Just days before Sabre announced its acquisition of Genares, chief executive Tom Klein was speaking at the Deutsche Bank 2014 Technology Conference.
He will no doubt have had hospitality on the brain and, therefore, touched a number of times on the importance of the segment for future overall growth of the business.
Klein describes hospitality as a white space in terms of business potential and an industry which has been ‘under-served and under-invested.’
Sabre isn’t the only company keeping a close watch on the sector with rival Amadeus investing heavily with the acquisition of Newmarket International late last year and more recently Travelport’s purchase of Hotelzon.
Sabre says it has been in the hospitality solutions business for about seven years and has more than 15,000 hotels using its services. Currently, according to Klein, it’s the fastest growing business in the portfolio and it will be a leader.
Hospitality is Sabre’s smallest business according to Klein but he adds from a revenue perspective it already is a leader with more than $100 million last year and as it offers more services, acquires more customers and expands geographically:
“It will have a clear leadership position in hospitality. There is a lot of headway there.”
And, let’s not forget the odd “tuck-in acquisition”.
Currently, about 65% of hospitality revenue comes from North America but the company says it is planning on reversing that as it continues to grow.
So, why so much emphasis on the growth potential for hospitality solutions? Klein spells it out:
“All the research says that hotels in general have refresh cycle going on and are not happy with service providers in the space.”
He adds that some of the ‘most demanding customers in the space’ – the likes of Mandarin Oriental and Morgans Hotel Group – want to use the technology to change the guest experience.
With lots of eggs placed firmly in the hospitality basket, what of other segments of the business?
There is a big focus generally on increasing presence in the EMEA region.
Klein also talks about potential in the airline reservations business with 1.1 billion in ‘passengers boarded up for bid’ over the next several years. Included in that is 220 million boarded passengers already under contract but not implemented.
He also sees growth from airlines outsourcing other areas of their technology such as crew management solutions.
Airline retailing is another area Sabre is watching which could be of ‘significant size’ although, he says, not as big as airline reservations.
There was very little mention of the online travel agency side of the business except to say that the Expedia-Travelocity agreement is ‘meeting or exceeding expectations on almost every metric.’
And finally, the company continues its quest to find a buyer for Lastminute.com which it doesn’t think it should be investing its money in.
