By BLAINE GRETEMAN | LONDON
Posted Sunday, June 29, 2003; 14.08BST
The travel industry has endured a nightmare trifecta: the Sept. 11 attack, the war in Iraq, SARS. But as Dinesh Dhamija strides through London clutching a bouquet of balloons emblazoned with the ebookers logo, it's as if the disasters never happened. "We knew we'd survive," says Dhamija, ebookers' founder and CEO. "The question was whether we would become No. 1 or No. 2." Today, ebookers is Europe's largest Internet travel agency and the first (as of May) to turn a pre-tax profit. It was also the London Stock Exchange's second-brightest star last year, with share prices up 324%.
It's been a bumpy flight since its 1999 launch. Ebookers' NASDAQ shares dove 95% from highs of $43 in 2000 to $2 in 2001. What helped it evade the fate of so many who failed? "We built a website around a business," answers Dhamija. "We didn't build a business around a website." In fact, ebookers still makes about 30% of its sales offline.
Dhamija, who came to the U.K. from India in 1968, set up a "hole-in-the-wall" discount-travel shop in London in 1980. "In the past 20 years, we'd been through plenty of things that were just as bad as the things that have hit us more recently," he says. "But we brought our contacts, and our ability to cut costs" to the Web.
That knowledge of the industry, not technowizardry, was the basis of ebookers' success. To avoid competition with low-cost, puddle-jumping carriers like Easyjet, it focuses on the mid- and long-haul market. To get cheap merchant fares, it has a physical presence in 11 countries. And it heeds the oldest advice in the travel agents' handbook: use flights to sell lucrative hotel bookings. In its one concession to trends, last year ebookers yanked its central booking office out of Britain and moved the 400 jobs to low-cost New Delhi.
It may not be sexy, but it is working. Sales rose 52% last year. Nearly all of that growth was organic. And despite acquisitions and increased volume, costs fell from $77.9 million in 2001 to $74.6 million last year. It must let a little air out of Dhamija's balloons, however, to realize how close his perch at the top of the industry is to the ground. Adding in taxes and exceptional costs, ebookers' maiden first-quarter "profit" of $175,000, after all, was an $8.1 million loss. But ebookers has shown that it knows how to reach the black ink, and as any old-economy travel agent will tell you, it's the destination that really counts.
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