Hugh Jones, president and CEO of Travelocity Global, and Barney Harford, his counterpart at Orbitz Worldwide, shared a stage at the PhoCusWright conference in Orlando Nov. 18, outlining their companies' growth strategies.
Harford talked a lot about hotels and firing up OWW employees to focus on international hotel growth, where Orbitz is pursuing a modified retail model [consumers pay a deposit up-front as commission and the remainder to the hotel at checkout] in some Asia-Pacific markets.
Jones told the gathering that Travelocity's focus would be to become a better retailer. He hardly mentioned hotels.
With Priceline's Booking.com and Agoda expanding in Europe, Asia-Pacific, South Africa and parts of Latin America, and Expedia's Venere and hotels.com playing catch-up, but on a similar path, hotels, vacation packages and the advertising/media model are where it's at in the online travel agency business these days. That's where the money and growth potential are.
I caught up with Jones a little while after his talk and he said Travelocity Global was not less-focused on hotels than the other OTAs, and in fact is putting the finishing touches on a global content platform, which would enable Travelocity to pursue hotel growth in second-tier markets in Europe and Asia-Pacific.
Jones said entering those markets with a full-service travel agency solution like Travelocity's would not be the best approach, in part because of all of the overhead.
Instead, Travelocity is considering what it refers to in-house as the PAC (Published Agency Commission), i.e., agency model, and might enter these markets with a hotel-only or some other pared-down solution. The merchant model is relatively expensive and time-consuming to implement so in many developing, international markets the PAC model would be more nimble and effective, Jones said.
So, does that mean Travelocity would attempt to acquire a hotel business, as Priceline did with Booking.com and Expedia did with Venere?
Is there a hotel business out there which would be an appropriate fit for Travelocity's aims?
Jones said there might be some regional players that would be of interest, but he hinted that Travelocity's new global content platform would enable the company to pursue the fragmented hotel market in targeted countries on its own.
Travelocity has a lot to prove on the question of whether it might transform itself into a strong international player in the hotel arena.
Travelocity is late to the game, doesn't appear to be offering anything unique [although lastminute.com is a relatively strong brand in Europe] and has not become a major hotel power in the U.S., especially when compared with Expedia.com and hotels.com.
Still, if Travelocity is late to the game, the global hotel business is said to have a $300 billion potential. And, the overall drive to bring global hotels online still is in its very early stages.
So, one can't rule out Travelocity as a player, and its potential to capture a share of the market.
On other fronts, Jones revealed that lastminute.com in Europe faced many of the platform and integration issues that Orbitz Worldwide confronted -- and now says it has resolved -- with ebookers.
Jones said those integration issues are now behind lastminute.com, which has been focusing on readying a new shopping platform.
And, with that shopping platform in place, lastminute.com will be rolling out website improvements, which should be the answer for improving its conversion rates, Jones said.
So Travelocity/Jones might be considered the tall, silent type.
Jones is a tall dude, and Travelocity, part of privately held Sabre, has been relatively silent behind the "veil" of private ownership about its international hotel strategy.
However, Travelocity claims to be just as focused as its competitors in piling up hotel inventory and marketing capabilities in faraway lands.