Sabre reports results from its 'transitional' year

Last year was “transitional” for Sabre Corp., according to chief executive officer Sean Menke, and “we began this year in a much better position.”

Sabre Red success

The new version of Sabre Red Workspace, the company’s travel agency desktop, was rolled out to several major customers, including American Express Travel and Lifestyle Services. Because the desktop is so intuitive, Menke said, training time for agents has been greatly reduced. Using the older system, new agents needed two to four years to reach the competency level of an experienced front-line agent. The new workspace cuts the time to two to four months.

NDC strategy

Sabre has come a long way from the days when it fought tooth and nail to prevent IATA’s New Distribution Capability from taking hold. Menke, who came to the company with a fresh perspective, said:

He said Sabre was just granted NDC Level 3-capable status as an IT provider and is on track to reach Level 3 as an aggregator this year. Agents are looking to Sabre to provide an NDC-compliant workflow, he added.

Global bookings up

Bookings through the Sabre GDS were up in all regions in the fourth quarter, although North America, Sabre’s largest market, lagged with a paltry 0.3% increase. But the Asia-Pacific region picked up the slack with 12.5% growth, followed by 5.3% growth in Latin America and 3.9% in EMEA. Overall, bookings increased 3.7% in the quarter. For the full year, the numbers were 9.8% in EMEA, 7.9% in Asia-Pacific, 1.7% growth in Latin America and 1% in North America. Global growth was 3.8%. Sabre’s market share at the end of the year was 36.3%, down from 37.1% in 2016.

Splitting solutions

If you’ve got it, flaunt it, and that’s what Sabre wants to do with its Hospitality Solutions business. Beginning with the first quarter earnings, it will report Hospitality Solutions and Airline Solutions results separately to give its shining star its due. Combined, the two units’ revenue was up 5.4% for the year. But Hospitality Solutions revenue was up 15%, while Airline Solutions revenue showed a 2.7% increase. The hospitality side is riding high with the migration of Wyndham properties, which represent several brands to Sabre’s SynXis reservations system and a custom-built property management system. The time is right for the split, chief financial officer Rick Simonson said.

The airline side took a big hit from Southwest Airlines’ switch from a Sabre-managed passenger services system to Amadeus’ Altéa system. But the Sabre executives said Airline Solutions also needed some housecleaning. Menke said:

That affected reliability, caused confusion and raised a host of other issues, he said.

The future of the GDS model

The drive to upend the airline distribution model is largely a European phenomenon, Menke said.

Three airline groups – Lufthansa Group, Air France-KLM and IAG – are imposing surcharges on GDS bookings. But while “EMEA wants change, North America is stable,” Menke said.