Travelport says the quality of its technology offering has helped it consolidate its market-leading position in the UK following a spate of business wins.
Travelport credits quality of tech for consolidating UK market leadership
Travelport says the quality of its technology offering has helped it consolidate its market-leading position in the UK following a spate of business wins.
Speaking to Travolution yesterday as the technology provider and GDS announced its first quarter trading figures, Gordon Wilson, chief executive of Travelport, said the UK GDS market was up 2%.
This was ahead of growth seen in other mature western European markets and came after Travelport secured deals with Hays Travel, Holiday Genies and Statesman Travel.
Flight Centre is putting Universal Desktop into its retail stores and Travelport renewed a deal with agency group The Travel Network Group and became the first ever GDS supplier for On The Beach.
Wilson said the latter would hopefully herald the bringing in of other dynamic packaging online retailers as Travelport makes its more cost effective to work with the GDS through its Universal API.
“We have been improving the breadth and depth of the content by including the easyJets of this world and there is more coming.
“With our new air merchandising platform we are busy implementing carriers including a number of UK-centric airlines and firms like On The Beach which see huge benefits, not just from access to airfares but also from our hotel content.
“All the time we are improving our shopping algorithm to make it less transaction intensive on the system which means we can deliver it at a lower cost.
“The main demand from On The Beach and Holiday Genie was around the quality of the product. They have to have the content to sell and get it in a fast, efficient way.
“In the UK we are growing based on the products we have in the market, which is great. We have won new accounts in the OTA space and TMC space and retail leisure area.
“We are very bullish in the UK. That the competition is out to get us is a compliment – we are the guys to beat. The reason is we have invested a lot of money in our products to improve them.”
Wilson said Portman Travel and Kuoni have just implemented SmartPoint and 1,500 agencies in the UK have downloaded Travelport’s mobile agent app from the iTunes store.
Travelport is looking to bring more non-air product into its system, including holiday ancillaries including insurance and limousine transfers, after this segment saw a 20% year on year growth.
Wilson said this could mean that Travelport will look at tailored commercial models for some sectors to make distribution through the GDS cost-effective.
He said Travelport would be investing $120 million into its products and service this year and because of the nature of its business this will be most focused on distribution.
Business coming through the firm’s accommodation offering Rooms and More is up two-fold. Rooms and More has recently undergone a revamp based on feedback from customers.
“Rooms and More has the most complete offering of individual hotel properties bookable than any other tool in the market,” Wilson claimed.
“We have just integrated Lowcost Beds and are at 450,000 individual bookable properties. Most analysis will tell you there are about 500,000 individual properties in the world.
“Every hotel has got at least two applicable offers and suppliers and there are one million offers which means some have many more.
“That’s more than Expedia and more than Priceline, inventory from which are both in Rooms and More anyway.”
As part of the revamp Rooms and More, which was built out from meta-search technology bought in by Travelport, the look and feel has been improved.
Commission payments to agencies have also been streamlined, with agents now not having to have a Paypal account to receive them.
Travelport’s latest quarter is the last which will see an impact of the loss of United Airlines’ Master Services Agreement following the merger with Continental.
With this taken out of the figures adjusted EBITDA increased by $6 million on the same period in 2012.
A refinancing of the vast bulk of its 2014 maturities in April has pushed back its earliest debts repayments to the back end of 2015.
Looking forward Travelport will have reduced litigation costs due to the resolution of bond holder disputes following the last refinancing and its anti-trust dispute with American Airlines.
Wilson said the main impact in Q1 trading was seasonal due to there being one less trading day in the period this year in most main markets than in 2012.
He also said there has been an impact on the GDS sector of capacity reductions in the US although this has been made up by expansion in the Middle East by carriers like Emirates.
Significantly Travelport’s RevPas (revenue per available segment) was up 6% to $5.38 indicating a diversification of its business and it has increased its guidance on this key metric for year end 2013 to 5%.
