At the end of September, Travelport reduced its workforce. Sources said the cut was about 10 percent of employees. A media relations official declined to address that figure.
“Our goal is to be the industry’s most effective and efficient company, delivering the best technology that enables our customers to be the most modern retailers,” the official wrote in an Oct. 5 email. “With over 85 percent of our customers upgraded to Travelport+, we are doubling down on modern retailing innovation and AI initiatives for 2024. To support this next chapter of growth, we have made some organizational changes which improve our agility and streamline how we service our customers.”
Asked for more details, the representative wrote, “Most of these changes were to oversight roles in development. Now that we have successfully launched Travelport+ and upgraded the majority of our customers to the new platform, these changes will allow us to create and respond to innovation opportunities with even greater speed and agility than our competitors.”
After the company in March announced it reduced its interest expense thanks to refinancing and received an infusion of $200 million from majority owners Elliott Management and Siris Capital Group, credit rating agencies in April reiterated their “negative” outlook on more than $4 billion in debt for Toro Private Holdings, parent of Travelport.
Moody’s in April described the refinancing as a “distressed exchange, which is an event of default under Moody’s definitions.” Moody’s viewed Travelport’s liquidity as “adequate.” According to an April communication from S&P Global Ratings, “We continue to view Travelport’s capital structure as unsustainable despite an expected improvement in operating performance.”
The ratings agencies’ statements occurred in the weeks after Travelport acquired Deem (and shed a substantial number of Deem employees). Travelport has positioned Deem as key to its strategy for supporting modern retailing in the corporate market. Last month, Travelport said Christopherson Business Travel became the first travel management company to issue a ticket on the Deem platform since its integration with Travelport+. CBT also is a longtime partner of SAP’s Concur Travel, a Deem competitor in the corporate online booking space.
The Travelport+ brand represents a single GDS platform using the Galileo designator consolidated from three GDS cores: Apollo, Galileo and Worldspan.
According to Moody’s, Travelport reported net revenue of $1.3 billion in 2022. S&P said the figure was about $2.5 billion in 2019. “Travelport’s GDS booking fees recovered to 63 percent of 2019 levels in 2022, and we forecast that they will be 75 percent to 85 percent of 2019 levels in 2023,” S&P wrote six months ago.
An attorney for the plaintiff in a lawsuit against parties including Onriva filed a whistleblower tip on the company with the U.S. Securities and Exchange Commission, accused a federal judge of bias and said she would appeal the court’s Oct. 12 decision to dismiss the case with prejudice on jurisdictional grounds.
We’re not legal experts, but it seems safe to say that it’s uncommon for lawyers to attack federal judges as “favoring male and/or white attorneys,” much less name them as defendants. That was all in a day’s work for Reshma Kamath, a California-based attorney for Tanmay Kar, who in April filed suit in the United States District Court for the Northern District Of California against Onriva parent Alinor Holdings, its CEO and three associates for alleged fraud and breaches of contract and fiduciary duty.
Challenged by District Court Judge Yvonne Gonzalez-Roger on procedural and jurisdictional grounds, Kamath twice resubmitted the complaint, most recently in July. In her order last week, Gonzalez-Roger not only upheld a motion to dismiss by the defendants — again reminding the plaintiffs that they could instead file claims in state court — but also moved to sanction Kamath “for violating her professional obligations.” The judge ordered Kamath by next week to explain why she should not be sanctioned.
Kamath’s whistleblower complaint to the SEC, a copy of which was filed in the federal court docket late on Oct. 12, repeated allegations in the July amended federal court complaint. It accused Onriva of fitting the description of a “fraudulent investment scheme, such as a Ponzi scheme.” The SEC document also indicated that a complaint was made to an unidentified law enforcement organization.
On Friday, an attorney for ProfitPay — a company that Onriva targeted for acquisition and which is at the center of the legal turmoil — called the allegations in the lawsuits “baseless.” A separate case in the Superior Court of California, County of Alameda, on behalf of ProfitPay investors is ongoing.
Reaction: Thanks to Norm Rose and Marc Casto for their dialogue on traveler profiles; Scott Gillespie and Jason Kramer for adding insights on regulatory moves related to greenhouse gas emissions from air travel; and all readers who comment on TheCompanyDime.com. Anyone with a registered user account can weigh in.
Notepad
We had a few items remaining in our notebooks from the August Global Business Travel Association convention. Here goes …
Hopper Bounces To Hidey-Hole
We covered Hopper’s plans for corporate travel here and here. This might be the last mention. A small team showed up at the GBTA convention and welcomed travel managers to demo their solution. However, they declined to answer questions or show anything to The Company Dime. That’s not the reason we might not mention them again. It’s because Hopper has since cut 30 percent of its staff. In a development first reported by The Global and Mail of Toronto, the cuts impacted “mainly … experimental products and services Hopper hadn’t launched yet.” That describes Hopper for Business. The web page on promotional materials handed out at GBTA no longer exists.
Cisco Peeps Chat With Bot
For nearly two years, Cisco has provided employees a chatbot to answer questions about travel policy or preferred supplier benefits.
“We realized people don’t want to go to a document and figure out where that info is,” said Cisco senior global procurement service leader for travel and card Carlos Almendros. “So we created a bot allowing travelers to ask the appropriate questions. We’ve been evolving our bot capability to make it more seamless. It’s not perfect; we have a long way to go, but being a tech company, it’s expected of us.”
The firm’s policy, which Almendros called “fluid” and “digitized,” is also integrated with its online booking tool from SAP Concur. Cisco enjoys self-booking tool adoption of more than 90 percent in the United States and more than 70 percent elsewhere. Almendros said the company was looking to integrate its travel and expense policies.
The $52 billion, 80,000-employee networking equipment manufacturer spent $151 million on travel and entertainment in 2022, according to Business Travel News.
EY Adds Corporate Travel To Blockchain Pilot With Winding Tree
Answering a question from the stage during one breakout session about use cases for New Distribution Capability, audience member Nicolas Nelson, EY’s global lodgings and EMEIA developed markets travel M&E leader, dropped some news. He said testing of a blockchain-supported portal for airline bookings had expanded beyond leisure travel to a group of employees for business travel. Plans for the program first emerged in 2021, with American Airlines later named as a participant.
“We started to dip our toes in NDC from a leisure perspective initially,” said Nelson. “We have a connection with AA using Winding Tree technology. [It’s] blockchain-controlled, so we know it’s EY people accessing the rates. We proved the concept through leisure use, and now we have taken it to a small group of about 150 top travelers with American to test the water from a corporate perspective as well. It’s small for us, but it’s a case of building from there and adding other airlines and some hotel content, as well, eventually.”
Unauthorized parties using negotiated rates isn’t a massive issue for air travel, but it’s a problem in car rental and lodging.
‘No Complaints’ As Schreiber Tightens Unused Ticket Policy
When travelers bank unused tickets, employers don’t want them to languish and expire. In many managed programs, these assets eventually go into the corporate pool, and companies leverage preferred supplier relationships to apply the value to tickets for other employees. How long should a traveler have? Companies have a wide range of rules, with 30, 60, 90 and 120 days all mentioned in a recent straw poll by The Company Dime. The timeframe could be pegged to the time of ticketing or expiration. Organizations employ reminders and may give the ticketholder’s department a shot before opening the credit to broader use.
With a roughly $10 million travel program, Schreiber Foods’ unused ticket balance was around $40,000 as of August. “And they aren’t very old because I’m churning them,” said corporate travel manager Julie Van Oss. Without active management, she said, travelers forget about tickets in their profiles, sometimes because their next trip is on a different airline.
“We had the rule where for one year it sits in the profile, but just because that’s the airline’s rule doesn’t mean it has to be our rule,” Van Oss told GBTA attendees. “So we changed it to six months. It went over so well that we moved it to 60 days. We’ve had no complaints even with 60 days.”
GBT’s Marcello Expects More Compliance On Hotel Deals
American Express Global Business Travel’s principal commercial lead for hotels in North America, Nina Marcello, made a bold prediction at GBTA about corporate performance on hotel agreements in 2024.
“This year alone, I’ve done more policy rewrites than any other year,” said Marcello, whose 11-member team handles hotel programs for more than 125 accounts. “People are truly taking a look at their budgets, and they’re not just putting it out there for lip service for when they launch the RFP. They’re redoing policy, putting language in their online booking tools and holding travelers accountable. So those business outcomes, and maybe shorter trips, will be impactful, and that’s good for hoteliers because you will see more adherence to compliance than before and better pickup than what you had before. Having sat on the hotel side, I know hotels never give the [client] numbers much credibility because they tend to come in lower. I think we’re going to be more accurate this year. We’ll talk about it next year and see if I was right.”
Around The Web
• According to an Oct. 16 opinion in The New York Times by Stanford University professor of economics Nicholas Bloom, “The Five-Day Office Week Is Dead.” He described as “shocking” data showing that “only half as many days are spent in the office compared with prepandemic times.” During an earnings conference call with analysts last week, Delta Air Lines execs referenced a correlation between “return-to-office initiatives” and “continued improvement” in corporate travel demand. Corporate “comes back and then plateaus, comes back and plateaus,” said Delta CEO Ed Bastian. “And I think you’ll see another wave of return. I think a lot of it’s being driven by the return to office and getting into the new normal work patterns, which many companies are still sorting out for themselves.” He suggested corporate travel growth was a “distinguishing factor” between Delta and the airlines “at the other end of the fare spectrum.”
• This August report in The Wall Street Journal highlights the spread of fees for early check-ins and late checkouts beyond casino hotels. Hospitality leaders told the paper that the fees helped them manage high occupancies and were not a moneymaker since they only helped offset additional labor expenses.
• The Economist last month treated subscribers to an update on quality and civility, or lack thereof, in customer service via this article titled, “Customer service is getting worse — and so are customers.” The piece notes that while the pandemic brought greater attention to the issue, the American Customer Satisfaction Index started falling in 2018. “Increased concentration in industries from airlines and banking to telecoms could be a factor, insofar as market power weakens the will of companies to invest in pleasing their clients,” wrote The Economist. “Much of the consolidation in these and other industries, however, occurred before or during the period in which customer satisfaction was improving. Technology may be a bigger part of the problem. Besides dropped calls, the most common irritation in customer-service interactions is being stuck with a chatbot, according to research from Genesys, a maker of contact-center software.” The piece concludes with an unanswered question: Will generative AI, either on its own or in combination with customer service personnel, remedy the situation?
Here’s a page where we pull in business travel news feeds from around the web.
Pithy Wisdom
“With NDC, there’s a lot of denial, anger and blame. I’m all the way to problem-solving. I believe everyone is doing the best they can. We can’t forget the annihilation Covid had on TMCs. Let’s give everyone grace. The time is now; the reality is there. Content will be there if the ecosystem pulls together.”
Sabre VP of product management Kathy Morgan, during a June interview
