Mon Mar 2: NEW YORK (Reuters) - The U.S. recession presents a strong headwind to the travel industry, especially for business travel, which is declining more rapidly than leisure, the chief executives of two online travel agencies said on Monday.
Speaking at the Reuters Travel and Leisure Summit in New York, Priceline.com Chief Executive Jeffery Boyd and Orbitz Worldwide CEO Barney Harford said separately they are seeing pressure on business travel bookings as companies look for quick ways to cut costs.
"There´s been a more rapid downturn in business travel than leisure travel," Boyd said.
Boyd linked the decline in business travel, in part, to efforts by executives to avoid criticism that they are wasting company money on unnecessary travel. He said complaints by politicians about expensive corporate travel is putting additional and unfair pressure on the struggling industry.
Boyd said that while no one is pleased with the current state of the economy, the downturn gives travel agencies a chance to court bargain-hungry travelers with cheap bookings and creative travel package deals.
The three publicly traded U.S. online travel agencies -- Priceline, Expedia Inc and Orbitz Worldwide Inc -- posted mixed results for the fourth quarter. Only Priceline saw the total value of its bookings rise.
The CEOs did not predict an end to the current downturn for the travel industry. But other experts have said it will not end this year.
"I could see well into 2010 having a very sluggish travel and leisure market," Phillip Kleweno, partner at Bain Corporate Renewal Group, said at the summit.
GROWING OVERSEAS
Online travel agencies are racing to expand into international markets as growth in domestic internet bookings plateaus.
Typically, a strong international presence helps blunt the impact of an economic slowdown on travel agencies. But given the global scope of this downturn, the companies are finding it harder to shield themselves.
"The current environment is hitting pretty much everywhere full on," Harford said. Boyd agreed.
This recession is "not like previous recessions where you could see regions that were insulated," he said. "The good news is that in a recovery it should be global in its nature, and international travel will resume and be strong.
He said, however, that strong growth opportunities remain around the globe. Priceline is seeing rapid growth in European markets, that are served by its site Bookings.com.
Harford said he sees "significant opportunity" for growth in the Asia/Pacific region.
