What changed in this filing

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Item 1. Business

2022-02-18 compared with 2021-02-25 · 39 added, 39 removed, 122 unchanged (39% of the section changed)

12 unchanged sentences

COVID-19 Pandemic

During 2020, the outbreak of the coronavirus (“COVID-19”) has caused, and continues to cause, a severe global health crisis resulting in societal disruptions leading to economic downturn and uncertainties.

The travel industry continues to be adversely affected by the global health crisis due to the outbreak of COVID-19, as well as by government directives that have been enacted to slow the spread of the virus.

The outbreak of the coronavirus (“COVID-19”) has caused, and continues to cause, a severe global health crisis resulting in societal disruptions leading to economic downturn and uncertainties.

The travel industry continues to be adversely affected by the global health crisis due to the outbreak of COVID-19, including variants, as well as by government directives that have been enacted to slow the spread of the virus.

The COVID-19 pandemic has caused major shifts in the travel ecosystem resulting in the changing needs of our airline, hotel and agency customers.

This pandemic had a material impact to our consolidated financial results for the year ended December 31, 2020, resulting in a material decrease in transaction-based revenue across both of our business units compared to the prior year.

Lower global distribution system ("GDS") volumes resulted in a material decline in incentive consideration costs for the year ended December 31, 2020, compared to the prior year.

The reduction in revenues as a result of COVID-19 significantly and adversely affected our liquidity.

In 2020, we experienced significant decreases in transaction-based revenue in our Travel Solutions segment, including increased cancellation activity beyond what was initially estimated, as well as a reduction in SynXis Software and Services revenue in our Hospitality Solutions segment due to a decrease in transaction volumes as a result of the COVID-19 pandemic.

As expected, the pandemic continued to have a material impact to our consolidated financial results for the year ended December 31, 2021.

Despite the continued negative impacts of the COVID-19 pandemic on our business and global travel volumes, we have seen gradual improvement in our key volume metrics during 2021 as COVID-19 vaccines have continued to be administered and some travel restrictions have been relaxed.

With the continued increase in volumes, our incentive consideration costs also increased significantly compared to the prior year .

The reduction in revenues as a result of COVID-19 has significantly and adversely affected our liquidity.

During 2020, we responded with measures such as suspending common stock dividends and share repurchases, borrowing under our existing revolving credit facility, and completing debt and equity offerings.

Additionally, given the market conditions as the result of COVID-19, we responded with cost savings measures during 2020, including the reduction of our workforce through voluntary severance and early retirement programs and a right-sizing of our global organization.

We believe the ongoing effects of COVID-19 on our operations and global bookings will continue to have a material negative impact on our financial results and liquidity, and this negative impact may continue well beyond the containment of the outbreak.

We believe that we have resources to sufficiently fund our liquidity requirements for at least the next twelve months;

Additionally, given the market conditions as the result of

COVID-19, we responded with cost savings measures during 2020, including the reduction of our workforce through voluntary severance and early retirement programs and a right-sizing of our global organization.

In 2021, we refinanced and extended the maturity on a portion of our debt.

We believe the ongoing effects of COVID-19, including variants, on our operations and global bookings will continue to have a material negative impact on our financial results and liquidity, and this negative impact may continue well beyond the containment of the outbreak.

We believe our cash position and the liquidity measures we have taken will provide additional flexibility as we manage through the global economic recovery from the COVID-19 pandemic.

See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” As a result, we believe that we have resources to sufficiently fund our liquidity requirements for at least the next twelve months;

however, given the magnitude of travel decline and the unknown duration of the impact of COVID-19, we will continue to monitor our liquidity levels and take additional steps should we determine they are necessary or appropriate.

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Travel Solutions

Our Travel Solutions business provides global travel solutions for travel suppliers and travel buyers through a business-to-business travel marketplace consisting of our GDS and a broad set of solutions that integrate with our GDS to add value for travel suppliers and travel buyers.

Our Travel Solutions business provides global travel solutions for travel suppliers and travel buyers through a business-to-business travel marketplace consisting of our global distribution system (“GDS”) and a broad set of solutions that integrate with our GDS to add value for travel suppliers and travel buyers.

Our GDS facilitates travel by efficiently bringing together travel content such as inventory, prices and availability from a broad array of travel suppliers, including airlines, hotels, car rental brands, rail carriers, cruise lines and tour operators, with a large network of travel buyers, including online travel agencies (“OTAs”), offline travel agencies, travel management companies (“TMCs”), and corporate travel departments.

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Our commercial and operations products offer services to our customers to enable them to better use our products and help optimize their commercial and operations platforms.

On October 28, 2021, we announced that we have entered into an agreement with a third party to sell our suite of flight and crew management and optimization solutions, which represents our AirCentre airline operations portfolio within Travel Solution’s IT Solutions.

Acquisitions and Dispositions, to our consolidated financial statements for further information.

Hospitality Solutions

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The key elements of our growth strategy include:

• Developing innovative technology products through investment of significant resources in next-generation technology solutions that include delivering retailing intelligence to enable personalized traveler experiences in our marketplace and by travel suppliers, evolving the distribution of travel content including the integration of new distribution capability (“NDC”) content into our GDS, expanding our hospitality technology offerings including through our property management system ("PMS"), and continuing to address key customer needs in the areas of retailing, distribution, and fulfillment of travel and related products.

management system ("PMS"), and continuing to address key customer needs in the areas of retailing, distribution, and fulfillment of travel and related products.

• Transforming the security, stability, and health of our technology by leveraging maneuverability to enhance agility and modernize infrastructure at a global scale, with the goal of connecting people to experiences that enrich their lives.

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Technology and Operations

Our technology strategy is based on achieving company-wide stability, reliability and performance at the most efficient price point while continuing to innovate and create value for our customers.

Significant investment has gone into building a centralized Platform as a Service ("PaaS") architecture with an emphasis on standardization, simplicity, security and scalability.

We invest heavily in software development, delivery and operational support capabilities and strive to provide best in class

products for our customers.

Our technology strategy is focused on achieving company-wide operational stability, reliability, security and performance at an efficient overall cost while continuing to innovate and create incremental value for our customers.

Significant investment has gone into building a centralized Platform as a Service ("PaaS") architecture with an emphasis on standardization, simplicity, efficiency, security, and scalability.

We invest heavily in software development, delivery, and operational support capabilities and seek to provide best in class products for our customers.

We operate standardized infrastructure in our data center environments across hardware, operating systems, databases, and other key enabling technologies to minimize costs on non-differentiators.

We expect to continue to make significant investments in our information technology infrastructure to modernize our architecture, drive efficiency and quality in development, lower recurring technology costs, further enhance the stability and security of our network, comply with data privacy and accessibility regulations, and enable our shift to service enabled and cloud-based solutions.

For this reason, we have included Technology costs as a separate category of cost within our consolidated financial statements and notes contained in Item 8 , “ Financial Statements and Supplementary Data ,” of this Annual Report on Form 10-K.

Our architecture has evolved from a mainframe centric transaction processing environment to a secure processing platform that is one of the world’s most heavily used and resilient service-oriented architecture (“SOA”) environments.

Our architecture has evolved from a mainframe centric transaction processing environment to a secure cloud-based processing platform that is one of the world’s most heavily used and resilient service-oriented architecture (“SOA”) environments.

A variety of products and services run on this technology infrastructure:

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Transactions—Our Travel Solutions business generates distribution revenue for bookings made through our GDS (e.g., air, car and hotel bookings) and through our partners and generally we are paid directly by the travel supplier.

A transaction occurs when a travel agency or corporate travel department books or reserves a travel supplier’s product on our GDS, for which we receive a fee.

A transaction occurs when a travel agency or corporate travel department books or reserves a travel supplier’s product using our GDS, for which we receive a fee.

Transaction fees include, but are not limited to, transaction fees paid by travel suppliers for selling their inventory through our GDS and fees paid by travel agency subscribers related to their use of certain solutions integrated with our GDS.

We receive revenue from the travel supplier and the travel agency according to the commercial arrangement with each.

SaaS and Hosted —We generate Travel Solutions' IT Solutions revenue and Hospitality Solutions revenue through upfront solution fees and recurring usage-based fees for the use of our software solutions hosted on secure platforms or deployed via SaaS.

SaaS and Hosted—We generate Travel Solutions' IT Solutions revenue and Hospitality Solutions revenue through upfront solution implementation fees and recurring usage-based fees for the use of our software solutions hosted on secure platforms or deployed via SaaS.

We maintain our SaaS and hosted software and manage the related infrastructure with the assistance of third-party providers.

We collect the implementation fees and recurring usage-based fees pursuant to contracts with terms that typically range between three and ten years and generally include minimum annual volume requirements.

Software Licensing —We generate Travel Solutions' IT Solutions revenue from fees for the installation and use of our software products on premise.

Some contracts under this model generate additional revenue for the maintenance of the software product.

Software Licensing—We generate Travel Solutions' IT Solutions revenue from fees for the on-site installation and use of our software products.

Many contracts under this model generate additional revenue for the maintenance of the software product.

Professional Service Fees—We generate Travel Solutions' IT Solutions revenue and Hospitality Solutions revenue through offerings that utilize the SaaS and hosted revenue model which are sometimes sold as part of multiple performance obligation arrangements for which we also provide professional services, including consulting services.

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Additionally, Hospitality Solutions generates revenue from customers that advertise products on our CRS.

Advertisers use two types of advertising metrics:

(i) display advertising and (ii) action advertising.

In display advertising, advertisers generally pay based on the number of customers who view the advertisement, and are charged based on cost-per-thousand impressions.

In action advertising, advertisers generally pay based on the number of customers who perform a specific action, such as click on the advertisement, and are charged based on the cost per action.

Customers can also purchase preferred placement on hotel shopping displays on travel agency terminals.

Customers pay for preferential payment through a subscription fee which is based on the amount of revenue the customer generates through our GDS and geographical market of the customer’s property (designated by airport code).

We operate in highly competitive markets.

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In addition to other GDSs and direct distributors, there are a number of other competitors in the travel distribution marketplace, including new entrants in the travel space, that offer metasearch capabilities that direct shoppers to supplier websites and/or OTAs, third party aggregators and peer-to-peer options for travel services.

Travel Solutions also competes with a variety of providers in a rapidly evolving marketplace

which includes global and regional IT providers, various specialists in selected product areas, service providers and airlines that develop their own in-house technology.

Travel Solutions also competes with a variety of providers in a rapidly evolving marketplace which includes global and regional IT providers, various specialists in selected product areas, service providers and airlines that develop their own in-house technology.

Hospitality Solutions operates in a dynamic marketplace that includes large global players, significant new entrants and hotels that develop their own in-house technology.

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These laws, regulations and policies include regulations applicable to the GDS in the European Union (“EU”), Canada, the United States and other locations.

We are subject to the application of data protection and privacy regulations in many of the countries in which we operate, including the General Data Protection Regulation ("GDPR") in the EU and the California Consumer Protection Act ("CCPA").

We are subject to the application of data protection and privacy regulations in many of the U.S.

states and countries in which we operate, including the General Data Protection Regulation ("GDPR") in the EU.

See "Risk Factors —Our collection, processing, storage, use and transmission of personal data could give rise to liabilities as a result of governmental regulation, conflicting legal requirements, differing views on data privacy or security breaches.

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See “Risk Factors—Any failure to comply with regulations or any changes in such regulations governing our businesses could adversely affect us.”

Though the travel industry is typically seasonal in nature, seasonality has not significantly impacted our financial results for the year ended December 31, 2020 due to the ongoing impacts of the COVID-19 pandemic on the travel industry.

The COVID-19 pandemic severely depressed revenue and resulted in an unprecedented amount of cancellations in 2020.

Historically, travel bookings, and the revenue we derive from those bookings were typically seasonally strong in the first and third quarters, but declined significantly each year in the fourth quarter, primarily in December.

We recognize air-related revenue at the date of booking, and because, prior to the COVID-19 pandemic, customers generally booked their November and December holiday leisure-related travel earlier in the year and business-related travel declined during the holiday season, revenue resulting from bookings was typically lower in the fourth quarter.

The travel industry is seasonal in nature.

Travel bookings and the revenue we derive from those bookings, are typically seasonally strong in the first and third quarters, but decline significantly each year in the fourth quarter, primarily in December.

We recognize air-related revenue at the date of booking, and because customers generally book their November and December holiday leisure-related travel earlier in the year and business-related travel declines during the holiday season, revenue resulting from bookings is typically lower in the fourth quarter.

Human Capital

We maintain our SabreNext Strategic Framework that defines areas of focus for our culture and highlights how we enable our people to execute the plans and priorities for our technology, product, financial and customer strategies.

Our People —The significant impact of the COVID-19 pandemic on our business and operations has resulted in significant variances in our human capital metrics for the year ended December 31, 2020 compared to prior years.

Our People —The ongoing impact of the COVID-19 pandemic on our business and operations has continued to result in significant variances in our human capital metrics for the year ended December 31, 2021 compared to prior years.

We have not experienced any work stoppages and consider our relations with our employees to be good.

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United States 2,391 32 %

Europe 1,907 25 %

APAC 1,997 26 %

Europe 1,941 25 %

All Other (1)

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We seek to set compensation at competitive levels that help enable us to hire, incentivize, and retain high-caliber employees.

During 2020, we launched our Lead the Way program to support the virtual environment and cultivate talent.

We have launched our Lead the Way program to support the virtual environment and cultivate talent.

This program includes a leadership speaker series, leadership skills series and on-demand resources for all leaders, with a particular focus on first-time or first-level managers.

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Diversity and Inclusion — With 65 offices around the globe, we believe that diversity and inclusion are at the core of our success and that the different backgrounds, experiences, perspectives, and ideas of our employees are critical to spur innovation, drive growth and sustain competitive advantage in our industry.

During 2020, a portion of our executive compensation was linked to our diversity and inclusion initiatives and we established an Inclusion and Diversity Council to help define a globally consistent approach to inclusion and diversity as a business imperative and an enabler of our SabreNext strategy.

We have established an Inclusion and Diversity Council to help define a globally consistent approach to inclusion and diversity as a business imperative and an enabler of our SabreNext strategy.

Health and Wellness —The health and safety of our team members is of the utmost importance.

In addition to core health and welfare benefits, our wellness program offers resources to promote physical, emotional, and mental well-being.

During 2020, we extended certain assistance programs to continue to support the well-being of our team members during the COVID-19 pandemic.

Additionally, to help ensure the safety and wellness of our employees going forward, we have expanded our parental leave program, enhanced our personal time off benefits, and we are in the process of implementing a work-from-anywhere program that will allow our employees additional flexibility in work arrangements and increased opportunities to work remotely.

We have extended certain assistance programs to continue to support the well-being of our team members during the COVID-19 pandemic.

Additionally, to help ensure the safety and wellness of our employees going forward, we have expanded our parental leave program, enhanced our personal time off benefits, and implemented a work-from-anywhere program that allows our employees additional flexibility in work arrangements and increased opportunities to work remotely.

Corporate Responsibility —We invest globally in our communities by encouraging employee volunteerism on company time.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business