Sabre to Boost Its Travel Tech Investment by $150 Million This Year
Skift Take
Sabre CEO Sean Menke is right to highlight the progress his business has made during the three years since he took the top job. He's also right to insist the company needs to invest more in tech to keep up with the travel industry's pace of digital change. But will investors be patient?
Sabre said Wednesday it was willing to shoulder heavier costs in an effort to keep the travel technology giant's growth machine churning. That will include boosting its annualized expenditure on technology by $150 million this year, with likely additional incremental spending in the next few years.
CEO Sean Menke said Sabre is working on a stable of long-term investments that may overshadow short-term results, following the release of fiscal fourth-quarter and full-year results that fell short of some investor expectations.
Menke had an unusually long call with investment analysts on Wednesday to try to explain why the technology expenditure will drive long-term growth, despite potentially squeezing operating income in the short term.
"This will lead to a much more profitable company," Menke said.
Operating income last year was $363.4 million, versus $562.0 million in 2018, and increased technology expenditure was a key factor.
In the fourth quarter, Sabre booked $941.4 million in revenue. It reported $10.1 million in net income, a measure of profit.
For the full year of 2019, Sabre booked $3.975 billion in revenue and $158.6 million in net income.
Advances on Multiple Fronts
Since October, Sabre has announced several ini
