Sabre Holdings was sold last month to two private equity firms in the U.S. for $4.45 billion. Although Sabre is considered the leading global distribution systems (GDS), analysts say the buyout centered more on the importance of the company’s subsidiary units, Travelocity and lastminute.com.
Aghis Athanassiadis, country manager here for Sabre, says there appears to be a trend to consolidate the internet direct booking market, but he doesn’t expect to see any further big changes this year. “In any case, for us here in Greece nothing has changed. It’s business as usual,” he says.
The Sabre buyout follows close behind the recent purchase of Worldspan by Travelport Ltd., for $1.4 billion in cash. That purchase came as surprise for many as rumors had been circulating for some time that it was in fact Amadeus that was in acquisition discussions with the global distribution systems company.
With this buyout, Travelport -which now includes Worldspan, Galileo, Orbitz and Cheaptickets under its umbrella- solidifies its position as the GDS in all three main regions.
And although Travelport now has two GDS companies, it is not clear what its plans are for the two. The company said it would merge Worldspan into one of its subsidiaries, but didn’t say which one. Travelport management did not commit to the eventual merging of the two GDS systems, and said only that they were considering all options, including running both systems in parallel.
In the meantime, here in Greece, Theodoros Pitsinelis, sales and marketing manager for the local Worldspan office, says that the sale would not be completed until sometime around the middle of this year and thus it’s difficult to make any predictions. He did say, however, that he forsees “some very positive changes within Worldspan.”
With these two buyouts in mind, leaders in the travel market expect to see some jostling for position over the coming months.
Analysts agree that the travel industry continues to grow at a substantial rate and travel suppliers and agencies require the technology and networks capable of handling the increased demand. As well, competition in the travel distribution industry has increased, driven in part by travel bookings via alternative travel distribution channels.
According to Forrester Research, more than half of U.S. travel bookings are already processed through alternative non-GDS channels.
Globally, sales from supplier direct websites are expected to continue to grow as airlines encourage direct bookings through frequent flyer programs, exclusive fares and potentially through removal of content from the GDSs.
Analysts are now digging deep to see if this is the mark of an industry slowly losing its grip on a once grand position, or if this just consolidations.