What changed in this filing

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Item 1. Business

2024-02-15 compared with 2023-02-17 · 44 added, 65 removed, 97 unchanged (53% of the section changed)

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At Sabre, we make travel happen.

We are a technology company that powers the global travel industry.

We partner with airlines, hoteliers, travel agencies and other travel partners to retail, distribute and fulfill travel.

Our vision is to be one of the most valued global technology partners in travel.

We are committed to helping our customers take on the biggest opportunities and solve the most complex challenges in our industry.

We connect the world’s leading travel suppliers, including airlines, hotels, car rental brands, rail carriers, cruise lines and tour operators, with travel buyers in a comprehensive travel marketplace.

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We are committed to helping customers operate more efficiently, drive revenue and offer personalized traveler experiences with next-generation technology solutions.

COVID-19 Pandemic

The travel industry continues to be adversely affected by the global health crisis due to the outbreak of the coronavirus, including variants ("COVID-19"), as well as by the effect of government directives 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.

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, this pandemic has continued to have a material impact to our consolidated financial results for the years ended December 31, 2021 and 2022.

Despite the continued negative impacts of the COVID-19 pandemic on our business and global travel volumes, as COVID-19 vaccines have continued to be administered and travel restrictions have been relaxed, we have seen gradual improvement in our key volume metrics during 2021 and 2022.

With the continued increase in volumes, our incentive consideration costs are also increasing significantly c ompared to 2020 and 2021.

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.

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

In 2022, we further refinanced and extended the maturity on other portions of our debt, which

were also impacted by increasing interest rates.

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 notwithstanding any ongoing recovery from the outbreak.

We believe our cash position and the liquidity measures we have taken will provide additional flexibility as we manage through the industry's 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 over at least the next twelve months;

however, given the magnitude of travel decline, the uncertain economic environment 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.

Business Segments and Products

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

As a result, during 2020, we accelerated the organizational changes we began in 2018 to address the changing travel landscape through a strategic realignment (the "Strategic Realignment") of our airline and agency-focused businesses and to respond to the impacts of the COVID-19 pandemic on our business and cost structure.

The organizational changes involve the creation of a functional-oriented structure to further enhance our long-term growth opportunities and help deliver new retailing, distribution and fulfillment solutions to the travel marketplace.

As a result of our Strategic Realignment, we now operate our business and present our results through two business segments, effective the third quarter of 2020:

We operate our business and present our results through two business segments:

(i) Travel Solutions, our global travel solutions for travel suppliers and travel buyers, including a broad portfolio of software technology products and solutions for airlines, and (ii) Hospitality Solutions, an extensive suite of leading software solutions for hoteliers.

All revenue and expenses previously assigned to the Travel Network and Airline Solutions business segments have been consolidated into a unified revenue and expense structure now reported as the Travel Solutions business segment.

The historical results of the Hospitality Solutions reporting segment have not changed.

Financial information about our business segments and geographic areas is provided in Note 19.

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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 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.

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 network and a broad set of solutions that integrate with our distribution platform to add value for travel suppliers and travel buyers.

Our distribution business 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.

Additionally, our Travel Solutions business offers a broad portfolio of software technology products and solutions, through software-as-a-service (“SaaS”) and hosted delivery model, to airlines and other travel suppliers and provides industry-leading and comprehensive software solutions that help our customers better market, sell, serve and operate.

Our product offerings include reservation systems for full-cost and low-cost carriers, commercial and operations products, agency solutions and data-driven intelligence solutions.

Our reservation systems bring together intelligent decision support solutions that enable end-to-end retailing, distribution and fulfillment.

Our product offerings include reservation systems for full-cost and low-cost carriers, commercial and operations products, agency solutions and data-

driven intelligence solutions.

Our reservation systems bring together intelligent decision support solutions that enable end-to-end retailing.

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 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.

The assets and liabilities associated with the AirCentre portfolio are presented as held for sale on our consolidated balance sheets as of December 31, 2021.

On February 28, 2022, we completed the sale of AirCentre to a third party.

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

Hospitality Solutions

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Our SaaS solutions empower hotels and hotel chains to manage pricing, reservations, and retail offerings a cross thousands of distribution channels while improving guest experience throughout the traveler journey.

We serve over 42,000 properties in 177 countr ies.

We serve over 42,000 properties in over 175 countr ies.

Growth Strategy

At Sabre, we connect people and places with technology that reimagines the business of travel.

In 2022, we initiated a strategic fr amework that outlines how Sabre intends to grow its business, invest in talent and cultivate a winning culture.

Specifically, our growth strategy includes enhancing relationships with customers by promoting the benefits to them and travelers of adopting additional products and services, adapting those products to the changing needs of the travel ecosphere, including integrating new distribution capability (“NDC”), and pricing them in ways that align with our customers, growing our customer base by continuing to innovate our products, adding desirable content, and aligning our technology and personnel to best highlight our value proposition globally and expanding opportunities by extending our product lines into closely related areas of travel where our customer relationships can efficiently drive adoption.

At Sabre, we are a technology company focused on four strategic areas:

generating positive free cash flow, achieving sustainable long-term growth, driving innovation and enhancing our value propositions, and the continued modernization of our technology.

Our growth strategy includes enhancing relationships with customers by promoting the benefits to them and travelers of adopting additional products and services, adapting those products to the changing needs of the travel ecosphere, including integrating new distribution capability (“NDC”), and pricing them in ways that align with our customers, growing our customer base by continuing to innovate our products, adding desirable content, and aligning our technology and personnel to best highlight our value proposition globally and expanding opportunities by extending our product lines into closely related areas of travel where our customer relationships can efficiently drive adoption.

Technology and Operations

Our technology strategy is focused on achieving company-wide operational stability, reliability, resiliency, 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.

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

Significant investment has gone into implementing a more unified technical 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.

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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 cloud-based processing platform that is one of the world’s most heavily used and resilient service-oriented architecture environments.

Over the last several years, our architecture has evolved from mainframe-based transaction processing to more secure, primarily cloud-based distributed processing.

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

high volume air shopping systems;

desktop access applications providing continuous, real-time data access to travel agents;

airline decision support systems;

an array of customized applications available through our Sabre Red 360 application;

and web based services that provide an automated interface between us and our travel suppliers and customers.

The flexibility and scale of our cloud-based technology infrastructure allow us to quickly deliver a broad variety of SaaS and hosted solutions.

high-volume air and hotel shopping systems;

sales and support applications for airlines, hotels, and travel agencies;

airline and hotel inventory management and operational support systems;

artificial intelligence ("AI")-powered analytics and decision support systems;

and web services that provide automated interfaces for retailing, distribution, and fulfillment of travel-related products and services.

The flexibility and scale of our cloud-based technology infrastructure allow us to quickly deliver a broad variety of SaaS solutions and evolve these solutions to meet the changing needs of the travel industry.

Travel Solutions customers consist of travel suppliers, including airlines, hotels and other lodging providers, car rental brands, rail carriers, cruise lines, tour operators, attractions and services;

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Airlines served by Travel Solutions vary in size and are located in every region of the world, and include hybrid carriers and low-cost carriers ("LCCs") (collectively, “LCC/hybrids”), global network carriers and regional network carriers.

Hospitality Solutions has a global customer base of over 42,000 hotel properties of all sizes.

Our airline and agency customers are in various phases of adopting NDC strategies, and those strategies vary by customer.

Hospitality Solutions has a global customer bas e of over 42,000 hotel pr operties of all sizes.

Sources of Revenue

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.

Transactions—Our Travel Solutions business generates distribution revenue for bookings made through our global distribution system ("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 using our GDS, for which we receive a fee.

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Often, we provide these services during the implementation phase of our SaaS solutions.

Media—We generate Hospitality Solutions revenue from customers that advertise their website or booking engine on digital marketing channels.

Media and Retailing—We generate Hospitality Solutions revenue from customers that advertise their website or booking engine on digital marketing channels.

We also generate Hospitality Solutions revenue through retailing offerings and are typically paid a portion of the value of each transaction according to commercial arrangements.

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.

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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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.

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 incidents."

We are also subject to prohibitions administered by the Office of Foreign Assets Control (the “OFAC rules”) and other similar global prohibitions, as applicable.

The OFAC rules prohibit U.S.

persons from engaging in financial transactions with or relating to the prohibited individual, entity or country, require the blocking of assets in which the individual, entity or country has an interest, and prohibit transfers of property subject to U.S.

persons from engaging in financial transactions with or

relating to the prohibited individual, entity or country, require the blocking of assets in which the individual, entity or country has an interest, and prohibit transfers of property subject to U.S.

jurisdiction (including property in the possession or control of U.S.

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Our businesses may also be subject to legislation and regulations affecting issues such as:

trade sanctions, exports of technology, antitrust, anticorruption, telecommunications and e-commerce.

trade sanctions, exports of technology, antitrust, anticorruption, telecommunications, artificial intelligence, and e-commerce.

These regulations may vary among jurisdictions.

For example, Russia has recently adopted legislation and related regulations, effective October 30, 2022, that require activities related to the development, creation and operation of automated information systems for processing domestic air transportation within the Russian Federation to be owned and operated by Russian residents or legal entities with no updates from or connection with systems abroad.

For example, Russia has adopted legislation and related regulations, effective October 30, 2022, that require activities related to the development, creation and operation of automated information systems for processing domestic air transportation within the Russian Federation to be owned and operated by Russian residents or legal entities with no updates from or connection with systems abroad.

This legislation and these regulations have prohibited our ability to provide these services in Russia, which has negatively impacted, and is expected to continue to negatively impact, our revenue and results.

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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.

Similarly, we experience seasonality in our cash flow from operations with the first quarter lower in collections, reflecting the revenue generated in December, and higher cash outflows with annual compensation and incentive consideration payments, for the previous year.

Human Capital

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

Our People —Since the initial impact of the COVID-19 pandemic on our business and operations, our human capital metrics have generally stabilized for the year ended December 31, 2022 compared to prior years.

Our People —In 2023, we implemented a cost reduction plan that reduced our workforce by 17% compared to the prior year, impacting our human capital metrics for the year ended December 31, 2023.

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

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

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.

We have launched our Leadership Framework to support our employees and cultivate talent.

This framework includes frequent one-on-one conversations, regular team meetings, meaningful performance feedback, timely recognition and supportive career development.

Our formal and informal reward, recognition and acknowledgement programs encourage employees to recognize peers, teams and departments to honor their champions and help promote satisfaction and engagement.

To assist in retaining key talent in the current highly volatile macro environment, we offer compensation programs to certain key employees, such as long-term performance-based cash incentive awards, performance-based restricted stock unit awards, time-based restricted stock unit awards, and other awards as appropriate.

To assist in retaining key talent, we offer compensation programs to certain key employees, such as long-term performance-based cash incentive awards, performance-based restricted stock unit awards, time-based restricted stock unit awards, and other awards as appropriate.

We monitor and evaluate various turnover and attrition metrics throughout our management teams.

Diversity and Inclusion — With 61 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.

We maintain 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 strategy.

We maintain an Inclusion and Diversity Council to help define a globally consistent approach to inclusion and diversity.

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.

We maintain certain assistance programs to continue to support the well-being of our team members, including for team members that operate in a remote working environment.

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.

We maintain certain assistance programs to continue to support the well-being of our team members, including team members that operate in a remote working environment.

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

Recently, for our US-based employees, we provided four additional paid holidays, which also align with our focus on inclusion.

Corporate Responsibility —We invest globally in our communities by encouraging employee volunteerism on company time through one paid day off per quarter for community volunteering.

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The information contained on our website is not incorporated by reference into this Annual Report on Form 10-K.

We may use our website, our Twitter account (@Sabre_Corp) and other social media channels as additional means of disclosing information to the public.

The information disclosed through those channels may be considered to be material and may not be otherwise disseminated by us, so we encourage investors to review our website, Twitter account and other social media channels.

The contents of our website, Twitter account or social media channels referenced herein are not incorporated by reference into this Annual Report on Form 10-K.

We may use our website, our LinkedIn account and our X (formerly Twitter) account (@Sabre_Corp) as additional means of disclosing information to the public.

The information disclosed through those channels may be considered to be material and may not be otherwise disseminated by us, so we encourage investors to review our website, LinkedIn and X account.

The contents of our website or social media channels referenced herein are not incorporated by reference into this Annual Report on Form 10-K.

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