Q4 2021 Sabre Corp Earnings Call
Good morning, and welcome to the Sabre fourth quarter and full year 2020 earnings Conference call. My name is Victoria and there'll be an operator as a reminder, please note today's call is being recorded I'll now turn the call over to the Vice President of Investor Relations. Kevin Christie. Please go ahead.
Thanks, Nick.
Everyone. Thank you for joining us for our full year and fourth quarter of 2021 earnings call. This morning, We issued an earnings press release, which is available on our website at investors that favor dot com.
Slide presentation, which accompanies today's prepared remarks is also available during this call on the Sabre Investor Relations webpage.
A replay of today's call will be available on our website later this morning.
We would like to advise you that our comments contain forward looking statements that represent our beliefs or expectations about future events, including the duration and effects of COVID-19 industry and recovery trend benefits from commercial and strategic arrangement expected revenue costs and expenses cost savings margins and liquidity among others.
All forward looking statements involve risks and uncertainties that may cause actual results to differ materially from the statements made on today's conference call.
More information on these risks and uncertainties is contained in our earnings release issued this morning, and our SEC filings, including our third quarter 2021, 10-Q, and 2020 Form 10-K .
Throughout today's call. We will also be presenting certain non-GAAP financial measures referenced during today's call to adjusted operating loss adjusted net loss from continuing operations adjusted EBITDA adjusted EBITDA margin adjusted EPS and free cash flow and net debt to LTM adjusted EBITDA have been adjusted to exclude certain items. The most directly <unk>.
Terrible GAAP measures and reconciliations for non-GAAP measures are available in the earnings release and other documents posted on our website at investors <unk> Dot com.
Participating with me are John <unk>, our Chief Executive Officer, Curt Eckert, our President and Doug Barnett, Our Chief Financial Officer, Scott Wilson, our president of hospitality solutions will be available for Q&A after the prepared remarks.
With that I'll turn the call over to Sean.
Thanks, Kevin Good morning, everyone and thank you for joining us.
As we know the past two years have been extraordinarily disruptive.
We like others have had to deal with numerous unpredictable headwinds.
These challenges, we never lost sight more abandoned our focus on future opportunities.
I needed to be re prioritized others, specifically the technology transformation, continuing notwithstanding the challenging environment.
During our earnings call in February February of 2020, we articulated the importance and expected benefits of our technology transformation. Despite these headwinds we with our partners continue to execute.
'twenty two is the midpoint of these efforts and we are intent on accomplishing our goals for the technology transformation.
We are confident that we will accomplish these goals by the end of 2024, and we believe our advanced agile global technology footprint and efficient cost structure will be superior to our competitors in.
In 2025, we believe our full year run rate efficiencies and improved technology benefit will drive superior financial results under multiple scenarios when compared to 2019.
The global travel recovery was slow at the beginning of the year, but that has changed significantly February month to date global GDS bookings are on pace to reach a similar level of recovery versus the same period in 2019 as November 2021, which was the best month since the onset of COVID-19.
For these reasons, we believe 2022 is shaping up to be a year of recovery and progress.
Turning to slide four let me now provide an overview of the topics we will cover on today's call.
I'll begin by discussing the considerable opportunity, we see for sabre and our investors as recovery takes hold and we reach the other side of Covid.
Next I'll provide an update regarding the ongoing travel recovery, including specific booking passengers boarded and hospitality Crs transaction transaction trends and how omicron has temporarily temporarily affected the recovery.
<unk> will detail our expected strong financial performance under specific recovery scenarios in 2025, and the investments we are making in our technology transformation to achieve these results.
Finally, I will turn the call over to Doug to walk you through the results of the quarter and financial outlook for 2022.
Before I start I do want to take a moment and thank my sabre teammates around the World 2021 was another challenging year for the travel industry and for Sabre.
I believe my team members are aware, but it is important for me to emphasize how much I do appreciate their extraordinary efforts, serving our customers looking out for one another and at the same time executing our transformation to help enable a new marketplace for personalized travel.
I'd also like to welcome <unk> to his first earnings call at Sabre hurt joined US in January and is quickly learning the organization curt's background and skills make him a perfect choice of precedent.
He has had an exceptional understanding of the travel marketplace Global Air and hotel distribution consumer E Commerce, and corporate travel I look forward to working with him in the years to come.
His arrival will allow me to continue to focus on our long term strategy and goals for 2025 as well as to spend more time externally with our customers investors and other important constituents something that I'm eager to do.
I won't ask Kurt to present, our results just yet but thought it would be a good for him to say a few words of introduction hurt.
Thank you Sean I appreciate the welcome and this is an exciting time to have joined Sabre having.
Having worked as an executive at one of <unk> competitors and more recently.
At a top customer with CWT newspaper.
Newspaper well from the outside.
After just over a month I'm getting better appreciation for sabre has many strengths firsthand.
Dynamic changes are coming in the travel sector.
I believe that <unk> people compelling product offerings.
And strong client relationships uniquely position us to capitalize on these changes.
I am excited to partner with Sean.
And our global team to drive World Class innovation and financial performance I also look forward to meeting our investors and analysts in the near future.
John back to you great. Thanks, a lot Kurt I would like to turn over to slide five I'd like to start today's call with what I consider to be some of the most important aspects of the investment case for sabre as we've seen in our booking data over time the demand for travel remains very strong but has been curtailed by global travel restrictions designed to counteract the co.
19 pandemic.
Covid case count fall, we once again see travel restrictions lifted and know our revenues and earnings improve.
We believe <unk> is a travel.
Investment opportunity in the near term based on these points.
But favre offers much more as an investment then just travel recovery momentum as we look ahead, we are investing to drive EBITDA EBITDA margin operating income and free cash flow higher than 2019 levels as mentioned I'll provide an illustration of what our 2025 financials look like under different recovery scenarios.
Despite the challenges caused by the pandemic our expectations for 2025 are in line with or better than our pre pandemic guidance provided in February of 2020 our.
Our ambitions are higher and illustrate the positive financial impact our technology transformation is expected to have on future earnings.
We believe as we achieved these goals value not currently recognized in the market will be unlocked.
Turning to slide six.
Our volume metrics, namely distribution gross air bookings it.
Solutions passengers boarded and hospitality growth Crs transactions have broadly track the inverse of COVID-19 cases over time, we saw a slowdown in travel bookings beginning in mid June 2021 associated with increased Delta Varian cases, followed by a sharp recovery from September to the end of November .
The omicron variant hurt our booking trends in December and into January .
<unk> trends, we are seeing a quick acceleration in booking recovery with hospitality, leading followed by air as Covid case counts and restrictions debate.
Please note that we changed our travel recovery slides to display a percentage of recovery of 2019, instead of a percentage decline versus 2019.
Hotel Crs transactions continue to lead and have recovered 77% in January versus the same period in 2019.
It solutions passengers boarded every covered 68% in January versus the same period in 2019.
And finally distribution gross bookings recovery with 31% in January versus the same periods in 2019 during the month bogey recovery did accelerate with a final week, reaching 37% of 2019 levels.
Turning to slide seven where we present GDS industry data regionally the global travel recovery was gaining momentum through most of Q4, but slowed again in December and January due to the omicron variant.
After this past month to date February global GDS recovery is tracking over over 50% versus 2019 similar to last November the best month of recovery since the onset of Covid.
We are encouraged by both the strength of the recovery and the better global mix versus the previously heavily weighted U S centric recovery with lower margin bookings.
Based on historical pre Covid booking curve and the absence of a future travel restricted cobot insurgents. We are optimistic that the current momentum in corporate and international as well as leisure demand will accelerate into the strong seasonal travel months ahead.
We continue to be bullish on the return of corporate travel and recently expanded our commercial relationship and the more profitable corporate travel segment with American Express Global business travel. This long term strategic partnership includes incremental bookings for us and a multimillion dollar annual investment in joint technology by GBT.
Turning to slide eight we've talked in the past about the travel marketplace is evolving and how we are committed to helping lead our partners into the future.
We discuss strategic investments such as personalized offers low cost carrier growth distribution, and MDC and our technology transformation, our commitment and belief in the value of these initiatives has only strengthened over time and each are moving rapidly forward.
Today I'd like to give you further perspective regarding our tech transformation, which includes our mainframe offload and migration to Google Cloud. We believe our tech transformation is one of the primary facilitators of higher margins and cash flow for sabre in the future. We've chosen to continue to invest in the tech transformation. Despite the pandemic.
Nick because we expect it will produce an outstanding return on the investment.
In 2019, we spent about $450 million in hosting cost to run our systems by.
By 2025 without tech transformation efforts, we would have expected our annual hosting cost to increase about 50% or $200 million to $250 million.
We would also have needed to invest an additional $150 million to $200 million in capex to refresh our servers and datacenters.
Finally, we would not have been able to take advantage of the many product enhancements the technology transformation unlocks.
<unk> faster time to market enhanced stability and security, our global distributed cloud footprint reduce latency easier customer deployment and lower cost of development.
We believe we are ahead of our competitors in this endeavor and the global distributed cloud footprint reduce latency and other enhancements have been instrumental for us in winning new business.
We estimate that over the next 10 years, the ROI of the technology transformation is expected to be between 30% and 35% with an MTBE north of $300 million.
Turning to slide nine.
In 2021, we identified three key technology milestones as a reminder, they were to deploy travel solutions are shopping and Google cloud platform or DCP.
Transition hospitality solutions CRF into DCP with a global footprint and migrate 15% of our mid range workloads to DCP.
I'm pleased to say, we met or exceeded all of these previously communicated milestones travel solutions are shopping in hospitality solutions CRF, both moved to DCP and we actually moved 18% of our mid range workloads to GCT.
As we look ahead to 2022 and 2023, our technology transformation continues with many exciting and essential activities plan.
The key milestones for the project are laid out on this slide.
In 2022, we expect to invest an incremental $45 million versus 2021 or about $100 million in total and the tech transformation as we exit our sabre managed data centers and migrate to the Google cloud.
Also expect to offload passenger name record PNR from the mainframe to Google Cloud you can think of a PNR at the customer reservation database, which is obviously an important step forward.
Our tech transformation spend is anticipated to decline each year until we complete our goals for the mainframe offload a GDS functionality on our cloud migration expected by the end of 2024.
In addition to realizing the benefits of the cloud by the end of 2024, we expect our annual run rate technology savings versus 2019, assuming only an 80% recovery of 2019 volume to be more than $150 million.
80% is only illustrative of the fact that we expect our technology transformation and what it encompasses will drive better adjusted EBITDA adjusted EBITDA margin adjusted operating income and free cash flow versus what versus what we produced with higher volumes in 2019.
Turning to slide 10.
Building on my comments from the previous slide we take the stewardship of your capital very seriously and have carefully evaluated the investments we are making.
The technology transformation, along with our other investments that support our business execution are expected to unlock significant value for our shareholders as we drive the company to higher profitability and cash flow generation.
On this page, we provide specific financial targets to which we are driving favor by 2025.
Obviously, the extent that the travel recovery will affect our results.
But even under an at only 80% favor GDS booking recovery scenario, we are targeting expected results to be better than 2019 under scenario with favorite GDS bookings returned to 2019 levels, we expect our EBITDA margin to be greater than 26%.
This is in line with the guidance we provided in February of 2020 before the pandemic.
Under a more positive illustrative scenario in which sabre GDS bookings are 120% of 2019 levels, we expect our EBITDA margin to be greater than 28%.
To be clear our ambitions and associated investments in technology are not to just get back to 2019 levels. Our ambitions are much greater but the comparisons to 2019 is simply to illustrate the positive earnings potential driven by our technology transformation the capabilities unlocks a a modern agile technology footprint and.
The products, we believe position us well to not only reach previous financial returns, but grow well beyond.
Note that these targets exclude the financial results of Air Center as we expect the sale to CAE will close as anticipated in Q1 of 2022 as a reminder, in 2019 are center generated about $150 million in revenue and $55 million in EBITDA.
On Slide 11, you can see an illustration of how we expect revenue EBITDA operating income and free cash flow to trend through 2025, even under the more conservative conservative, 80% Sabre GDS booking recovery versus 2019 scenario. Despite the near term uncertainty regarding travel volumes.
By 2025, we expect to manage favor to increasing levels of profitability and cash flow generation and to be able to delever and create value for our shareholders. We do not need a full travel recovery for saver to produce better financial results in 2025 than pre pandemic 2019.
And at this point I'd like to hand, the call over to Doug Great. Thanks, Sean and good morning, everyone turning to slide 12 as expected. The COVID-19 pandemic continued to weigh heavily on our results in Q4. However, the fourth quarter showed significant financial improvement versus Q4 of 2020 and sequentially from Q3 two.
<unk> thousand 21.
Total revenue was $501 million, a significant improvement versus revenue of $314 million in Q4 last year due to the continued recovery in global Air Hotel and other travel bookings.
Distribution revenue totaled $286 million, an improvement versus revenue of $131 million in Q4 of 2020.
Our distribution bookings totaled $58 million in the quarter.
Compared to 2019 net air bookings recovered at 44%, 51% and 39%.
November and December and 45% in the quarter as a whole.
Our average booking fee in the fourth quarter was $4 96.
Versus 390, 284, and $4 59 in the first second and third quarters of the year.
Our it solutions revenue totaled $165 million in the quarter, an improvement versus revenue of $145 million last year.
<unk> totaled 129 million, representing a 69% recovery versus the fourth quarter of 2019.
The talented solutions revenue totaled $54 million, an improvement versus revenue of $41 million in Q4 of 2020.
Central Reservation system transactions were at 90% of 2019 levels and totaled $23 million in the quarter.
EBITDA showed meaningful year over year improvement, but remained slightly negative in the quarter, reflecting the continued impacts of the COVID-19 pandemic the.
The significant year over year over year improvement in revenue in the quarter was partially offset by increased travel solutions incentive expense and hospitality solutions transaction fees due to higher volumes as expected our technology costs and selling general and administrative expenses increased due to volume recovery trends and incur.
<unk> labor and professional services expenses.
Operating income net income and EPS also showed improvement versus the prior year.
Free cash flow was a negative $30 million in the quarter aided by working capital seasonality.
As a reminder, ericsson or assets are being treated as held for sale on our balance sheet, while they're operating results remained in our P&L.
When the sale to CAE closes, which we still expect to occur in the first quarter of 2022 Sabre will no longer recognize revenue and earnings associated with air sooner products are there.
Though our reported passengers boarded will not be impacted our revenue per passengers boarded for our <unk> solutions will be lower as a result, excluding air centre related revenue.
Additionally, post close are central employees will transition to CAE and a transition services agreement will go into effect.
We will be compensated by <unk> for the costs related to the transition services agreement activities.
We ended the quarter with a cash balance of $1 billion and have no significant near term uses of cash.
The sale of Air Center is expected to further strengthen our liquidity position, we expect expect cash proceeds of $393 million.
From the sale of <unk> upon closing.
We feel confident in our current liquidity position.
We anticipate free cash excuse me anticipate free cash flow turning positive during the second half of 2022 and continue.
To examine refinancing opportunities in the credit markets.
We maintain our medium to long term leverage target of two five to three five times.
Now turning to slide 13.
The near term outlook for travel remains very difficult to forecast due to the evolving COVID-19 backdrop.
The 2022 financial outlook, we presented here is not intended to suggest we know the bookings recover we will experience in 2022, rather it is designed to provide a frame of reference for you to understand how our financials could look this year at different levels of sabre net bookings recovery.
We presented the scenarios with and without Air Centre for ease of comparison to help ensure its expected sales taken into account, including its impact on revenue earnings and revenue per passenger boarded as mentioned before in 2019 are central generated about $150 million in revenue and 55.
EBITDA as I mentioned before the sale are expected to close this quarter.
As Sean discussed in 2022, we expect to invest an incremental $45 million versus 2021, and our tech transformation.
We're also investing in global business systems, such as our billing system cyber security and increased compensation to attract and retain our highly sought after talent.
These incremental investments are expected to total $40 million and to improve processes and increase workflow efficiency, while also helping reduce risks.
<unk> and our internal business systems will also allow us to better support our customers as modern retailing strategies with advance and new commercial models emerge additional detail on the breakdown is as investments as listed on the slide.
The incremental investments, we anticipate that only cyber security insurance and increased compensation should be viewed as ongoing expenses.
Balance of the spend is bubble related to activities underway and we expect that they will revert once work is completed.
As I mentioned earlier in Q4 net air bookings recovered at a 45% pace.
The impact that we've seen from omicron and even with the pickup in bookings in February we do not expect to recover in Q1 to reach Q4 th level.
Please keep in mind the cash settlement occurs after bookings so the cash flow impact of OMA front is expected to largely affect Q1, rather than Q4.
We do however, expect continued quarter over quarter bookings recovery, resulting in strong momentum as we exit 2022.
Therefore from our revenue earnings and cash flow standpoint, we expect a similar pattern to what we experienced in 2021 with.
With the back half of the year stronger than the front.
Even without air centers financial contributions and including the incremental investments we outlined.
Assuming a stable bookings full year recovery of just 50%, we'd expect free cash flow to turn positive during the second half of 2022 and it continued trending positive thereafter.
Now turning to slide 14 I'll end.
Sean started with investment thesis, we see in favor over the next few years, we expect our revenue profitability and free cash flow to grow as a travel limitations caused by this epidemic continue to subside.
The investments, we're making are technology are expected to great the opportunity for unit cost savings and higher margins than pre pandemic levels by 2025, even if travel volumes do not return fully to 2019 levels.
We strongly believe this opportunity is not fully reflected in the market today.
Thanks for joining us today and Victor Please open up for Q&A.
To answer your question the Union.
One from your telephone.
Drilling a question just press the pound key.
Alicia we compile the Q&A roster.
Our first question comes from the line of Mike.
Modular from Bernstein research.
To begin.
Thank you very much.
Thanks <unk>.
Additional details on the both on the 2025.
Change I'd like to drill in a little bit on the IQ side understanding that you've exceeded your technology targets of 2021.
How does this impact the timeline to completion are you planning to finish a little ahead is that way.
Additional payments and spending youre going to have to pull that forward.
Are you seeing any benefits and customer retention or in closing new deals any color on that would be appreciated and then I've got a follow up.
Yes, so mark this is Sean and I'll, let <unk>.
Doug jump in as well and I think I'm going to take you back to February of 2022, what we stated and walk you through a couple of things to try to address your questions first.
And our focus on the global business system. So if you go back to 2020, we really tried to illustrate.
What we were seeing at that point in time relative to the savings and what what.
What it does for us relative to the benefits.
And in doing that Marc this is the one thing that we've been able to sort of leverage through the pandemic as the relationship we have with our partners specifically Google on how do we think about the spending curve of this taking place because we talk about essentially they are providing some level of support in this happening. So as you look at what we have been able to progress.
Through the pandemic, we've actually been able to stay on course, if you look at what we're doing from here going forward, it's really completing what we outlined to do so what we've talked about market is really the exit run rate of 2024, and I would tell you I think we're on track for it is what it is what's happening.
As it relates to the global business systems. This is one thing that we did push back a little bit the re prioritization of spending.
So when we announced that we were essentially cutting back expenses. After the pandemic. This is one that we paused for a period of time, we actually worth spending some money, but we have to complete this because it does really get into the capabilities. When we think about how the model is changing with some of the contracts that are out there. We look at just the leakage in being able to make sure that we're a REIT.
Capturing that these are all focused on what we have been talking about exiting 2024, and really getting you an insight into 2025. So hopefully hopefully that helps you market and sort of how we've walked through all of this.
That makes sense.
And then maybe a follow up in there.
In the prepared remarks, you talked about savings based on 80% of 2019 revenue how should we think about spending now scaling we're scaling once the stock if you <unk>.
Those revenue targets is it going to scale in line or slower and how does that compare to the way in which cost scale free that conversion the tet conversion.
Yes, I think the way I would answer that Mark is as we've looked at essentially what we have provided you for an outlook of 2025, a big part of that is really just recovery taking place and if you think about the core technology.
The infrastructure that is essentially will continue to come down right now youll see that with volumes going up under the Google Cloud agreement, but that's a good thing because we're driving more volume, which you would see a revenue increase I think the other way of looking at it is what is happening with R&D and when I think about the R&D side of the equation.
Looking at Curt across the table.
It is it is it has one versus.
The ability to what are we investing in that's going to drive more revenue. So the important thing is as we look at this there's definitely margin improvement that will occur with what's taking place as we go through this transition.
Transition Mark Yes, I think the other thing Mark obviously, the benefit of the big benefits of this transformation is the unit cost will be much lower than if we hadn't gone through it because before also the DXP contract in AWS was our cloud provider with much better economics now than we had before.
That's exactly what so youll figure that unit economics will scale in line, where maybe the unit the unit cost lower slower than the revenue scales.
That is true.
Perfect. Thank you very much and I appreciate it.
Thanks Mark.
Our next question comes from the line of Matthew Broome from Mizuho Securities. Your line is open.
Thanks, very much so hey, guys.
You spoke a bit about the impact enrollment, calling in bookings and cash flow.
Towards the start of the year.
Can I ask about the near term revenue implications as the revenues that you've already recognized.
As it relates to flight.
No.
Currently canceled.
And therefore that revenue it would maybe have to be backed out.
Particularly in Q1 is that is that fair to say.
No no the way to look at it.
When we gave you the monthly trends that you had in October November December Okay. What we're alluding to there was obviously, we had really good strong bookings momentum coming in out of out of October November and salt almost a 12 percentage point decline coming into December because that cash is not going to spill over and be collected in January same thing, we got off to a slow.
Start in January you saw that were only 31% recovery. Obviously, we now expect that to pick back up so youre going to have to slow months of collections because of low bookings that took place in December and January in the first quarter, if that's what you're alluding to.
Okay sorry.
Fair enough.
And then I guess in terms of your new agreement with.
American Express global business travel.
What are your expectations there in terms of how that could affect bookings growth.
<unk> timeframe.
Yeah. So one if you look at it.
Of that agreement is that.
The primary GDS and what we talked about the additional bookings going forward, so youre going to see a lift relative to the bookings that are taking place. When you think about amex GBT and what they're doing it's not only on the large corporate side of the equation, but it's also on the SME side of the equation. So.
What's important what's there.
If you sort of look at the discussions and I would even go broader relative to our discussions with other large TMC, but are out there. It's the technology technology capabilities, and where do we drive because we do think that this is an opportunity as it relates to the services and the technology that we have.
So it's not only from a amex GBT perspective that we think we can continue to get additional bookings, but by enabling other tncs. We think it's also important the thing that I can.
Paul out a little bit because this gets broader into just global.
Corporate travel recovery and there's there's a lot of discussion relative to what's happening on the corporate side.
I think it's important just to talk about the numbers and what we're seeing right now if you go back to the recovery on Covid.
We really saw the first two weeks of November probably the best recovery period, and corporate travel down about 50% versus 2019, as you would assume with omicron and the impact that did fall off so on a global basis, we are seeing probably those bookings down 60% 67, 65%, 67% at the beginning of January what we're <unk>.
Right now is again that momentum coming back that were sort of down 50% on a global basis, North American leading that so the reason I bring that up is we're a believer in corporate travel when we look at the relationship with Amex GBT.
Focused on there as it relates to the technology and it really does get into corporate booking tool capability. How are we thinking about merchandising and retailing and really for them is how do they make sure that they continue to serve their customers in a way that they need to be served.
Alright.
Thanks, very much John and Doug I appreciate it.
Thank you.
Our next question comes from the line of Josh Baer from Morgan Stanley You may begin.
Great. Thanks for the question.
I'm, just wondering in the 22% and 25 scenarios and assumptions.
What is embedded for the assumption around bookings mix versus pre COVID-19 levels.
Okay. So let me talk when we talk about 'twenty, two and then I'll go to 25%.
The guidance that we're giving you with regard to those ranges that we had the scenarios was basically based off of the booking mix that we had coming out of 2021. Okay. So it is still not a great mix for us Sean talked a little about corporate picking up but it really is not at the level of member before we always wanted to see kind of 50 50.
<unk>.
Or where do you have domestic versus international and $50 50 versus leisure versus corporate side, we're still more on the other side of work so closer to 70, 36% to $65 35 for those so it is conservative with regards to 2022 with regards to 2025, we've assume.
A good recovery back to normal what I would call international and domestic but only a 90% recovery of corporate travel we didn't expect the numbers of the guidance. We gave you does not assume the corporate travel all the way back to a 100% in 2025.
Okay. That's really helpful. Thank you and.
Just to confirm in those frameworks for recovery when you are talking about percentage of bookings.
Is that just looking at 2019, you reported bookings numbers and taking the percentage off of that or are there any adjustments or.
The lost Expedia business or any other changes versus 2019.
It's literally just off of the 2019 fully reported bookings number.
Okay, great. Thanks, guys.
Thank you.
Our next question comes from the line of Neil steer from Redburn you may begin.
Hi, Thank you very much for the opportunity.
Question just following on from the last question actually.
Any could you quantify what was the expedia.
Sure impact that we saw on the booking volumes in the fourth quarter could you just because of some sort of flavor on that fleet.
Neil I mean, I'll go back to what we talked about.
I think it's really more focused on 2022.
$15 million to $20 million and EBITDA impact.
We're sort of immaterial relative to what happened in the fourth quarter relative to where they've settled and what we're seeing in the first quarter.
Okay. Thanks, very much and then just on the Amex GBT.
Partnership you talked a great deal, obviously about the technology investments, you're making and how they're on some joint investments being made there.
And the broader opportunity amongst other tncs.
Do you have the opportunity to take.
The platform and the solutions, we are developing in partnership with Amex, GBT and sell them to other TNC. So we've done a large cost to that Julien.
I'm blessed to remain proprietary to <unk>.
Now what the way that we have entered these discussions that they would be available to the ecosystem in total.
Okay. Thanks, very much and could you just give a little bit of flavor on the airline item, obviously that was a little bit of sort of <unk>.
<unk>.
Of carriers that we saw over the course of 'twenty, one what's the pipeline for airline it.
Renewals and new business opportunities.
Yes, it's actually probably down the low cost carrier side. This is an area that we're focusing on quite a bit it's been a lot of action there Neil in what is taking place I think if you look broader because it's something that sort of pushed the team on is if you look at where we entered.
Where we were in 2019 as it related to total Ppas I think.
780 800 million Tvs.
And I always sort of referenced back to that.
If you look at where we are now with what sort of referencing what youre talking about.
We are net up as it relates to <unk> and what's taking place. So I feel good about where we were in 2019. This I assume everybody gets back to 2019 levels that you've got to use that as the base.
As we look into the future I would say.
There is more activity definitely on the low cost carrier side, if we look at full service carriers.
Really what we've seen historically, there's renewals that are taking place that we worked through these other opportunities that we try to advance on but it's sort of similar to what we've seen historically Neal.
Okay. Thanks, very much thank you.
Our next question comes from the line of Jed.
Jed Kelly from Oppenheimer, you may begin.
Hey, great. Thanks for taking my questions just going back to the technology investments and the roadmap you are laying out for the Google cloud.
Can you discuss how these investments are going to improve your win rate or what we should expect for new business opportunities as you start to scale. These technique.
Technology costs.
Yes.
I'm happy to answer that question, because it's really important in what we're doing when you think about it first and foremost that goes back to just what it's going to do with the underlying cost structure.
The information that we provided it gives you a lot of detail on that decision side, but it really does get into some of the things that Doug had highlighted and I've highlighted is really if you look at it from the faster time to market with things that we can do if you look at it again on the facility side, but.
I look at the development side, and what we need to do and what ends up taking place and there's things that are happening I can tell you specifically believe win on the hospitality side is the ability to actually have landing zones in Europe and as we continue to think about this this becomes very important across the board not only in hospitality and airlines, but also on the Otas.
Side, because they are so focused on speed and what's happening.
The other reason I think it differentiates us and we don't get asked this question a lot, but we do believe we're ahead and you look at technology transformation and organizations like ourselves that are going through it.
Embarked upon this really beginning in 2019, we've had recent announcements by two of our competitors that they are going down the same path wells. They are really going to do what we're doing I guess, what they're going to have to invest as well and we think that we're well ahead in what's taking place in the capabilities that they provide.
Our setting this organization upper essentially what we've outlined in 2025.
Im really pleased with where we are we've kept our head to the grindstone as it relates to just continuing to manage through this.
As we gone through the pandemic.
Thank you and just following up you said in your 2025.
Business travel getting back to 90% of 2019 levels.
And those assumptions, whereas leisure travel relative to 2019 and mix going through the GDS versus <unk>.
I will say, obviously if business travel it doesn't come back fully.
<unk> flow over the leisure side.
Do you have an update though do you think it will so it's 20%.
Can you provide like what the met.
So if you think about.
<unk> told you before the basic breakdown between corporate and leisure was roughly 50 50. So can we get back to 90, then the other 10% is going to flow over so.
So that's you can calculate that.
Alright, thank you.
Thanks, Jeff.
And once again garnered one questions. Our next question from the line Cheng from Bank of America. Your line is open.
Good morning, Sean.
Thanks for taking my question are you able to.
I'll provide some more color on the commercial update.
You signed more MDC distribution agreements with airlines.
And then secondly.
Some more color on the booking fee at Columbia.
Q4 is.
If I see currently is about corporate levels. Despite more domestic mix. So how should we think about this going into 2022.
Yes, Victor I'll take the first question on NBC and pass the second question off the dog there continues to be an enormous amount of engagement with carriers around the world.
It's not only on new agreements, but it's also I guess on the capabilities and building out the capabilities.
Again, as we went through the budget process. This year Theres a whole host of things that we're getting an accomplished to make sure that one.
You could actually have those capabilities, which are actually able to do it at scale and Thats one thing thats there so.
As it relates to just additional agreements.
Off the top of my head I don't have them I know the team has been doing a lot of different things there. So I feel good about the progress that we're making.
Yes, sure and with regards to average booking fee. It's a combination of things you alluded to one it partially.
<unk>.
Lower than we have expected bookings that we get from Expedia and also higher a little bit higher corporate international bookings, so kind of split one third one third one third if you want to take a look at the differential between the rate in Q3 and the rate that we ended up in Q4.
Gotcha and then maybe.
Maybe just one final one I think you have alluded to it just now.
On the if there is any updates on the Expedia bookings.
I guess you were saying that it's broadly in line with what you have communicated in Q3 is that correct.
Correct Thats correct, yes.
Gotcha, that's cool.
Okay.
Thank you I'm not showing any further questions in the queue.
Thank you turn it back over to Mr. Sean <unk> for any closing remarks.
Great. Thank you very much well as you can see we have continued to move forward on our technology transformation.
As I look at 2022, and whats happening we are definitely looking into the future really finishing what we started because there is a enormous amount of.
Financial upside as it relates to the technology transformation, what we're doing but it's the capability. It's a it's going to allow us to.
To win in the marketplace and hopefully we will continue to see a nice recovery throughout the balance of the year and we look forward to talking to you again.
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