Kurt Ekert, President, Sabre shares his perspective on the role of technology in shaping the future path of the travel and tourism industry as well as the way forward for Sabre
Global GDS Sabre is going ahead with the advancement of its technology transformation journey to unleash tremendous opportunity and benefits for Sabre and its customers. The company is also making a number of big bet investments in airline and hotel retailing and merchandising and also leveraging artificial intelligence in new ways for airlines. Sabre aims to become the premier global technology platform in travel and to drive Its overarching purpose of creating a personalized travel marketplace by 2025. Excerpts from interview:
What are your initial impressions of Sabre in the first 3 months?
I’ve been incredibly impressed by the wealth of intellectual talent that we have at Sabre. We have an outstanding team with an unparalleled commitment to customer success. We want to ensure this talent can be unleashed to its full extent through a culture of enablement, in a company where we can enjoy coming to work every day, and where make a tangible difference to the travel industry.
We have clarity of strategic focus and we’re working very hard to ensure that our execution in 2022 and beyond matches our aspirations and potential.
The pace of change in the travel industry is very fast, and it is only accelerating. So, the winners are not going to be the ones who rest on their pre-Covid laurels, but who innovate and are willing to disrupt. We are focused on driving new value to the travel ecosystem, and in some cases that will mean disrupting our existing solutions.
This is an exciting time to have joined Sabre.
There has been a lot of innovation in travel technology during the pandemic. What, according to you, are the three biggest innovations?
We’re definitely at a pivotal moment for the travel industry, and the pandemic has created a landscape that is encouraging digital transformation and innovation at an accelerated pace.
One can expect huge technology efforts continue to enable personalization in the travel marketplace, across the whole retailing, distribution and fulfilment journey. Artificial intelligence and Machine Learning are key to offering a relevant travel experience at a great scale, going beyond anything we’ve seen before in terms of personalization and that’s why we’re forging ahead with our innovation partnership with Google.
Sabre started Cloud migration two years ago and this is a pivotal year for us toward completion of this journey. Cloud migration will enable lower compute costs and enable us to achieve our engineering velocity and throughput, meaning faster innovation cycles to benefit our clients.
What is also helping to accelerate innovation is a mass movement to open architecture, particularly for integrating with services and APIs. Integrating with partners is of huge benefit to all sectors of the industry, so that all industry participants can tailor their technology to their business strategy in order to evolve at speed and create an environment that allows for easier travel and travel planning.
How do you see the recovery scenario unfolding for the industry and by when should it come back to a 2019 level?
The recovery across all sub-sectors and geographies will be a multi-year journey, but we are very encouraged by the trends we are experiencing now.
If we dial back just a few months, we did see a dip in recovery because of the omicron variant. However, bookings soon bounced back, and they came back strong. While domestic and leisure bookings have continued to lead the recovery, international and corporate bookings have improved at an accelerating rate since January 2022. In March 2022 (through March 28, 2022 versus the same period in 2019), our gross air bookings recovered to approximately 48%, net air bookings to approximately 50%, passengers boarded to approximately 76% and gross hotel central reservation system transactions to approximately 105%. We expect our March 2022 recovery versus the same period in 2019 for both international and corporate bookings to be at their highest levels since the pandemic started in mid-March 2020. Geographically, the recovery has broadened, with all regions showing strong improvement from January 2022 to date.
Recovery in the Asia Pacific region continues to lag behind other parts of the world because of ongoing border closures and travel restrictions. However, we have seen an immediate surge in bookings as soon as borders re-open, in India and Australia for example. So, we know from our data that so-called “revenge travel” is a real phenomenon. People want to travel across all sectors and geographies as soon as they are able to, and, while no one can give an exact prediction about a return to 2019 levels, we expect the strong upwards recovery trajectory we are seeing to continue.
How do you see the future of business travel?
The thesis from many people, during the first year of the pandemic, was that corporate travel wouldn’t recover to the levels we saw pre-COVID for many many years.
There certainly may be some negative long-term structural impact of corporate travel given the rise of video conferencing, but competition will spur folks to get back on the road for example to see their clients. Further, with the rise of work from anywhere, I think we’ll see a material increase in ‘internal’ corporate travel as organizations seek to bring their team members together to foster professional connections and to build a robust company culture.
Looking at the data, while we have seen a leisure led recovery, we are now seeing the recovery of corporate travel on a positive parallel slope to that of leisure. Accordingly, it is reasonable to believe that overall corporate travel will recover to near 2019 levels globally in the next four or so years.
The winning solutions in corporate travel will include elements such as consumer-grade user experience (online and offline) with intelligent and relevant retailing and choice, data insights, and the optimization of both spend and employee productivity. Corporate travel promises to be an exciting and dynamic landscape in the years ahead.
How has the pandemic reinforced the value of NDC?
NDC is a very big focus for Sabre. The pandemic has accelerated trends we were already seeing pre-COVID, including the drive for personalization across the industry to meet evolving traveller wants and needs. Airlines want to sell dynamically in B2B in the same way they do in B2C, and it’s up to us to have the technological solutions to normalize and integrate the content, and then distribute it through all the different channels and points of sale that our agency and corporate customers have.
Our NDC strategy is called “Beyond NDC” at Sabre because our thinking is guided by a longer-term retailing vision. While NDC is an industry standard, going beyond NDC is about driving impactful innovation at scale. Last year was a busy year for our NDC program and, as we lay the additional key NDC foundation stones during 2022, we’re beginning to see elements of the “beyond” part of our strategy come to life.
The pandemic has brought travel technology in focus. How can the global travel and tourism industry accelerate the pace of adoption of the technology?
One thing certain in the travel industry is that the only constant is change. Many of our travel partners across the airline, hospitality and agency sectors have already taken the time during the pandemic – just as Sabre has – to re-set, refocus and to ensure that they have the technological solutions they need in order to drive recovery and thrive.
What we are doing with our technological transformation at Sabre, with the new capabilities and solutions we are creating, will play a meaningful role in driving adoption across the industry as it’s clear that innovation at pace and scale is an important part of competing to win in the industry. Technology adoption comes when you see the proof points of real advantage, ultimately leading to revenue optimization and a better end traveller experience.
In this new travel world, many travel companies have already realized they need to adapt the way they operate and have started to do so. They need to be able to react with more flexibility to new situations and to cope with such issues as staff shortages. During the pandemic, many of their customers have also become more digitally savvy and demanding than before. In many cases, existing technologies in the travel industry are not sufficient to adequately support the customers’ new and increased demands. Therefore, technology investments are necessary for travel companies to meet the demands of today’s traveller. Most travel agencies and airlines are showing that they are ready for digital transformation and are pursuing this strategy to improve both their positioning in the market and their profitability.
Sabre has been on the technological transformation road. How will this support your travel partners in their recovery and growth?
2022 will be a tipping point for our technological transformation and we expect to continue our significant investments in technology, so we want to make sure we’re getting a fast return on that investment for Sabre and for our travel partners. Our technology transformation is underpinning our overarching purpose of creating a new marketplace for personalized travel to ensure competitiveness and growth for the future across the travel ecosystem.
For Sabre’s travel partners, this transformation, which encompasses a move away from mainframe to the Cloud as well as an innovation framework, will result in next-generation capabilities that will enable the unlocking of more revenue streams and higher value offers. Our customers will benefit from more frequent releases of new capabilities that they can quickly and seamlessly integrate into their existing portfolios, as well as greater flexibility to consume Sabre solutions in a more platform-centric, API-led model.
The pandemic has shown us how important it is to have the capabilities to respond to evolving marketplace conditions, and our artificial intelligence (AI) capabilities will enable our travel partners to quickly adapt to changing industry dynamics and ever-evolving traveller expectations in order to optimize their own revenue streams while continually improving user experience.
What are developments in your key partnerships with Google and American Express Global Business Travel?
Our partnership with Google is centered around enabling future growth and differentiation. It includes migrating Sabre’s IT infrastructure to the Cloud which will give us greater security, advanced support and improved flexibility, but it extends far beyond a cloud migration deal. We’re pairing Sabre’s travel industry experience with Google’s advanced artificial intelligence (AI) and machine learning (ML) capabilities, with Sabre and Google working side-by-side to accelerate innovation for the entire travel industry. We’ve already started to integrate Google technology into our products and there is more of this to come.
We are to partner with Amex GBT to drive innovation and new capabilities in the corporate sector. We look forward to sharing these developments in the months ahead.
Sustainability has now become a buzzword for the industry. How should tourism industry developing countries adopt sustainable practices?
The drive for sustainability was there pre-pandemic, and, despite the challenges of the past two years, it is still there as we move further into recovery. As with all trends in the industry, it’s vital that the travel ecosystem has the right tools to enable it to incorporate sustainability into its business model. For instance, Thomas Cook (India) recently spoke to Sabre, in our new Sabre Ascent webinar series, about its renewed consideration for ESG. It will be using Sabre tools to provide more information to its corporate and leisure clients about their carbon footprint and the impact choosing different travel options could have. So, personalization and traveller demands will have a big role to play in sustainability going forward just as they do across all other elements of the ecosystem.