Travel segments booked by Galileo in the Americas fell by nearly 7 percent year-over-year during the March quarter, while "international" segments fell 1 percent with EMEA down 2 percent and Asia-Pacific flat. Parent Travelport's revenues were flat year over year, excluding the impact of its Worldspan acquisition.
According to Travelport president and CEO Jeff Clarke, "The weakness versus our plans has been in the online travel agency space. We have Orbitz and CheapTickets exclusivity, and their year-over-year performance is down, in part, because they had a hit-it-out-of-the-park performance in the first quarter of last year. In terms of the corporate business, it's also a little slower than we had expected.
"We get daily reports and [in April and May] they are swinging around a little bit," Clarke continued. "It was a little stronger in April, and slowed down a bit in early May. We’re not seeing a marked difference in consumer versus corporate. We're seeing weakness in the Americas in both. When I look at the U.S., I think a lot has been thrown at the market. Bankruptcies, unusual groundings, consumer confidence at record lows ... businesses pulling back and tightening their belts, particularly in the financial sector. When I see that segments are down 7 percent, I kind of smile and say, 'That's a lot to throw at you and have segments be down 7 percent.' "
"When you have a perishable seat or room, and markets soften, distribution becomes more, not less, important," Clarke added, highlighting that GDS users offer bookings that are "incremental" to those generated by suppliers' direct channels and tend to drive more international and complex trips in the "front of the plane."
As for one former alternative to the big GDSs, Clarke said "G2 had several businesses over its life as a company," including point-of-sale software that Travelport recently bought. "The one that didn't really work very well was the 'switch' to bypass the GDS. Effectively that's one of the reasons they're not in business anymore. They tried to build a business out of something that really wasn't there."