Travelocity Global CEO works on turnaround and wants fair share
This is becoming a familiar online travel story: How do you turn around a company that’s apparently lost its mojo?
The formula du jour? Bring in new talent and fix the technology.
That’s is what is taking places these days at Travelocity Global (Travelocity, lastminute.com, Zuji and World Choice Travel etc.), where Carl Sparks, on the job as president and CEO since April, candidly talks about the company’s position and where he hopes it is headed.
If this seems like shades of Occupy Wall Street, the chasm isn’t as deep.
Lastminute.com has what Sparks describes as the number one brand reputation in Europe, for example, but “is not number one in revenue.”
And, with companies such as Booking.com and Expedia throwing their weight around, “it’s a knife fight for share,” Sparks says.
Travelocity has sharply declined from its heyday, when it was the leading online travel agency in the U.S., but there hasn’t been much frank talk publicly from management about its current position since Travelocity and its parent, Sabre, largely went dark behind a private equity curtain in 2007.
Purchasing Lastminute.com for more than $1 billion in 2005 and the difficulties in integrating it had to be a huge distraction along the way.
Among the major U.S.-based OTAs, Travelocity and Orbitz are considered the weak links, and Cheapoair.com is considered an up-and-comer in terms of traffic.
And, while Orbitz has been engaged in a turnaround plan for at least a couple of years, Travelocity apparently has some catching up to do and a comeback story might be more protracted.
Sparks, who most recently was president of Gilt Groupe and before that worked as general manager of Hotels.com, says he’s recruiting talent to improve keyword bidding and search engine optimization; making email marketing efforts more data-driven; conducting A/B testing of landing pages; upping the sophistication of hotel sort and analytics, and streamlining the booking process.
Sparks claims that Travelocity Global is more international than Orbitz and although Europe has been “soft,” Travelocity’s brands, including Zuji, have been showing some strength in Australia and India, in particular.
In the U.S., Sparks says, Travelocity is strong in air, but isn’t getting its “fair share” of the more lucrative hotel business and is striving to become more effective in grabbing prominant display space on the “digital shelf.”
Sparks acknowledges that losing the Amex deal was “a difficult one,” although he points out that portal deals such as the one with AOL don’t have the luster that they once did, adding that he “didn’t even have it [the AOL deal] in next year’s plan.”
If that sounds like spin, then consider the following.
Sparks contends that the depth of changes that American Express wanted from its private label provider going forward was so extensive that it didn’t jive with Travelocity’s priorities and would have distracted from the turnaround work under way.
“What would have been right for their business wouldn’t have been right for mine,” Sparks says.
In an interview several weeks ago, Sabre CEO Sam Gilliland said he didn’t have the details of the economics Orbitz might have brought to bear to win the Amex business, adding that the marketplace is competitive, and “sometimes you lose.”
If there were any doubt, Gilliland affirmed that Travelocity Global is one of Sabre’s core assets so if you take him at his word, don’t expect Travelocity to get spun off or consolidated any time soon.
That leaves Sparks with the tasks at hand.
And, if Sparks is going to have to do some heavy lifting to get Travelocity on track, he exudes confidence about it all.
Sparks says recent experience both inside travel and outside it in other industries shows that drilling down and fixing the technology will bring companies back.
No question, he says, the process works.
So, it all presumably hinges on the perennial issue of execution.
Meanwhile, Sparks argues, there are forces on the sidelines who are rooting for Travelocity, as well.
“The hotels want us to succeed,” Sparks says.
A stronger Travelocity Global, goes the thinking, would be a bit of a counterweight to Booking.com, Expedia and even Orbitz.
Sparks and Travelocity undoubtedly have their “fair share” of work to do.
Dennis Schaal was North American editor for Tnooz.