International Transactions Drop In Fresh ARC, Travelport Data

Declines in international travel transactions are happening at a faster rate than domestic transactions, according to October's ARC statistics released late yesterday.

According to the monthly ARC sales summary, international transactions are down 13 percent from the preceding year to 2.9 million, while domestic transactions decreased 7.9 percent to 8.46 million. October is the first month during which international transaction declines have outpaced domestic drops since both segments began experiencing continuous negative growth earlier this year

Meanwhile, Travelport's third-quarter earnings report released today shows Travelport GDS's booked international segments fell at 10 percent, the same rate as those in the Americas during the quarter, which ended Sept. 30. For the full year through September, Travelport's Americas segments, which were down 14 percent to 168.5 million, far exceed international segment declines, which are down 5 percent to 160.3 million.

The segment declines continued their expansion into the fourth quarter, Travleport officials said during their earnings call today. Citing fourth-quarter data through Nov. 11, Travelport CEO Jeff Clarke said, "The segments for Travelport overall are now down 16 percent and the Americas are down 15," Clarke said. "They're the weakest in Asia, down about 20 percent in Asia and down about 16 percent in EMEA. That averages out to about a 16 percent decline."

Clarke said the segment declines are "a little mixed among the businesses," with the online travel agency channel "down about 7 percent, the global accounts down about 20 percent and regional accounts down about 18 percent."

Still, Clarke noted booking is soft across all regions and "frankly, all countries," he told investors today. "There's even been a slowdown in India and some of the other emerging markets. So we're seeing an increasing slowdown, and the recent decreases in fuel prices and some of the recent price actions you're seeing by some of the airlines have yet to show a differential in the trends here. These numbers are as much of a decline as we've measured in many periods, and they're quite serious."

Travelport's third quarter, the first in which Travelport GDS's numbers include Worldspan's, shows an 18 percent net revenue increase to $531 million compared with the same period last year. Overall, Travelport's net revenue decreased 16 percent to $634 million. Operating income increased 4.5 percent during the quarter to $93 million and is up more 33 percent though the September.

Until recently, international growth has been a beacon of optimism for travel management companies and other suppliers who until recently have pointed to Asia/Pacific, Europe and Latin American business growth as a solution to offset their torpid U.S. business segments. However, as the global economy weakens, corporate travel cost cutting measures have accelerated and many companies now include expanding demand management efforts outside of the United States.