19 August 2008

Travelport: booking softness

Travelport GDS said booking trends in the US for both its Galileo and Worldspan properties continued to soften through the second quarter and into the third.

The report noted the softness -- largely confined to the Americas in the first quarter -- has spread to other regions, including Europe and Asia.

During today's second-quarter earnings call, the company's management reported a decline in Galileo segments of 5% for the second quarter "as the weakness we saw in the Americas in Q1 spread to EMEA and APAC during the second quarter," said CFO Mike Rescoe.

Galileo segments in the Americas decreased 8% to 24.6 million, while international segments decreased 4% to 43.3 million.

The company is attributing the bulk of the 16% decline in Worldspan segments to the loss of Expedia business, but CEO Jeff Clarke said:

"Worldspan segments in the second quarter were down 1% when you take out Expedia."

Travelport management said declining segment trends accelerated in the early weeks of the third quarter.

"July came out pretty much the same as Q2, so July was down single digits as we saw in Q2," Mr Clarke said. He added:

"The first ten days of August, however, have been more and more negative. We're now seeing close to double-digit year-over-year declines in the first ten days. Ten days doesn't make a trend, but it's something we're watching very closely."
Report by David Wilkening