The Bookseller.com

1st December 2008

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Falling prices hit Lonely Planet

14.05.08 Victoria Arnstein

Lonely Planet's UK arm saw sales fall 1.8% to £18.34m in the year to end-June 2007 despite selling more books than in the prior year, as the average selling price of travel guides fell. Stephen Palmer, c.e.o of Lonely Planet’s Europe, Middle East and Africa operations, put the drop in turnover down to an increasing trend for consumers to purchase cheaper city guides rather than country guides.

Gross profit for the period rose 5% to £5.46m, while profit after tax fell 8.5% to £506,000. Lonely Planet said that it was able to control its direct costs more effectively over the period, and so its gross profit margin rose to 29.8% from 27.9% the previous year. The accounts relate to the UK arm of the company, which was formerly owned by Lonely Planet Publications Pty Limited in Australia. In October 2007 BBC Worldwide acquired a 75% ownership stake in the Australian parent company, and became the controlling party of the UK arm.

Palmer added that he expected the accounts for the current financial year to be very different. "I think it will be a very different set of numbers. We are going through a period of investment in our products—books and digital—and that will be reflected in the numbers as well, but it is all as planned."

In a statement with its accounts, Lonely Planet said it expected the markets it operates in to stabilise by the end of 2008. It added that there was a "growing risk that environmental issues may start to influence travel trends", but Palmer said he felt the content of the company's guides was well positioned to meet these challenges. The report also reiterated the company's commitment to digital products stating that it was "looking to introduce new products in the digital sphere".

Financial Lonely Planet travel guides Home Victoria Arnstein