Sabre Corporation
SABR
recently signed a strategic partnership with the Japan-based Hotel Keihan Chain. Per the deal, the travel tech company will enable the Asian hotelier in creating tourism opportunities within Japan.
Utilizing Sabre’s Global Distribution System (“GDS”) platform along with a wide range of other technology solutions (including Sabre’s Consortia Services), the Osaka-headquartered hotel chain intends to expand its global reach and accelerate recovery of the Japanese tourism industry post pandemic.
With Sabre’s SynXis hospitality platform, which powers over 40% of the world’s leading hotel brands, Hotel Keihan will get access to exclusive international business opportunities. It will allow the hotel chain to connect with major corporations worldwide and commence Request For Proposal (“RFP”) contracting.
This, in turn, will aid Hotel Keihan by bringing in increased domestic and international bookings for both corporate and leisure trips. This will also help the hotelier in improving Average Daily Rate (“ADR”) and occupancy levels.
Meanwhile, the partnership is likely to aid the leading travel-related software and technology provider in expanding its customer share and boosting its Hospitality Solutions segment revenues. Sabre has its customer base spread over 160 nations with more than 425,000 agency partners globally. It is one of the largest marketplaces in the world that manages approximately $260 billion worth of global travel spending annually.
With a rise in vaccination efforts and lifting of restrictions worldwide, the global travel industry is gradually recovering from the pandemic blues. Sabre is well-poised to capitalize on the travel industry’s improving market scenario. The hospitality industry (part of the broader travel industry) is rebounding from the pandemic induced woes. The company’s Hospitality Solutions segment revenues totaled $55 million in third quarter compared with $51 million in second quarter and year-ago quarter’s $45 million.
Sabre Corporation Price and Consensus
Sabre Corporation price-consensus-chart
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Sabre Corporation Quote
Sabre has been winning consecutive deals from major global airlines, hoteliers and travel agencies of late. Recently, in November, it entered a distribution agreement with the second-largest hotel group in China, Huazhu Group, to expand global reach for its upscale and luxury hotel brands and aid in the latter’s global growth strategy.
In October, Sabre signed a new, multi-year, worldwide distribution agreement with one of the world’s largest international airlines, Emirates, to provide Sabre-connected travel buyers and agencies access to Emirates’ content, through GDS.
Prior to that, in September last week, it strengthened its partnership with the Chinese Shiji Distribution Solutions to offer hoteliers a broader access to the Chinese travel market. Before that, it extended partnership with Etihad Airways to provide network planning and revenue management solutions.
It is worth mentioning that even though its latest financial results reflect significant year-over-year improvement in gross bookings and reservation-system transactions, Sabre refrained from issuing an outlook citing uncertainty about the impact of the pandemic on its financials. This is disappointing. During the fourth quarter, the company usually suffers from seasonality in the travel industry. Revenues from travel bookings decline massively during the quarter, especially in December, as holiday related bookings are done in the earlier part of the year. Business travels also decline during the month, hence, overall revenues go down.
Zacks Rank & Key Picks
Sabre currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader computer and technology sector are
Salesforce
CRM
,
Advanced Micro Devices
AMD
and
Adobe
ADBE
. While Salesforce sports a Zacks Rank #1 (Strong Buy), Advanced Micro Devices and Adobe carry a Zacks Rank #2 (Buy) at present. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Long-term earnings growth rates for Salesforce, Advanced Micro Devices and Adobe are currently pegged at 16.8%, 46.2% and 19.1%, respectively.
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