Sabre CEO Sam Gilliland is openly talking about the company “going out into the public markets eventually.”
So, the once-public company, which went private four years ago, would start trading on a stock market again.
Gilliland says even if Sabre opts for an IPO, then he anticipates TPG and Silver Lake Partners would retain a stake in the company for at least four years thereafter.
Of course, the IPO market is fairly barren at the moment, but that’s OK, as Gilliland refers to TPG and Silverlake Partners as “a patient bunch.”
“We have managed this business conservatively,” Gilliland says. “They are long thinkers and long holders.”
There are exceptions to the “long holders” proposition, Gilliland acknowledges, referring to Silver Lake’s involvement in buying a majority stake in Skype from eBay¬†and then striking a deal ¬†a year-and-a-half later¬†in May to sell it to Microsoft.
But, Gilliland says the company has made strategic investments in the business and doesn’t have to manage from a short-term perspective.
Sabre is not currently involved in any sale or consolidation talks, Gilliland says.
This wasn’t the first time Gilliland discussed playing the IPO card, having¬†mentioned the possibility¬†a couple of years ago, but the idea seems to be higher on the agenda these days.
The Sabre CEO also talked about trends in the company’s four business lines in a group discussion with assembled media at Sabre headquarters in Southlake, Texas, and in a one-on-one interview later.
The Sabre Travel Network GDS business is Sabre Holdings’ largest revenue driver, followed by Travelocity, then Sabre Airline Solutions and Sabre Hospitality, with Gilliland describing the latter as the smallest and fastest growing.
The markets will “highly value” the fact that Sabre Airline Solutions uses an SaaS model “if we become a public company again,” Gilliland says.
Gilliland confirmed that Sabre views its Travelocity business, including the Travelocity brand, Lastminute.com and Zuji, as core to the overall company.
Gilliland and other Sabre officials touched on other hot-button issues.
Travelocity and Cheapoair
Asked about September 2011 comScore¬†¬†statistics showing that the Fareportal Media Group, including Cheapoair, overtook Travelocity and secured the #4 spot in terms of monthly unique visitors among online travel agencies in the U.S., Gilliland says those sorts of numbers can be directionally helpful, but Travelocity focuses on its own numbers.
People should also consider “the quality of the traffic rather than the raw numbers,” Gilliland says.
Asked how the online business would take the next step in creating a larger footprint in the European hotel competition, Gilliland said Lastminute.com is poised to differentiate itself with some new product launches in the next several weeks.
With Southwest Airlines mulling a new reservations system provider and having narrowed the candidates to Sabre and Amadeus, Gilliland says he hopes Southwest continues to view Sabre as a good partner.
About the competition with Madrid-based Amadeus, Gilliland says: “We do understand how to service this market. We are just down the street. They know us well and we have very good relationships with their senior management team.”
Orbitz-American Express Deal
Travelocity has been powering the American Express Consumer Travel site¬†for several years, but will be replaced next year by Orbitz, which also plans on gaining a foothold with Amex agents by¬†paying them 12% commissions on hotel bookings.
Asked about the loss of that Amex business, Gilliland merely says it’s a “competitive marketplace” and “sometimes you lose.”
Virgin America Cutover
Virgin America migrated its Ifly reservations system over the weekend to SabreSonic for reservations and airport check-ins, but as of Nov. 2 still had a notification on its website alerting customers to problems with website bookings, viewing upcoming flights, ¬†extended hold times in its call center and long lines at the airport.
“We’ve been pleased with the progress of a transition of this scale and scope to date,” said Abby Lunardini, a Virgin America spokeswoman, Nov. 1. “We are still working through some of the final Web functionality issues, which is to be expected given the scope of a project like this — and we are appreciative of the patience of our guests.”
It turns out that in addition to transitioning to SabreSonic, Virgin America itself also changed part of the back-end of its website to mesh with the new Sabre system, Lunardini says.
And that perhaps was another element adding to the complexity of the project.
Hugh Jones, president of Sabre Airline Solutions, says the cutover “met our expectations,” adding that the data migration part of the process “went flawlessly.”
Jones said service at the airports has been “good,” although there’s “always some abnormality” in call center operations during a reservation system cutover because agents are still learning a new system.
Chris Kroeger, Sabre Travel Network’s senior vice president of marketing, says Sabre recently reached out to American Airlines in a bid to restart negotiations on a new GDS participation agreement, but was rebuffed.
Kroeger claims the airline, which has sued Sabre on antitrust grounds, prefers “the courtroom as a path to negotations.”
A spokesman for American Airlines, Ryan Mikolasik, sees it differently.
“We’re willing to negotiate, but the parties are not yet aligned on the value and importance of American’s claims,” Mikolasik says.
The two parties have agreed to continue their current agreements until a Texas court issues a verdict on the matter, which is expected around June 2012.
Google Hotel Finder
Felix Laboy, president of Sabre Hospitality Solutions, revealed that Sabre and the hotels connected to its CRS have been participating in Google Hotel Finder since the Spring.
So, for example, brands such as Affinia, Preferred Hotels, Kimpton and Peninsula, to name a few, appear with pricing in Google Hotel Finder because of their Sabre Hospitality CRS ties when consumers do a hotel search in the relevant market, Laboy says.
There is no extra fee per se from Sabre for hotels to participate — Sabre makes its money on the transaction volumes.
Trust International also is a CRS participant in Google Hotel Finder.
Sabre Hospitality plans to release a solution in the second quarter of 2012 which would give hotel websites a uniform appearance regardless if the websites were accessed by desktops, laptops or the panalopy of mobile devices, including tablets.
The solution uses sniffer scripts, which detect the type of device seeking to access the websites. Parts of the solution are written in HTML 5, Sabre officials say, because the iPhone and iPad don’t support Flash.
Note: Dennis Schaal took part in a Sabre-sponsored media event at Sabre headquarters.