Berlin, Germany, March 17, 2021 / TRAVELINDEX / Weathering many crises over the decades, travel has always proved resilient, and the industry now has the opportunity to come out of the COVID-19 crisis stronger. Technology will play a major role in facilitating recovery, ushering in a new era of personalised travel that will present more opportunities for businesses and a better experience for travellers. In a conversation with Lea Jordan at ITB Berlin, Sabre CEO Sean Menke outlined how he set up Sabre to enable change beyond the pandemic.
2020 was game-changing – it presented the greatest challenge ever faced in the travel industry, with global air and hotel bookings down more than in any previous year. As a leading technology provider to the global travel industry, Sabre has had a front row seat, with insight into global trends and data as events unfolded.
As the impact of the COVID-19 virus spread, Sabre took quick and decisive actions to improve its resilience, taking measures such as reducing fixed costs, raising additional liquidity, and introducing a flexible “work from anywhere” program. These actions allowed the team to focus on the day-to-day business in 2021 and 2022.
“We also had to focus on our customers – many of them around the world were facing the headwinds that we were dealing with and we needed to help them work through what was taking place,” said Menke. “While we are still managing through the crisis, there is a group of us at Sabre that is very focused on our evolution beyond COVID-19. We believe that the initiatives we have been able to set up through 2020 and are continuing to work on now will enable us to reshape travel in the years and decades to come.”
Despite the headwinds of 2020, Sabre recorded some major achievements. The Company advanced its technology transformation and modernization which included the continuing migration of its technology to Google Cloud. On the hospitality IT side, the Company signed key commercial wins and renewals in 2020 with major players like All-Inclusive by Marriott and Louvre Hotels. Sabre also extended distribution agreements with some of its largest airline customers, among them Southwest Airlines and Lufthansa Group.
The evolution of consumer demands
We are operating in a highly digitalized world and that has only accelerated with the events that unfolded over the last year. Consumer expectations are continuing to evolve based on the ever-changing situation and the demand for tools and capabilities in areas such as self-service has grown significantly.
The demand for personalization also continues to increase. Consumers expect that retailers personalize offerings around them as individuals. They demand choice when developing their journey and this greatly influences the way in which they shop and compare offer. Sabre wants to enable intelligent retailing by providing the technology that allows its customers to create unique, relevant and appealing offers and distribute them through multiple channels.
Menke highlighted that whilst revenue generation and cost efficiency remain important to customers, they are also focused on the brand promise that they put out in creating and delivering those unique offers. Providing guests with a transparent, trustworthy, seamless, and enjoyable experience is key.
Key focus areas to help the industry to overcome the crisis
Early last year Sabre introduced a set of strategic initiatives to set the Company up for success. Despite the dramatically different market environment, these priorities haven’t changed. They are still essential for allowing Sabre to shape how people experience travel in the future and help the industry overcome the crisis.
- The first initiative is around the consumer demand for a personalized experience, focusing on IT capabilities, processes and intelligence to enable intelligent retailing.
A key element of this is Sabre’s long-term partnership with Google. The first result of this collaboration was Sabre Travel AI, which leverages AI and machine learning tools to analyze and predict consumer behaviors. By delivering the right offer, at the right time across all relevant channels, customers are positioned to deliver tailored personalization to travelers that should drive higher conversion rates and build traveler loyalty.
The first solution powered by this capability is the Smart Retail Engine: employing a data-driven, AI-supported test-and-learn approach, it allows Sabre’s customers to deliver personalized, dynamically priced offers to their customers.
- The second initiative concerns the future of distribution. Sabre wants to enable airlines to distribute personalized offers through its GDS marketplace and through their direct channels. The Company is actively engaged with leading airlines to develop sustainable models that work for airlines, agencies, Sabre, and ultimately, the traveler. Forward-thinking agreements with Southwest or Lufthansa Group are an example of this approach.
- With the third initiative Sabre focuses on the low-cost carrier market – working to create more ways for LCCs to retail and distribute content. With their relatively lean cost structure and their reliance on domestic and intra-regional routes, LCCs are recovering faster from the crisis, making this initiative especially important.
- With the fourth priority Sabre wants to strengthen its hospitality IT solutions portfolio by growing our CRS business and adding full-service capabilities to our property management system.
- Finally, Sabre is continuing its tech transformation. Here again the partnership with Google is very important.
“Long term we believe that travel will continue to be a growth industry,” concluded Menke. “Over the last 50 years there have only been six calendar years in which global passenger volume declined, and the maximum decline was less than two percent – even factoring in previous obstacles to growth like the 9/11 attacks, SARS or the 2008 financial collapse. “
“While no one can predict exactly what future travel will look like, especially on the other side of this pandemic, I am certain that travel will rebound. We are committed to our vision to create a new market for personalized travel by 2025 and intend to deliver on that vision by continuing to focus on our own tech transformation and on developing and delivering flexible, differentiated products that help our customers drive revenue and yield.”