Technology powers Sabre to the top of the travel and tourism industry. The company provides software and services to connect travel suppliers -- such as airlines, hotels, car rental brands, rail carriers, cruise lines, and tour operators -- with travel buyers through one central marketplace. Sabre Travel Network is used by more than 400,000 travel professionals globally to book airline tickets, rental cars, hotel rooms, and vacation packages. The company also provides software, e-business tools, and consulting services to improve the operations of air carriers, airports, and hotels through Sabre Airline and Hospitality Solutions. Sabre sold its Travelocity.com holding just a year after going public in 2014.
In January 2014, the company initially filed to raise around $100 million, but it ended up raising about $627 million. Sabre planned to use the proceeds to pay down debt.
Sabre operates two main business segments: Travel Network and Airlines and Hospitality Solutions. The Travel Network division, which generated 70% of the company's total revenue in 2014, is the global business-to-business travel marketplace that connects travel suppliers (including airlines, hotels, car rental brands, rail carriers, cruise lines and tour operators) to a large network of travel buyers (such as online and offline travel agencies, travel management companies, and corporate travel departments).
The Airlines and Hospitality Solutions segment, which made up 30% of total revenue in 2014, provides software technology products and services through software-as-as-service (SaaS) and hosted delivery models to airlines, hotel properties, and other travel suppliers.
Within this segment, the Airlines Solutions business provides software to help airline travelers through three channels: its reservation system, the SabreSonic Customer Sales & Service (SabreSonic CSS); Sabre AirVision Marketing & Planning, which helps commercial airlines improve profitability and develop their brand; and Sabre AirCenter Enterprise Solutions, which drives operational effectiveness between planning and management of airline, airport, and customer operations. Sabre's Hospitality Solutions business provides software to some 20,000 hotel properties around the world. Its products and services include the SynXis central reservation system (CRS); property management services through Sabre Property Management System (PMS); and marketing and consulting services designed to optimize distribution and marketing.
Sales and Marketing
Sabre spent $17 million on advertising in 2014, compared to $16 million and $17 million in 2013 and 2012, respectively.
Sabre operates its business in 60 countries. Besides the worldwide headquarters in Southlake, Texas, Sabre has head offices in London and Singapore. Sabre also maintains half a dozen global development centers in the US, Argentina, Poland, India, Uruguay, and the Philippines. Some 20 Customer Care Centers, where most of the direct contact with clients takes place, are located in North America, South America, Europe, the Middle East, and India. It has IT development centers in India, Poland, the US, and Argentina.
Sabre has struggled to push its annual revenues much above the $3 billion mark in recent years, though its profits have been growing since 2012 as it has sold off some of its online travel agency holdings.
The company's revenue declined by nearly 14% to $2.63 billion in 2014, mostly because of lost revenue from its recently-sold online travel agency businesses. The company's two reportable segments, however, both grew for the year. The Airline and Hospitality Solutions segment grew by double digits, mostly thanks to increased SabreSonic CSS revenue as its passengers boarded increased by 7% to 511 million for the year, driven by existing customer business growth and because the segment extended a contract with a significant customer, adding another $19 million to the top-line. The Travel Network segment also generated 2% higher revenue thanks to higher transaction-based revenue from an 8 million (or 2%) increase in Direct Billable Bookings.
Sabre's net income spiked to $69.22 million in 2014 (compared to a loss of $100-plus million in 2013) thanks to higher reportable segment revenue and thanks to its income from its discontinued operations (including Travelocity and last-minute.com). Cash from operations also jumped thanks to higher cash earnings.
Sabre's growth strategy includes developing innovative technology products; geographically expanding into high-growth markets in Europe, the Asia Pacific, and Latin America; pursuing new travel supplier and Airlines Solutions customers either through acquisitions or on its own; and strengthening its relationships with existing customers through strategic cross-selling of products and services.
Sabre has also exited the online travel agency business to free up resources and focus on growth opportunities in the company's Airline and Hospitality Solutions and Travel Network segments. In early 2015, the company sold its well-known Travelocity.com business to rival Expedia for $280 million, netting a gain of $141 million on the sale. In late 2014, Sabre sold lastminute.com (the European division of Travelocity) to Bravofly Rumbo Group, and also sold its business-to-business private white label website offering Travel Partner Network to net $10 million in proceeds.
To expand its product lines, Sabre launched three new data products on the heels of its IPO in 2014. The new products were geared toward airlines, hotels, and corporations, and help these customers use the data they already have to create operational opportunities and generate new revenue.
Mergers and Acquisitions
In 2014, Sabre purchased Genares Worldwide Reservation Services, a global, privately-held hospitality technology company, which added some 2,300 independent and chain hotel properties to Hospitality Solutions' portfolio.
In late 2012, subsidiary Sabre Airline Solutions purchased airline CRM company PRISM Group. The new unit focuses on helping airlines get the most from their corporate customer contracts by using historical traffic pattern analysis. PRISM's services will join Sabre's existing commercial planning suite.