Amadeus attributed its nearly 15% jump in North American air
bookings in the first quarter to its continued investment in the market, which
it said was its fastest-growing region.
Amadeus' travel agency air bookings globally increased 1.6%
in the quarter.
Rajiv Rajian, Amadeus' executive vice president of business
travel and head of Travel Channels for the Americas, said the company has made
an effort in recent years to expand in North America with both employees and
its business in the market.
"The size and scale of this market, it lends itself to
being where we do want to have a presence," Rajian said. "We do want
to grow and be part of this market."
North America has steadily become a bigger part of Amadeus'
business. In 2014, 13.6% of Amadeus' total air bookings through travel agencies
came from the North American market. By the first quarter of 2019, that number
had increased to 21%.
"We see
opportunities in this market, and we'll continue to invest in growth based on
what we see in all kinds of sectors, from online to retail agencies to the
managed travel space," Rajian said. "We clearly see opportunities in
all segments of the business."
Rajian specifically pointed to growth in the leisure and
unmanaged business travel segments, both online and offline, as factors driving
the 14.6% first-quarter increase in air bookings through agencies in North
America.
Industry experts identified several factors that could also
be giving Amadeus a boost.
Industry lawyer Mark Pestronk, who writes Travel Weekly's
Legal Briefs column, said he hadn't seen a shift and was unaware of conversions
to Amadeus that could have affected first-quarter bookings. He said he believes
Amadeus agencies in North America are simply doing well.
Phocuswright's Norm Rose, senior technology and corporate
travel analyst, said that some major shifts by travel management companies (TMCs)
toward more exclusive arrangements with Sabre and Amadeus could have also
helped Amadeus' North American bookings.
Henry Harteveldt, founder of Atmosphere Research Group,
agreed that could be a factor.
"The TMCs are what move the meter when it comes to the
GDS bookings," Harteveldt said. "That's not to say other travel
agencies don't matter."
In the first quarter of 2019, Sabre, like Amadeus, reported
an increase in GDS bookings.
Sabre saw 6% growth in the region, "bolstered by
continued share gain at large travel management companies, including our
expanded partnership with CWT," Sabre CEO and president Sean Menke said on
the company's most recent earnings call. "In North America, we have
increased our booking share with large TMCs to approximately 80% of their
bookings."
Part of the reason Amadeus' bookings are growing at a rate
faster than Sabre's is likely because of the "law of big numbers,"
Harteveldt said.
"Sabre is the largest GDS network in North America, and
so the same amount of increase on Sabre would be relatively smaller compared
with that of Amadeus, which has a smaller presence in North America than its
larger rival," he said. "But I think it also shows that Amadeus
offers a product that more travel agencies like and are using."
Meanwhile, Travelport revenue declined in the first quarter.
While in Q1 2018 the U.S. accounted for 24% of revenue for its Travel Commerce
Platform, that decreased to 22% in Q1 2019. (Latin America and Canada remained
flat at 5%.)
Revenue in the U.S. decreased by $20 million, or 13%, in the
first quarter, Travelport said. That was caused, in part, by "the
reduction in activity with certain travel agencies."
Travelport is awaiting regulatory approvals as it goes
private. In its most recent earnings release, the company said it was waiting
on consent from Russia, but it still expects the acquisition by Siris Capital
Group and Evergreen Coast Capital Corp. to be completed in the first half of
2019.
Harteveldt said it's unlikely agencies are shying away from
Travelport because of the acquisition deal, but "there may be some
concerns about, simply, what is Travelport's future, and is Travelport offering
the same level of content and capability that travel agencies want when
compared with those of its two chief competitors, Amadeus and Sabre."
Amadeus is also likely benefiting from its business with
Southwest Airlines, which for two years now has used Amadeus' Altea reservation
system, Harteveldt said. The airline's expanded presence is likely giving
Amadeus a bump.
Also at play could be Amadeus' investment in hospitality
solutions. (Sabre has made similar investments, Harteveldt noted.)
"At the end of the day," he said, "a travel
agency is going to use the GDS that not only provides it with the best
financial proposal but with a product that is the most efficient and effective
for its agents to use."