Q&A: Travelport on IPO, Russia, growth plans

Six months after Greg Webb became CEO of Travelport in August 2019, COVID-19 emerged to wreak havoc on the travel industry, bringing many elements of it to a standstill. But Travelport has been plowing ahead with changes, offloading businesses including Locomote and eNett, rebranding the company and launching Travelport+ as a single environment to replace its legacy systems, Galileo, Apollo and Worldspan.

Webb has also rebuilt the C-suite, starting with naming his former Sabre colleague John Elieson as COO. 

Underlying all of these changes is a vision the company describes as “reinventing travel retailing” and positioning Travelport to be “the best multi-source content aggregator in the world.” 

Last week at Travelport’s “Future of Retail” customer event in Dubai, PhocusWire sat down separately with Webb and Elieson to find out more about the company’s plans, including reaction to recent speculation about an IPO, how the company is looking to grow and thoughts on topics including NDC, hospitality and innovation.

The conversations have been edited for brevity.

I think we have to start with the topic of the war in Ukraine. Travelport, along with Sabre and Amadeus, has removed Aeroflot’s fares from its system. How are you evaluating next steps as far as your business in Russia?

Webb: We operate directly in Russia so our first concern was, are all of our employees safe? Secondly we operate through an operator in Ukraine, and we were equally concerned about the employees of our operator. I was shocked and appalled at the actions Russia has taken against Ukraine. It’s horrific. The decision we made is we didn’t want to support any state-owned entity. At the same time, we also didn’t want to hurt the people of Russia or the people of Ukraine by any action we took unilaterally, because it’s clear that this war is not a war of the entire country of Russia; it’s the war of maybe a single man or a small group inside Russia. 

As an example, we’ve tried to support the booking of non-state owned entities, because what we’ve seen is a significant increase in one-way flights out of Russia to other places. We don’t want to keep people from leaving Russia if they are trying to get out. So I think it’s an evolving situation, and we’ll have to continue to monitor the direction this goes. And obviously we’re on the side of humanity, so whatever it takes to help people more broadly, we’re willing to do. 

During her presentation, Travelport CMO Jen Catto talked about a recent survey the company conducted that found consumers still find shopping for travel very complex and frustrating. Part of the solution, she says, is reinventing the PNR into an open system for sharing itinerary data. Tell us more about that idea.

Webb: It’s really a broader topic around the fact this is an industry that has built up, over time, the need to share information. There’s almost no industry in the world that has a need to share information more than travel. If you think about interline agreements, codeshare agreements, the fact that as a traveler when you book a trip the airline knows about their part of it today, the hotel knows about their part of it, the car rental company know about their part, the cruise line potentially knows about their part - but none of them know about all of it. And so there’s a need to be able to share that information across the network.

But today there’s a very intricate structure around how we share information. Some of what’s happened with NDC and the direction we’re going, is pulling away from sharing information. It’s trying to hold information more inside individual networks, which goes against everything else you see on the internet, everything else that you see happening in other evolving industries, which is more about opening up the information-sharing capability of that network.

We tend to believe that over time, because of consumer behavior, the need to be more open with data and more available with the ability for multiple parties to be able to access the same information on the same platform will become more prevalent.

So what does that mean for NDC?

Webb: If NDC delivers on its promise, which was first to be a new standard, a new way to do things, then it could be extraordinarily helpful. Unfortunately, it’s almost the opposite of a standard. It’s been implemented differently by almost every airline that has gone down an NDC path.

If it delivers on the promise that it was supposed to, which is it will allow airlines to better craft offers to the end traveler in a way that’s consumable, bookable and personalizable in a different way so that I get a different offer than you do on the same flight that has benefits I desire as a traveler, I think that’s good. I think that will allow consumers to make better buying choices. But until it delivers on the idea of giving information that allows you to make a better a buying choice, then it’s just adding complexity to the industry.

In the past, accommodation has been seen as a being a big driver of growth for Travelport – is that still the case? 

Webb: We still see hospitality as both an opportunity for Travelport and also where we have a competitive advantage with our rich content and branding platform. We sell experience in the travel industry, and hospitality is probably the one that is most differentiated, in terms of the room, the amenities, the opportunity to cross sell, upsell. 

There’s only so much you can do with an airline seat, but there’s a lot you can do with a hotel room in terms of the experience and I think that will continue to be something we focus on which is allowing hoteliers to optimize their opportunity to sell based on the quality of their offering, and that’s both on the business side and on the leisure side. 

In May 2019, Travelport became a private company – again - this time owned by affiliates of Siris Capital Group and Evergreen Coast Capital Corporation, the private equity affiliate of Elliott Management Corporation. What are the pros and cons of being private versus being public, and is it true you’re now considering an IPO?

Webb: Bloomberg published that but I think they’ve gotten it quite wrong. We’re pretty happy with the capital structure we have today and being privately owned. If at some point it makes sense for Travelport to be back in the public market we will of course look at that as an option.

And I can only say that both Siris Capital and Elliott Capital/Evergreen have been so supportive during the pandemic. During a time when the industry was devastated, it would have been pretty easy for somebody to get really concerned about the future of the business. In their case, they’ve been completely behind it. They believe in the future of Travelport, and they believe in the future of what we are doing and in fact encouraged us to continue to invest in Travelport+, encouraged us to continue to push forward with our rebranding, encouraged us to push forward with our change to our go-to-market structure. So it’s been great being privately owned during the pandemic. At some point, as it makes sense to be back in the public market, we’ll look at that when the time comes.

What would it take to “make sense” to be back in the public market?

Webb: I think it’s as simple as, as we begin to see recovery of the travel industry then we would be able to explain pretty clearly why Travelport as a public company would be very attractive to investors. And at that point of course we’d look at options.

But at this point, the company in total is fundamentally different than when Siris and Elliot took us private. Almost 85% of the management team is new, our go-to-market structure is completely revamped. The underlying culture of the company is dramatically different. We have during the downturn, from the ground up, restructured the company and taken out a significant amount of cost - and improved our performance. So it wasn’t a cost-cutting exercise, it was just we want to operate the company differently, and it’s proven to be very successful.

We’ve picked up a good bit of business during that time period. I think the market at some point will recognize we are a fundamentally different company than we were in 2019 and one they should pay attention to because the future looks very bright. 

John, your role at Travelport is overseeing strategies around growth, sales and mergers and acquisitions. What is your thinking about growing the company?

Elieson: Because of the maturity of our business, meaning there’s so much business in our current portfolio, any growth strategy has to have as its foundation a retention strategy. That was Travelport’s challenge in years gone by. While they continued to win some portion of business that was available, it was the business they were losing that kept them from having a growth trajectory. 

We’ve spend a lot of energy listening to our customers, talking to our customers and shoring up how we interact with our customers, so our retention rates are at an all-time high. That has to be the beginning of growth otherwise you’re just replacing, you’re not really growing. So retention is in a really healthy place. We’d like 100%, but we’re at 98%, so we’re in a good place.

Then secondly you’ve got to win business as it comes up. And we’re winning at a really good click, five times what we lose. So when we got out for bid and compete with our competitors, we are winning and that’s great. And a third way you can grow is with the large side-by-side agencies and making sure those relationships are strong.

The reason all three of these are so important is because retaining business means that we’ve kept our brand promise over time. The side-by-side agencies mean that when compared to our competitors in a dynamic environment, we’re winning. And then when we win new business out in the market that means people believe in our future vision and direction. It’s so important that we be successful in all three of these. That’s a healthy company. 

Beyond the core GDS transactions, are there other ways that Travelport can grow? 

Elieson: You may notice that in our M&A activities, it’s really been divestments. We’ve spent some energy over the last year and a half or so focusing our portfolio. Are some of these businesses really business we should be in? Are they areas that help our customers or have they become distractions? So you’ve seen us move out of several businesses recently. 

And at the same time we are looking for acquisitions that can accelerate on our path to our vision. We’re not looking to change our vision, to have a broader value proposition. We’ve considered it, but so far the answer has been no, the vision is right, let’s stay focused. But where we can find partners that will accelerate the achievement of that vision, we are definitely open-minded to that and continue to be vigilant looking for those opportunities.

As you're thinking about M&A opportunities, what types of solutions interest you the most?

Elieson: Analytics. The fact is we are in an industry that is data rich, rich, rich. We do billions of shopping APIs every week. There’s lots of data. And the companies that can help make sense of it, so we can be better retailers, or service customers better, or even supply better – better at matching supply with demand - there’s a lot of power yet to be unlocked. 

That’s something I’m watching closely through an M&A lens. Who is out there making sense of the massive amounts of data that is out there in the travel industry. It’s central to our vision and it kind of fits all elements of the ecosystem – travelers, bookers, suppliers.

* The reporter's attendance at the event was supported by Travelport.