Sabre has reported mid-single digit revenue growth across all three business units – Travel Network, Airline Solutions, Hospitality Solutions – in the first three months of the year.
CEO Sam Menke said in the earnings release that: Sabre’s “cloud-first, microservices-enabled technology strategy is resonating with customers”; that its “accelerated innovations are delivering appreciable value” ; and that “the macro global travel environment in the first quarter was supportive.”
The distribution side of Sabre remains the largest part of the business, and in the first three months of 2018 lifted revenues by 8.1% compared with Q1 2017 to $721 million.
Bookings were up 5.7% to 151 million with APAC the star performer in percentage terms, up by 19.7% compared with the same period last year. Bookings from EMEA, North America and Latin & Central America were up by 3%, 0.7% and 1.5% respectively.
The 151 million Travel Network bookings is broken down into 135 million air bookings – up 5.7% – and 16 million lodging, ground and sea bookings – up 5.5%.
On the call with analysts, Menke and CFO Rick Simonson noted the “completion of the Flight Centre migration in Asia-Pacific” as one of the drivers, describing APAC as a “higher value region.”
It also announced that it has signed a GDS deal with fast-growing Lion Air, the second largest low-cost carrier in the region. The tie-up includes “GDS exclusivity” in Lion’s home market of Indonesia.
Airline Solutions revenues for the three months were up 6.7% to $207 million. The number of passengers boarded was actually down by 11.7% to 175 million, although Sabre added a line to the slide in the presentation, talking up a “5.6% passengers boarded growth on a consistent carrier basis.” The drop was attributed to “the midyear 2017 roll-off of Southwest…”
Existing customers such as Etihad, Air China and Virgin Australia all signed up for more Sabre services, while the first phase of the SabreSonic reservation system implementation at LATAM went well, with completion expected “mid year.”
Menke, who has a strong airline background, said that he was feeling “really good” about the Airline Solutions business. He explained how “microservices” are feeding into the development of the product set, and the benefits that accrue from Sabre’s ability to target and improve specific components of its PSS functionality rather than have to prepare big releases
Revenues here were up 5.8% to $68 million with execs talking up the growth in central reservations system transactions which came in at just under 17 million. A downside to the numbers was a drop in project-based digital marketing services revenue. This was explained as an episodic revenue stream, a complementary but not core part of the hospitality set-up.
During the quarter it continued adding Wyndham brands to SynXis and also won Next Hotels & Resorts and Laila Hotels & Resorts. It is confident that it can service not only large global enterprise brands but also independent hoteliers.
Elsewhere, Sabre also talked about its move to a cloud-first infrastructure, and its new multiyear agreement with Amazon Web Services (AWS), which is one of its cloud partners. Menke noted that some parts of Sabre are already hosted by AWS and reminded analysts about the “preferred pricing” of this deal and the overall cost reduction benefits that Sabre gets from the shift away from its own data centres and onto the cloud.
Click here for Sabre’s IR events and presentations page from where the Q1 release, the presentation and earnings call webcast can be accessed.
(Article is originally published by Tnooz)