Travel software company Serko is lowering its revenue expectations following the disruptions to global business travel caused by the rapid spread of the Omicron variant.
File image. Serko is lowering its full year revenue expectations. Photo: 123rf
The company, which had developed software used to book and track business travel and expenses, downgraded its full year revenue guidance from between $21 million and $25m to be between $18m and $20.5m in light of volatility resulting from the effects of Omicron.
Its cash burn rate for the six months ended March is expected to be close to $4m per month, which is at the top end of the forecast it issued in November.
"Business travel volumes in December and January normally experience a seasonal reduction in booking volumes during the holiday season, however, in the current year this reduction in volumes has been exacerbated by travel disruption caused by the Omicron variant," the company said in an announcement to the stock exchange.
Sales volumes through its specially designed platform for Booking.com had also fallen due to Omicron, but activity over the past week had recovered to about 90 percent of October volumes.
Revenue in the Australia and New Zealand market had been in line with expectations up until the end of December, Serko said, but volumes dipped below anticipated levels at the start of January.
"While we are seeing some early signs of recovery in Australia, demand in New Zealand has been significantly affected, particularly over the last week of January.
The company said the lower end of its revenue guidance assumed that travel volumes in February and March would be materially lower than the levels seen in the last week of January, due to the effects of the Omicron variant.
The higher end of the forecast was based on a seasonal lift in travel, the recovery of sales through Booking.com for Business, and the gradual easing of Omicron cases in the Australian market.
"Our expectation is that the recovery in booking volumes will be partially offset by lower New Zealand bookings as this market experiences the impacts of Omicron."