Travelport CEO Says Merchandising Moves Are Driving Agency Share Gains

by Michele McDonald
Travelport CEO Says Merchandising Moves Are Driving Agency Share Gains

Travelport president and CEO Gordon Wilson.

Travelport’s progress on the airline merchandising front “is driving tangible travel agency share gains,” according to chief executive officer Gordon Wilson.

In a conference call with analysts to discuss fourth-quarter and full-year 2016 earnings, Wilson said more than 210 of its 400 airline customers have implemented Rich Content & Branding, which provides travel agents with “state-of-the-art abilities to show and sell all of their products, fares, fare families and ancillaries.”

In several regions, he said, Travelport is winning new business because it can offer travel agencies a one-stop shop for a wider range of content on a fully integrated basis than its competitors can offer.

Wilson pegged Travelport’s current worldwide market share at 23%.

Meanwhile, Travelport has finally left the Orbitz “headwinds” behind, resulting in a 3% year-over-year increase in U.S. segment volume in the fourth quarter of 2016

Orbitz, once Travelport’s largest customer for GDS services, renegotiated its contracts with all three GDS companies in 2015 to shift larger shares of its business to Amadeus and Sabre. That dragged Travelport’s U.S. numbers down over the last couple of years, but they will no longer suffer from year-over-year comparisons.

But that wasn’t the only boost to the U.S. figures during the quarter. “We also grew in quarter four at a faster rate than the market,” Wilson said.

The U.S., however, is one of the company’s lowest yielding markets; most of its travel is domestic, which means airlines pay the lower “home” rates of segment fees.” So while Wilson said he is “excited” that the U.S. is turning a corner, other parts of the world have some interesting stories to tell.

International regions represent 73% of Travelport’s platform revenues, Wilson said. “In Europe, we maintained stable air share for both the quarter and the year, while achieving revenue growth across both air and Beyond Air,” he said. (Beyond Air includes the Rooms and More hotel and car rental booking platform, the eNett payments business and other non-GDS sources of revenue.)

“We grew ahead of the market in Germany and Russia for the fourth successive quarter, and above the annual market growth in France, Spain and Greece,” Wilson said. “Combined, the volumes of these five countries represent nearly half of the European GDS air market.”

The next “Jewel in the Crown” for Travelport may be India, which last year was the third largest GDS market in the world, after the U.S. and Germany, and Wilson expects it to move into the No. 2 slot this year.

“Travelport volume in India, meanwhile, was up by 23% in January, and we added two points of air market share in the month,” he said. We now have over one-third of the GDS air market share in this key growth country.”

That is likely to grow this year, thanks to an agreement with Indigo, now the largest airline operating in India. “It only went live in our system in November,” Wilson said.

Travelport reported full-year net income of $15 million, down from $20.2 million in 2015. Revenue for the year increased 6%, to $2.35 billion.

Air revenue increased 3%, to $1.65 billion; while Beyond Air revenue grew 18%, to $579 million.

Tip of the Day

As an industry, we are selling experiences and travel. What better connection can we make than suitcases for children? I want to put a call out to fellow advisors to find out who runs the foster care in their community and ask them to collect luggage, book bags, toiletries and such from their clients.

Anita English, My Travel Advisor

Daily Top List

Best Spots for Cliff Jumping in Ireland

1. County Antrim

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Source: CNN


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