Everyone associated with Travelport has to have breathed a sigh of relief on the news that Travelport Holdings successfully revamped their debt, extending their PIK until December of 2016. Unanimous support from their lenders now ensures the travel giants ongoing operations.
The news that Blackstone would offer an unheard of 13.5% interest rate to Travelport lenders last month, fairly sealed this deal for most people. The alternatives to extending bearing obvious negative consequences, all concerned benefited more from going forward than backward into Travelport seeking protection from these debts. In a press release from Travelport Limited, Gordon Wilson, President and CEO of Travelport Limited, had this to add about the news:
“We are very pleased that Travelport Limited and our parent company have received overwhelming support for the modification and extension of its credit facilities. We believe this support reflects the strength of our business and the confidence in our vision for the future of the company. With the consents obtained, Travelport Limited will continue to have the financial flexibility to execute our growth strategy. We remain focused on expanding and improving our product and technical platform and building on our position as one of the world’s leading travel content aggregators and transaction processing providers.”
Aside the public relations fluff on these statements, and beside the overall tone of business in this news, Travelport has a big hill to climb, as do many online travel players. The recession has hit all sectors equally, travel on and off-line being no exception. Continual “good news” from the wings cannot long outweigh the real issues facing us all. For Travelport, their first order of business needs to be competing better – period. Look at the screenshot below from Room 77. Pretty soon hotels will be able to show potential guests the view from any room, add video of the top desk clerk, basically let guests “preview” their stay before they stay. And the big travel players offer what?
With Expedia’s TripAdvisor shuddering beneath their value proposition (reviews) possibly being valued worthless, and what’s worse – the company appearing to sacrifice “lambs” in its apparent death throes, and Expedia further distancing itself from the once bright stepson – there is chaos and opportunity for Travelport. But, Sabre Holdings too, has its share of woes. Continual PR fluff about their somewhat limited techy value makes even the world’s biggest travel player appear weak in the knees. AgentStream Deals + Extras sounds more like a used car sales pitch, than a cutting edge initiative.
The good news for renegade players like our client Stay.com, Oyster.com (a fave of mine), Jetsetter, Room 77, InsideTrip, and even major hotel brands like Hilton, is that the big boys loosing ground generally means opportunities a plenty. In fact, from our experience, Hilton and some other key players are far more “wired” and responsive than TripAdvisor, Expedia, Orbitz, or nearly any of the major online travel players have ever been. Just a mention of one of their press releases garners a thanks, etc. In fact, if you want to interact with someone at a destination, just hooking up with most hotels or services on Facebook, Twitter, G +, or even email is far more rewarding than dealing with these “aggregators” – one can as easily contact Google’s lead guru.
The bottom line for Travelport is, if Gordon Wilson and Jeff Clarke (above) wish to keep smiling for their corporate photo ops, they had better start innovating. The old saying; “it takes money to make money” is about as true as it gets. Expedia and the competition seem painfully unwilling to really invest in true digital strategies (my term), so – Clarke and Wilson & Co. have some ground to cover.
Toss in Google Hotel Finder, their Motorola acquisition, Flight Search, maps, wallet, etc., and what you have is a “must” situation for Travelport and the others. Bottom line? Those creditors may get 13.5 percent of nothing if Travelport does not get on the ball.
The same holds true for Expedia and the rest. As a final note, think about a service that helps hotels and airlines sell their inventory and DOES NOT take commissions. Now there’s an innovation. How about a company that uses what Offbeat Guides hints at, reviews and other values via devices, even Kindle Fire? Call me to find out more. :) Click on the image to see Kindle Fire.