It might be tempting to suggest that Gordon Wilson is downplaying the importance of GDS market share because, as CEO of Travelport, he runs the GDS with the smallest share of the three major companies.
But while market share is important, particularly as a marketing tool, it is not the only metric that CEOs should be watching
It may be a handy metric to measure, but it is subject to a few external factors that are not immediately obvious.
At Travelport’s 2017 Investor Day in New York, Wilson stated that the company expected to increase its GDS market share by 1% to 2% through 2020.
An analyst challenged that assertion, asking, how investors could have confidence in such a prediction.
Wilson noted that market share is fluid, and it can represent more than a few factors.
“First we have consistently grown market share in certain rings around the world, such as Latin America and Asia-Pacific,” he said.
“If you are in a market that is growing particularly rapidly, such as India or Asia Pacific, your market share will grow faster.” For example, he said, Travelport has “this huge position” in key growth markets like India.
“You have to bear in mind that market share moves between GDSs for a variety of reasons,” he said. In India, the phenomenal growth of the traveling public has contributed to Travelport’s share.
“We haven’t done anything, we’ve just ridden the tide of that particular market.”
The second factor to take into consideration is the health of the GDS’ airline customers.
“If your customers are growing faster than the market, your share will grow,” Wilson said.
And, of course, GDSs win accounts and lose accounts all the time.
“We now feel that in certain key markets we’ve got some real traction where we are growing fast, particularly in Asia and America,” he said.
“We have some of the faster growing customers in the marketplace.”
Another analyst questioned Travelport’s commitment to putting revenue back into the company.
Bernard Bot, chief financial officer, noted that the company has “invested $700 million in our technology platform, more than twice as much as our nearest competitor, over the last five years, and more than half of that goes to innovation.”
The analyst suggested, “How about taking the foot off the spending pedal?”
Wilson responded quickly: “We’re a technology company, and you have to feed the beast,” he said.
“The minute we stop innovating we’ll go backward, We were there when we were owned by a private equity company. We’re not going back to that.”
NB: Tape measure image via BigStock.