Dan Wasiolek

Dan Wasiolek asked about Sabre's AI tool development, what remains to be done on the AI front, and the potential upside opportunities from AI that were mentioned in the prepared remarks.

Answer

Garry Wiseman, President of Product and Engineering, explained that the next stage for AI in travel is demonstrating an end-to-end conversational commerce experience, as seen with the Mindtrip and PayPal partnership, covering discovery, planning, booking, payments, and servicing. Kurt Ekert, President and CEO, added that Sabre's existing data, content, and capabilities make the agentic layer an extension. Kurt compared the emergence of agentic travel to online travel agencies (OTAs) as a new, rapidly growing channel, presenting a substantial offensive opportunity for Sabre by impacting supplier direct, metasearch, and OTAs, where Sabre holds a distinct market advantage.

Dan Wasiolek asked about Sabre's progress and future plans for AI tool development, how it strengthens the network ecosystem, and the potential upside opportunities from AI initiatives.

Answer

Garry Wiseman, President of Product and Engineering, emphasized the goal of demonstrating an end-to-end conversational commerce experience in travel, citing the Mindtrip and PayPal partnership. Kurt Ekert, President and CEO, added that Sabre's existing data, content, and servicing capabilities simplify the integration of the agentic layer. Mr. Ekert further explained that agentic travel is expected to emerge as a new channel, similar to OTAs, presenting a significant offensive opportunity for Sabre by potentially impacting supplier direct, metasearch, and existing OTA channels.

Dan Wasiolek inquired whether the forecast for slightly lower gross margins in 2025 was a result of the mix of new business or a change in the competitive environment regarding incentives.

Answer

CEO Kurt Ekert clarified that the margin change is not due to a shift in the competitive landscape but is driven by the mix of new business, which includes a higher proportion of NDC and LCC content. He stressed that while these have a lower average booking fee, they are highly accretive from a gross profit dollar perspective and contribute to significant overall EBITDA margin expansion.

Dan Wasiolek asked for details on the normalized April RevPAR decline of 1%, seeking a performance breakdown by leisure, group, and business segments. He also requested clarification on whether the '40% business' mix metric was based on revenue or room nights and if it included group travel.

Answer

CEO Patrick Pacious explained that the April data was difficult to analyze due to distortions from the prior year's eclipse and the Easter calendar shift. He reiterated that their optimism is based on fundamentals like high employment and low gas prices. He then clarified that the 40% business mix figure is a revenue-based metric, and that group travel, which is a mix of business and leisure, accounts for about 10% of total delivery.

Dan Wasiolek inquired about the tangible impact of the Infrastructure Act, asking if the company has seen an incremental room night benefit in areas with active projects and which hotel segments are the primary beneficiaries.

Answer

CFO Scott Oaksmith confirmed they are seeing benefits, noting that 38% of their hotels are in the top 10 states receiving infrastructure funds, with a particular impact on the extended-stay product. CEO Patrick Pacious added that the benefit is broader, as project managers and engineers also drive demand for transient-oriented hotels.

Dan Wasiolek of Morningstar asked about the innovative technology solutions Wyndham is providing to owners to help them lower costs and increase top-line growth in the current environment.

Answer

CEO Geoffrey Ballotti highlighted the company's $300 million investment in a cloud-based tech stack with partners like Oracle, Sabre, and Canary. He emphasized an opt-in approach for franchisees, citing high adoption for services like a centralized reservation service that improves conversion and ADR, and revenue management services that lift occupancy. He also mentioned free services like OTA reconciliation and new monetization tools through Wyndham Connect for early check-ins and late check-outs, all of which are key parts of their value proposition.

Dan Wasiolek asked for an update on the long-term revenue opportunity from infrastructure spending and inquired about how AI might influence the company's direct versus indirect distribution mix.

Answer

CEO Geoffrey Ballotti reiterated the significant, multi-year revenue opportunity from infrastructure projects, noting only a fraction of disbursed funds have been spent. Regarding AI, he explained that Wyndham's modern tech stack enables innovations like Wyndham Connect, which uses AI to automate tasks for franchisees, enhance customer service, and create new monetization opportunities like selling upgrades and amenities, thereby strengthening the direct channel.