable the Company to reach sustainable profitability earlier than it would by chasing top line sales as is the practice of most others in the e-commerce travel sector,” said Charlwood.
The plan will see Uniglobe.com eliminating current costs associated with money-losing sectors that are unlikely to lead to profit for a long time to come. As such, Uniglobe.com is eliminating its wholesale division and has agreed with Uniglobe Travel (USA) LLC. to terminate its contractual obligations to provide fulfillment services to the approximately 180 home-based UNIGLOBE InHouse franchisees effective August 1, 2000.
“As a result of this decision, gross travel bookings and online sales revenues will be reduced significantly for Uniglobe.com, but so will the expenses for servicing these sectors. Gross travel bookings during the first quarter of 2000 for the sectors to be discontinued were approximately C$17 million. However, the gross margin on these sectors simply was not enough to make a profit nor the efforts worthwhile. We expect to reduce total expenses by approximately 40 percent through these and other measures,” explained Charlwood.
The changes in bookings, gross margin, and expenses will be effective August 1, 2000, and will become evident in financial reporting as early as the fourth quarter of this year.
“This decision, along with existing resources and the additional capital we plan to raise from strategically motivated investors, will allow our senior operating management to put its energies and creativity primarily into the retail cruise market. The litmus test in the future for the analysts that follow this sector will not be to determine who has the fastest growth but rather how quickly and how significantly income can exceed expenses on the way to sustainable profitability.”
“We believe our continued focus on the direct retail cruise sector will get us to profitability before others. We’re shooting for a 10-percent share of an online cruise market forecast by Forrester Research, a leading Internet research firm, to reach US$2.5 billion by the year 2003. Our business goal en route to that target is to reach profitability in early 2002,” said Charlwood.
Uniglobe.com Inc. provides products and services via the Internet to leisure and business travelers. Uniglobe.com customers are supported by live agents via e-mail and an 800 number available 24 hours a day, seven days a week. Strategic partners include Expedia.com, Yahoo!, Lucent Technologies, Visa.com, Excite Canada, Galileo International, DoubleClick, Autobytel.com, Avenue A, GetThere.com, and LeisurePlanet. Its largest shareholder, Uniglobe Travel (International) Inc. is the world’s largest single brand travel franchise organization with 1,100 locations in more than 20 countries.
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements concerning Uniglobe.com’s continued growth in the online travel industry. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors include, without limitation, growth of the travel industry, the Company’s rate of growth, and the Company’s ability to drive on-line traffic to its Web site. Readers of this news release are referred to the Company’s filings with the Securities and Exchange Commission, including the Company’s Registration Statement on Form 20-F for further discussion of these and other factors, which could affect future results. Forward-looking statements are based on the estimates and opinions of management on the date made, and Uniglobe.com assumes no obligation to update such statements if circumstances or management’s estimates or opinions should change.