Travelport eyeing Beyond Air as key element for the future

Almost a fifth of Travelport revenue is now coming from non-air (or "Beyond Air", as it now calls it) activities - indicating what the company hopes will be an ongoing shift away from "traditional" services.

The now 18% share of overall revenue has climbed from 14% two years ago, CEO and president Gordon Wilson disclosed during Travelport's latest earnings this week (Q3 2013).

Wilson will not put a figure on the expected rate of the growth over the next few years, but says the "pace will accelerate" as tools such as its agency desktop accommodation search service Rooms and More become a key part of the business.

Sitting alongside hospitality products is the increasingly important eNett virtual payment service of which Travelport is a co-owner, a brand which has been highlighted more often in Travelport earnings interviews during 2013.

No hard figures, but the service posted a record quarter in the three months ending September 31 2013, Wilson says.

Elsewhere, adjusted EBITDA for Q3 increased by 5% from $123 million to $128 million year-on-year, as net revenue also showed growth of the same rate from $489 million to $511 million.

In the year-to-date, net revenue is up 3% to £1.596 billion y/y, with adjusted EBITDA down 6% to $408 million over the same period. Travelport's overall debt stands at some $3.3 billion.

So, how does Wilson and Travelport hope to increase the Beyond Air share?

Growing the Rooms and More business in terms of the number of hotels on the system (and the aggregators providing the bookings) will no doubt continue behind the 525,000 individual properties.

But with the Rooms & More accommodation search platform now up and running for a number of years (following the acquisition of the Sprice metasearch engine to essentially become the tech behind it), its core functionality is in place to extend it into other products for Travelport's agent customers.

Services such as travel insurance and cruise are obviously on the table, but equally Travelport is eyeing how the airline end of its business has evolved in recent years and thinking how similar opportunities might arrive.

Wilson says merchandising content and product (spas, meals, extras, activities, etc) from hotels will be an important element going forward for Travelport, its agency customers and, of course, hoteliers.

As the company is attempting to do so on the air side of the business, Wilson says "we can help them realise their strategy with ancillaries".

For all the talk of so-called Beyond Air activities, Wilson is keen to stress the company will not take its eye off the core business of distribution.

In terms of the next few years, he says the "quality and nature [of the distribution services] will be significantly enhanced".