The US presidential election is having a bigger impact on the travel sector than Brexit, according to the UK’s leading Global Distribution System Travelport.
Reporting third quarter results to September 30 last week, the US-listed but UK headquartered firm said it saw “robust trading” in the three-month period.
Travelport net revenue increased 6% to $591 million for the quarter, while operating income stood at $62 million and net income at $21 million.
Gordon Wilson, president and chief executive of Travelport, described the impact of Brexit as “marginal”.
Favourable foreign exchange movements during the quarter helped Travelport achieve a 15% increase in adjusted profit (EBITDA) to $150 million.
Asked about the outlook for 2017 he said: “I think the shock of Brexit was overblown. We have not left yet and won’t for a while yet
“At the end of the day the UK economy is quite resilient and entrepreneurial. I think trading is going to be harder but people are going to work hard to gain more share.”
A greater need for UK businesses to go out and trade with the wider world post Brexit could actually be a boon to the corporate travel sector, Wilson said.
With growth difficult to come by in the UK market, Wilson said it’s down to adding value and he said “there is a huge opportunity to co-operate with mobile apps, which is why we are investing so heavily in them”.
Travelport has recently extended its agreement with easyJet, which uses a mobile app built by MTT, the Dublin-based developer it bought in July last year. It is also working with Etihad on mobile.
“The UK travel market is not going to see double digit growth, it’s going to be more displacement business, it’s going to come from different share, from different products and capabilities.”
Wilson added Brexit was less of a worry than the US presidential election. “In all honesty there is less certain demand in the industry at the moment,” he said.
“But I think the US election is having more on US bookings than Brexit is in other markets.”
He said the prospect of Trump presidency will only make a difference of the US becomes more inward looking as a result.
Wilson said the slowdown in the US did not reflect anything specific about this year’s US presidential election – widely seen as one of the most vitriolic and divisive in history.
“Elections always have an impact on travel. I’m not sure why that is. We are not that bullish on Q4 in the US. We don’t see it come back that strongly,” he said.
Despite the outlook, Wilson said US business was up 1% if the impact of losing its partnership with OTA Orbitz, after it sale to Expedia, is stripped out of the figures.
However, Travelport said it is seeing encouraging signs of growth in emerging markets in the Far East like Japan, where it works in partnership with JAL, Indonesia, where it has agree deals with three major agencies, and South Korea.
India is also seeing promising growth. Travelport currently has an exclusive deal with the country’s biggest lowcost carrier Indigo, which Wilson said he expected would remain exclusive for some time.
Indigo currently has 30% of the Indian domestic market, but is planning a massive increase in its fleet from 112 aircraft, with a further 424 on order.
APAC business is closing in on the US, Travelport’s second largest market and growing at 10% per annum.
Travelport is also seeing sustained growth in its non-air business, in particular through payments firm eNett which saw quarterly revenue grow 60% to $42 million.