Travelport Files for IPO

Travelport filed a registration statement with the Securities and Exchange Commission (SEC) for an initial public offering (IPO).

The number of shares to be offered and their price range have not yet been determined, but the IPO could raise up to $100 million.

In its filing, Travelport cited its Merchandising Platform and its Beyond Air initiatives, such as the eNett International payment system and its Travelport Rooms and More hotel portal as major strengths.

A different path
The company also noted that it’s taking a different path from Amadeus and Sabre, which operate the first- and second-place passenger services systems in the world and have substantial hotel IT units.

“We have chosen not to focus our resources on more capital and labor intensive airline and hospitality related IT solutions,” Travelport said.

“Instead, we focus on distribution products and payment-related solutions. Our ability to offer differentiated, high-value products and services allows us to shift the focus of our dialogue with travel providers from price to value, leading to higher RevPas,” a metric the company defines as average transaction processing revenue divided by the number of segments.

Travelport claimed to have “the largest inventory of hotel properties on any travel platform in the world.” Its strategy to grow in hospitality distribution is also focused on delivering corporate access to aggregated hotel content, it said.

Risk factors
Among the long litany of risk factors included in any IPO registration statement, Travelport cited “recent trends towards disintermediation in the global travel industry” that could adversely affect its GDS business.

“For example, airlines have made some of their offerings unavailable to unrelated distributors or made them available only in exchange for lower distribution fees,” it said.

Travelport said it accounted for 26% of global GDS-processed air segments in 2013.

Sabre claimed a 36% share in its registration statement for its April IPO. Amadeus said its share is currently 39.9%. The companies calculate their shares of the market a bit differently.

‘Geographically balanced’
Travelport said it believes it is “the most geographically balanced participant in the travel distribution industry.”

The company said that in 2013, it generated $1.95 million in GDS revenue, of which 68% is international: 19% from Asia Pacific, 30% from Europe, 4% from Latin America and Canada and 14% from the Middle East and Africa. The U.S. accounts for 32%.

Travelport had planned an IPO in London in 2010 but dropped it citing unfavorable market conditions.