Orbitz 2013 Annual Report Download - page 15

15
Travelport has a divergent interest from us. In recognition of the fact that Travelport’s interests may differ from ours, our Audit
Committee, in accordance with applicable listing and regulatory requirements and principles of good corporate governance,
takes an active role in reviewing and approving any agreement involving more than $120,000 of payments or receipts in which
Travelport (or any other related party) has an interest, including the New Travelport GDS Service Agreement entered into on
February 4, 2014.
Disruptions or prolonged declines in travel volume, particularly air travel, could adversely affect our business, financial
condition and results of operations.
Our revenue is derived from the worldwide travel industry and is directly related to the overall level of travel activity,
particularly air travel and hotel volume. Therefore, our revenue is significantly impacted by declines in or disruptions to travel
in the United States, Europe and the Asia Pacific region due to factors entirely outside of our control. Factors that could affect
travel activity and materially adversely impact our results of operations, business and revenue include:
• deterioration, weakness or uncertainty in the global economy;
• global security issues, political instability, acts or threats of terrorism, regional hostilities or war, and other political
issues that could adversely affect travel volume in our key regions;
• health-related concerns, such as epidemics or pandemics;
• natural disasters, such as hurricanes, volcanic eruptions, earthquakes, tsunamis, floods and droughts;
• severe weather conditions, or unusual or unpredictable weather patterns;
• the financial condition of suppliers, particularly those in the airline and hotel industry, and the impact of their
financial condition on the cost and availability of air travel and hotel rooms;
• changes in airline distribution policies or increases in airfares;
• changes to regulations governing the airline and travel industry or the imposition of taxes or surcharges by regulatory
authorities;
• an increase in fuel prices affecting travel;
• work stoppages or labor unrest at any of the major airlines, airports or major hotel chains;
• travel-related accidents or safety concerns;
• increased airport security that could reduce the convenience of air travel;
• changes in occupancy and room rates achieved by hotels; and
• travelers’ perceptions of the occurrence of or the scope, severity and timing of the factors described above.
If there is a prolonged substantial decrease in travel volumes, particularly for air travel and hotel stays, for these or any
other reasons, it would have an adverse impact on our business, financial condition and results of operations.
The travel industry is highly competitive and we may not be able to effectively compete in the future.
We operate in the highly competitive travel industry. Our success depends upon our ability to compete effectively against
numerous established and emerging competitors, including other OTCs, traditional offline travel companies, suppliers, travel
research companies, search engines and meta-search companies, which may have significantly greater financial, marketing,
personnel and other resources than we have. Factors affecting our competitive success include price, availability of travel
products, ability to package travel products across multiple suppliers, brand recognition, customer service and customer care,
fees charged to customers, ease of use, accessibility, reliability and innovation. If we are not able to compete effectively against
our competitors, our business and results of operations may be adversely affected.
Online travel agencies: We face significant competition from other online travel agencies, such as Priceline, Expedia,
Travelocity, and their related brands, as well as other regional competitors such as Ctrip in China and Odigeo in Europe. We
compete with offline travel agencies for both travelers and the acquisition and retention of supply.
Travel suppliers: Suppliers have increasingly focused on distributing their products through their own websites and
driving consumers away from OTCs. Suppliers may offer advantages for customers to book directly, such as member-only
fares, bonus miles or loyalty points, which could make their offerings more attractive to customers. Some low-cost airlines
distribute their online supply exclusively through their own website and other carriers have attempted to drive customers to
book directly on their websites by eliminating or limiting sales of certain airline tickets through third-party distributors. Our
results of operations could be negatively affected by such increased competitive pressure from suppliers.
Search engines: We also face increasing competition from search engines like Google, Bing and Yahoo!. Search engines
have grown in popularity and may offer comprehensive travel planning or shopping capabilities, which may drive more traffic
directly to the websites of suppliers or competitors. Google has increased its focus on appealing to travel customers through its