Traveler Values and Communication Habits in a Post-App World Sponsored This content is created collaboratively with one of our sponsors.
Travelocity was once the darling in Sabre’s portfolio, and now the fastest-rising star is its hospitality solutions business. It has plenty of room to grow, particularly in EMEA and APAC, where chains do not dominate and there is so much need for advanced technology solutions.
Travelocity parent Sabre’s smallest and fastest-growing business is its Sabre Hospitality Solutions business, and the company is betting on big changes at major hotel chains, a segment it has yet to penetrate in a meaningful way, to carry the business forward over the next few years.
Sabre CEO Tom Klein says many of the top 20 hotel chains use outdated, in-house technology, and they are all talking to vendors or otherwise exploring ways to change their systems because they need to interact with guests in new ways.
Among those changes, Marriott implemented mobile check-ins for rewards program members, and Four Seasons is scurrying to get more digitally adept, for example.
Sabre is actively seeking to win and expand its business with these chains, including Wyndham Worldwide, where about 5,000 of its properties use the Sabre central reservations systems, said Klein in a presentation May 30 at the Sanford C. Bernstein Thirtieth Annual Strategic Decisions Conference 2014.
Sabre got into the hospitality business around four years ago with the thesis that the industry was under-served and under-invested, officials say.
The company claims to have the largest market share in central reservations systems — about 26% of hotels that were distributed through a global distribution system in 2012 — as it competes in the CRS and property management system markets against companies, including MICROS, Travelclick, Pegasus Solutions and Trust International.
Sabre is currently focusing on growth in the EMEA and APAC regions as it strikes deals with resellers and adds sales personnel.
There is plenty of room for Sabre Hospitality Solutions to grow in these regions, which currently account for about 30% of its more than $100 million in hospitality revenue.
Klein says Sabre has some 2,000 hotel customers in Asia, and especially likes the “long-tail of independents” in EMEA and APAC.
So even if the large chains don’t sign up with Sabre, there is plenty of new business to win.
Sabre is investing in hospitality and will add products to its portfolio “organically and through acquisition,” Klein says.
Klein argues that Sabre is poised to take market share away from competitors who haven’t invested in their products.
For example, Sabre is believed to have taken significant market share away from Pegasus Solutions over the last few years.
In other news, Sabre CFO Rick Simonson again raised the possibility that Expedia Inc. could acquire Travelocity North America.
In response to a question about Sabre’s debt, Simonson said if Expedia exercises its call option to acquire Travelocity North America, then Sabre would receive “fair market value” for the sale, and could use that money to pay down debt.