The Spanish travel technology firm, advised by Evercore, is poised to appoint a couple of banks as global coordinators alongside Morgan Stanley after recently inviting pitches, said the people, who spoke on the condition of anonymity.
The company and its shareholders - which include private equity funds Cinven and EQT, as well as Canadian pension plan CPP Investments - are leaning towards Madrid as their preferred listing venue, one of them said.
Cinven, CPP Investments, EQT, Evercore and Morgan Stanley declined to comment. Hotelbeds did not immediately respond to a request for comment.
Deliberations are still preliminary, and plans may still be altered or dropped, the people cautioned.
Hotelbeds' shareholders had been considering a private sale as an alternative to an IPO, the people said.
The listing plans highlight improving investor sentiment towards new stocks after months of muted activity. Should it list in Spain, Hotelbeds' would be one of the largest IPOs the country has seen in recent years.
Majorca-based Hotelbeds offers travel agencies, airlines and tour operators access to hotel rooms worldwide in what it describes as a "bedbank".
The tourism industry has seen a rebound since governments lifted travel restrictions following the COVID-19 pandemic.
Hotelbeds said it had its best fortnight ever in booking revenue earlier this year, recording a booking per second at peak times.
($1 = 0.9352 euros)
(Reporting by Andres Gonzalez and Pablo Mayo Cerqueiro in London; Editing by Anousha Sakoui and Nick Zieminski)
By Andres Gonzalez and Pablo Mayo Cerqueiro