Facing up to the challenges

During his recent visit to China, Jeff Clarke, CEO of travel distribution and wholesale company Travelport, discusses about global economic slowdown and his company's responses with China Business Weekly reporter Liu Jie.

Q: How has the financial tsunami affected Travelport as a transnational company?

A: Travel generally is down 15 percent globally, but it is less than that for Travelport, because of interregional travel and strength of our group travel (GTA) business. The decline for us is as low as single digit.

In fact, we are growing in emerging markets, like China and India, whereas in Continental Europe, our business has fallen quite a bit.

Q: What are the biggest challenges for your company in such a gloomy market environment?

A: Concerning challenges, I would say, to GTA, it is the affordability of travel, GTA is a large group travel company, and for groups looking to travel it must be affordable. The largest challenge of the last few months has been the high oil prices, nearly $150 per barrel a few months ago, which made travel very expensive.

On the other hand, due to inflation in some markets, such as China, the prices are further surging.

Q: How does Travelport deal with the challenge?

A: As a travel company, the first thing you have to do is to look at your overall cost structure then look at how you can help travelers, hotels and airlines, and also focus on customers who do want to travel.

For example, our group trips with GTA are suggesting alternative locations. For instance, if our travelers historically want to travel from their nations to Rome, Italy, now we may suggest they go to Spain or Portugal, which are less expensive destinations.

On our own side, we, of course, have to continue to make investments in technology that makes more travel choices at lower prices.

In a low economy, consumers are more price-sensitive, you have to give them or show them they can still travel at lower costs and make it still affordable to them.

(China Daily 11/24/2008 page7)