Sabre GDS Biz: Lagging Behind Expectations

After a lackluster first half of the year, Sabre Travel Network’s booking activity picked up over the summer, culminating in segment growth of 3.1% and revenue growth of 3.7% in the third quarter.

But it is “still lagging our expectations,” Sabre Corp. president and chief executive officer Tom Klein said.  
 
The continuing weakness of Venezuela’s air travel market, traditionally a strong producer for Sabre, offset the improvements in North America and Europe, Middle East and Africa bookings, he said.

“As we exited the third quarter, bookings growth at Travel Network has been somewhat soft,” Klein said.

“We now expect full-year bookings growth to be at or slightly below the lower end of our [predicted] 2.5% to 3% range.”

Market share dipped slightly, to 36.1%, not due to a loss of customers but to regional declines in bookings, he said.

Better news
There were, however, bright spots for the company’s GDS business.

“We have a history of outpacing our competition in new travel agency customer wins and since the start of last year we far outpaced our competition through the addition of new agencies, adding 65 new customers globally over that period,” Klein said.

That was more new agencies “than both of our competitors combined” added during the same period, he said.

Sabre Travel Network also added more than 50,000 European hotels through a new deal with HRS, a large corporate hotel booking service based in Germany. Seven new airlines and two rail companies joined the network.

“We are working with nearly 100 airlines worldwide to enable them to market and sell their ancillaries and branded fares in our travel marketplace, providing carriers a high-yielding sales channel through personalized travel,” Klein said.

In addition, the company’s airline and hotel solutions business did very well during the quarter, he said.

Sabre Corp. reported third-quarter net profit of $36.5 million, up from $5.3 million a year ago, on revenues of $756 million, down from $775 million.

The revenue decline was due largely to the reorganization of Travelocity.