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Airline hikes to trigger travel cutbacks?
Expedia Corporate Travel has seen no evidence of a reduction in client travel, despite recent economic concerns, but rising airfares spurred by capacity cuts and consolidation could trigger such cutbacks.
So said Dara Khosrowshahit, president and CEO of ECT parent Expedia Inc. in a fourth-quarter investor call.
During the quarter, Expedia’s overall gross bookings increased 25% compared with the fourth quarter of 2006. For full year 2007, other bookings increased 28% and total Expedia gross bookings increased 16%.
While “air travel continues to be fairly robust,” Mr Khosrowshahi said higher airfares shouldn’t impact until 2009, due to existing carrier contracts and the lengthy regulatory approval process that would precede any airline consolidation.
“From a long-term perspective, we would expect to see further discipline as far as capacity goes,” said Mr Khosrowshahi, who added that worldwide airfares increased 9% on average in 2007, including an 8% increase in North America.
In 2008, the company plans to provide more European hotel content, especially for smaller cities and towns, and further develop its new technology platform.
Report by David Wilkening
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