Coronavirus Might Hobble Sabre's Travel Tech Ambitions for Months
Skift Take
Sabre is a bellwether for the global travel industry as a major processor of transactions for airlines and hotels. The picture isn't pretty. But the company looks capable of weathering a delayed resumption in travel.
Recent stay-at-home orders have gutted the travel industry, which drives a majority of the revenue for technology company Sabre. The Southlake, Texas-based company's software-processing revenue comes from helping travel companies sell and market products, process transactions, and manage operations.
The coronavirus pandemic prompted a grisly decline in Sabre's net airline bookings, which declined by 23 percent in February and by 111 percent in March, due to cancellations overtaking new bookings. Sabre has been processing only about 100,000 flight bookings a day compared to the 1.5 million a day it ordinarily handles.
Executives said the company has sufficient liquidity, with a cash balance of $1.7 billion, to cope with continued turmoil.
"We believe our current liquidity is more than sufficient for a year and a half even in a zero booking, no travel scenario," said president and CEO Sean Menke during an earnings call on Friday. Two-thirds of the company's cost structure is variable, which helps provide protection in a prolonged downturn.
The cushion may come in handy. Menke predicted that leisure travel would be more likely to rebound ahead of corporate travel as businesses juggle their responsibilities to maintain the health of their workers and face cost c
