Sabre Holdings in 2001 invested more than $15 million in TRX Inc. in exchange for a board seat and notes that can be converted for a 10 percent ownership in the company,
BTN has learned. TRX remains majority-owned by WorldTravel BTI parent BCD Holdings.
"In 2001, we set out with a financing goal, and in August we were very fortunate to be considering four different proposals," TRX president and CEO Trip Davis told
Business Travel News. "September 2001 came and went, and our management team was ecstatic to be able to close the financing in November successfully. We ended up working with several institutions and individuals, including myself. It was a strategic decision on the part of TRX to include Sabre in that financing, and it's been a fantastic collaborative effort since that time."
After a March 2001 decision to shelve plans for an initial public offering, Davis said in August 2001 that TRX was seeking an equity partner to take a 10 percent to 15 percent stake in the company for about $20 million
(BTN, Aug. 13, 2001). At the time, he said a GDS relationship would be "complex." Speaking to that, Davis last week asserted TRX's independence and said, "We were very cautious about perception and took special care with several dozen big clients or other big partners in the travel industry prior to even signing any documents for the financing to make it a non-event and not make it news. We've continued to proceed with that sort of caution and special handling with those partners, and that seems to be working well."
"We have a lot of faith in what TRX does," said Sabre chairman and CEO Bill Hannigan. However, he did not rule out the possibility of Sabre developing its own fulfillment or call center automation. "There is an opportunity to organically create services that benefit corporations or travel agencies in the mid-office, whether or not you happen to have a GDS company in your portfolio," Hannigan said. "The challenge would be how you would price it, and it would have to be outside the booking fee model, which creates a different relationship dynamic." Most of Sabre's revenue is generated by charging booking fees to suppliers. "Going from a booking fee to more of a menu model is a big challenge," Hannigan said. "We've done a lot of work on that, and the market's appetite for that kind of change in pricing could preclude it from being a worthwhile endeavor for the company. In the meantime, companies have been created that do provide those services. We're part owner of TRX. Well, we have an investment."