Back to top

Image: Bigstock

Sabre (SABR) Signs Long-Term Distribution Deal With Cleartrip

Read MoreHide Full Article

Sabre Corporation (SABR - Free Report) recently inked a long-term contract with Cleartrip. Per the contract, Cleartrip will distribute services by leveraging Sabre’s global distribution system (GDS).

Using Sabre’s technology, Cleartrip is focusing on increasing the demand for its services amid recovery from the coronavirus pandemic and for the post-pandemic era.

Moreover, Cleartrip will utilize Sabre’s Bargain Finder Max API technology to offer personalized shopping experiences and enhanced travel expertise to travelers. It will also provide relevant charges based on a range of preferences.

The latest partnership shows the reliability of Sabre’s GDS platform and Bargain Finder Max API technology. This in turn has expanded the company’s customer base.

Recovery in Travel Industry Bodes Well for Sabre

The global travel industry including travel technology companies like Sabre witnessed a severe downturn due to the pandemic. However, rising vaccination drive and lifting of restrictions in many parts of the world are helping the industry in recovering from the pandemic woes.

According to a recent Tripadvisor (TRIP - Free Report) research, 74% of vaccinated U.S. travelers have plans of summer trips this year. While 52% are likely to travel domestically, 22% are expected to travel abroad.

Moreover, a poll conducted by the Global Business Travel Association (“GBTA”) reveals that 74% of GBTA buyer and procurement respondents feel that their employees are willing to travel for business in the current scenario.

In addition, the IndustryARC report indicates that the global travel technology market is expected to exceed $12 billion by 2026, progressing at a CAGR of 7.7% from 2021 to 2026.

Sabre is well positioned to capitalize on improving market scenario for travel industry.

The company’s bookings improved 15 percentage points sequentially for first-quarter 2021. Also, Sabre has seen a significant rise in domestic travel bookings due to faster pace of vaccination in the United States.

Additionally, the company’s travel solution revenues improved 4.7% sequentially and distribution revenues saw sequential growth of 15.9%.

New Partnerships to Aid Recovery

Sabre is making strong efforts to upgrade technological solutions according to the current scenario and support the travel industry’s recovery from the pandemic. This in turn is driving the company’s customer loyalty and increasing customer base.

In addition to the latest deal, Sabre recently joined forces with many companies and renewed partnerships with the existing ones. Steady announcements of collaborations show that global travel agencies are preparing themselves amid the recovery period and for beyond, thus creating optimism for Sabre.

This month, the company also signed a new multi-year agreement and thereby strengthened its long-term relationship with U.K.-based Polani Travel Group. The deal enabled Travel Group to continue using Sabre’s innovative technology and platform to support its growth plans.

Early this month, the company inked an agreement with Curator Hotel & Resort Collection, wherein the hoteliers within the latter company will access Sabre’s retailing and distribution solutions for better engagement with guests and more profit generation.

Sabre renewed and extended its agreement with Indonesia’s Lion Air Group in late June, wherein the former will help the latter in enhancing performance and ancillary revenue capabilities through technologies.

We believe that the growing traction of Sabre’s technological solutions among airlines and travel companies is likely to remain a key growth driver in the upcoming period. However, uncertainty related to the pandemic and lockdowns in some countries are major concerns for the company.

Zacks Rank & Stocks to Consider

Currently, Sabre carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the broader technology sector include Digital Turbine (APPS - Free Report) and MakeMyTrip Limited (MMYT - Free Report) . While Digital Turbine sports a Zacks Rank #1 (Strong Buy), MakeMyTrip carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rates for Digital Turbine and MakeMyTrip are currently projected at 50% and 48.6%, respectively.