How is Travelport competing against much bigger companies like Sabre and Amadeus? By creating technology solutions its clients actually want to use while expanding in the world's fastest-growing regions for travel.
Travelport may be the smallest of the three major global distribution system providers, but the company’s investments in new technology and markets are paying off, according to the company’s 2017 fiscal year and Q4 2017 financial results.
Travelport’s 2017 revenue increased four percent to $573.5 million, while its net income increased 153 percent to $52.4 million.
The company’s technology services division posted decreased revenue of 12 percent in the fourth quarter largely because Travelport sold its stake in India-based IGT Solutions in April, although business in the division unrelated to IGT Solutions increased by 5 percent.
Travelport’s eNett travel payments division posted a 29 percent increase in revenue in 2017, growing to $194 million. Overall, its travel commerce platform grew revenue by 6 percent last year, with its Beyond Air (non-air) division growing 14 percent.
Longtime Travelport CEO Gordon Wilson told Skift that the company is rapidly approaching its goal of having its non-air revenue represent a third of its overall business by 2020.
“[Clients] have to change the way they do business to start using it, but once they get going they see it being a huge benefit,” said Wilson. “What you’re seeing is that the wrap up of booking more business payments through eNett is accelerating.”
Looking into 2018, Travelport forecasts a 6 percent increase in revenue while earnings before interest, taxes, depreciation, and amortization could come in between a 1 percent decrease to a 3 percent increase.
The company’s global focus will remain a priority this year, with Asia (up 5 percent year-over-year) a major focus, the result of the burgeoning air travel markets in the region.
“The only reason Asia was down [in Q4 2017] was we lost a big account in Australia; we’re growing new customers in markets like India and Indonesia,” said Wilson. “In 2014, India was about 29 percent smaller than Germany as a GDS market. Fast-forward to 2017 and India is 7 percent larger than Germany which makes it the 2nd biggest market besides the U.S. We’re rapidly [looking] to be the leading player in the Indian marketplace.”
Travelport also announced its plans to introduce new distribution capability bookings sometime in 2018 on its global distribution platforms, with an interface for agents coming sometime in the middle of the year. The company has led the way on adopting new distribution capability, although its rivals are catching up.
He mentioned the complexity of changing a booking once its already been made as one of the more complicated issues to deal with. There’s also the reality that each global airline has different priorities and goals when it comes to merchandising.
“For a long time, we’ve been investing in taking content from different sources… this lets us work with more established airlines to work out what content they want to serve via the API and what they want to serve via ATPCO,” said Wilson. “We’re working out how to effectively operate and display the same kind of content so they can determine which is the best offer to meet the needs of their client. Sometimes one may be more right for the client than another. Not all the airlines have got all the functionality they need under their API done yet.”
Photo credit: Travelport CEO Gordon Wilson was in high spirits when his company debuted on the public markets in New York in 2014. Can he guide the company through an upcoming era of technological change? Travelport