Sabre Sees Disappointing September Bookings
Sabre's air and hotel booking data from last month indicated little overall improvement in travel demand, as they were relatively flat, year over year, from last September's economic meltdown, which brought U.S. corporate travel to a near standstill, according to the company's top executives.
September usually is a good indicator of the corporate travel industry's performance as it is the first month of the shoulder season in which business travel traditionally increases following the summer months.
While Sabre's bookings did show some improvement compared with September 2008, taking into consideration the financial market meltdown and dismantling of Lehman Brothers and other companies, Sabre Travel Network and Airline Solutions president Tom Klein said, "year-over-year numbers look more or less flat" from the hotel side.
"We didn't expect it to bounce and it didn't," he told BTN. "We haven't seen numbers from the hoteliers themselves yet, but we don't expect to see anything to suggest broad recovery. As we look into next year, our plan for our company is that it is more of a flat environment than a growth environment."
Sabre Holdings chairman and CEO Sam Gilliland does not expect corporate travel to markedly improve until CFOs gain confidence from positive economic indicators, including the Consumer Confidence Index, gross domestic product and manufacturing sector statistics. "Most CFOs will be pretty conservative for the next couple of quarters," he said, "and therefore we'll see travel spend be pretty conservative."
In the past several weeks, Sabre has been analyzing the correlation between GDP growth and enplanements. According to Gilliland, the general trend for decades has been that enplanements rise at 1.5 times GDP growth. "It's been difficult for us to find a tight correlation in the short term versus what you see over multiple decades," he said. "It's hard to predict a quarter out, a couple of quarters out or within a quarter what enplanement growth might look like based on GDP growth, unfortunately. We did a lot of analysis on this and you have to look at a much longer period of time."
While Gilliland said 2010 forecasts are pointing to more than 1 percent growth in U.S. GDP and an 8.5 percent increase in China, the GDP-enplanement rule of thumb is not likely to hold true next year. "It makes it hard to build plans," Gilliland said. "It makes it hard for us to forecast and it makes it hard for airlines to forecast and have a sense for what growth in the economy might mean in the short term. Over the long term, growth in the economy should mean significant enplanement growth, and that's a good thing."