Speaking at the Phocuswright Executive Conference, Jeff Clarke, the president
and CEO of Travelport, emphasized his
belief that an industry-wide commitment to bringing mass travel to emerging
markets such as India, China and the Middle East would have a profound and
lasting impact on the world’s socio-political and economic environment.
    “Just as the leveraging of technology to bring mass communications to
the East European Bloc resulted in the democratizing of that region in the
1980’s and 90’s, I believe there is an opportunity to bridge the cultural
divide and bring diverse peoples together through the facilitation of mass
travel in third world markets,” Clarke said. “Travelport is focused on the
development of distribution systems that will bring greater efficiency and
convenience to all travelers and the industry intermediaries who serve
them.”
  Citing the widely recognized and award-winning technology of it’s
global distribution system (GDS), Galileo and its leading online travel
agency (OTA), Orbitz.com, Clarke said that the continued development of
third world travel infrastructure coupled with an industry-wide effort to
optimize back-end technologies will increasingly support the
cost-efficiencies as well as “high touch” and “ease-of-use” factors
necessary to bring mass travel to emerging markets.
  Considering the historical significance of the global distribution
system (GDS) and infrastructure that brought about mass travel in the
United States and Europe, Clarke claimed an industry-wide effort is
essential to bring the same cost-efficiencies, scalability and reliability
that will enable mass travel in emerging markets.
  Like the GDS, it is generally viewed that over time OTA’s will also
play an important role in encouraging and increasing travel to and from
emerging markets; generating growth in travel/tourism and creating new
business-related revenue streams and jobs within these markets.
  “While use of the Internet to facilitate travel remains at the highest
levels in the United States, online travel penetration in Europe is
expected to double between 2006 and 2008,” Clarke said. “This year,
Travelport’s OTA business has grown nearly twice as fast as the overall
online travel market in the U.S. Gross bookings for Travelport’s OTA
business grew by 30% in the third quarter of 2006. Furthermore, OTA growth
in China, India, the Middle East and other emerging markets is expected to
be considerable in the years ahead.”
  In 2005, an estimated $15 billion in air gross bookings, 138 million
air tickets, $13 billion in hotel gross bookings and 1.4 million hotel
nights were sold in China. According to the World Travel and Tourism
Counsel (WTTC), China alone is expected to generate over $130 billion in
personal and business travel/tourism demand in 2006. Further,
travel/tourism is expected to grow an average of 18% between 2006 and 2010.
In India, international tourist arrivals have increased to 3.91 million in
2005, according to the Government of India’s Ministry of Tourism—up from
2.36 million in 2002.
  Clarke also indicated that the travel industry continues to be “ripe
for consolidation.”
  “There are some players who are stronger than others geographically and
some players who are stronger than others from a business mix perspective,
all of which have synergies in their business operations,” Clarke said.
“The challenges attached to this consolidation will be in successfully,
seamlessly and quickly integrating technologies to realize the value of
acquisitions faster.”
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