New research has found that travel agencies are missing out on significant revenue opportunities by not prioritising hotel bookings alongside flight reservations. Chinmai Sharma, global head, lodging, ground & sea for Sabre Travel Solutions, says the key barrier is not content availability, but a mindset change
Sabre’s research found that just 37 per cent of travel bookings include a hotel stay. What is the significance of this finding, and what is the impact on revenue opportunities?
Let me give you a little more detail. We recently conducted a study with select agency customers to identify opportunities both online and offline, which revealed a combined hotel attachment rate (HAR) of only 37 per cent. Considering this also includes instances where the traveller themselves requested flights and hotel upfront, we’re left with an even lower rate of agents proactively offering a hotel to the traveller.
Our findings highlight a significant untapped revenue opportunity for travel agencies. In our study, we found that the potential revenue uplift from improving HAR is substantial and can range into millions of dollars depending on agency size.
According to the Global Business Travel Association, global business travel spending was projected to hit a record high of US$1.48 trillion in 2024 and to exceed US$2 trillion by 2028. By not attaching a hotel to relevant segments, agencies are leaving significant potential revenue on the table.
What do you think are the primary reasons for this gap, and are there other ways to quantify this missed opportunity that may not be as obvious?
Many would be quick to say the gap or leakage is driven by the availability of hotel content. But it also stems, in large part, from traditional booking practices, where flights are prioritised, and lodging is more of an afterthought. We looked at the leakage of offline bookings from our study, for example (i.e. those made by phone or email) and found that the primary driver of low attachment was actually behavioural: agents simply not offering a hotel to the traveller when making a flight booking. Some agencies also lack the technology or data insights to measure HAR or offer personalised hotel recommendations at the time of booking.
Beyond missed revenue, this gap also represents a lack of adherence to travel programmes and a loss in traveller engagement and satisfaction. Travellers and buyers are increasingly looking for convenience, personalisation and duty of care. By failing to offer a complete experience, agencies risk losing travellers and buyers to other agencies that are better at this metric.
You say a mindset shift is needed for agents to think more like modern retailers. Why is this change important for the future of travel agencies, and what steps can they take to adopt this approach effectively?
The modern traveller as well as the modern travel advisor expect tailored recommendations and seamless experiences, similar to those they receive in retail or entertainment. For agencies to stay competitive, they must adopt a retailing mindset – using data insights and the right travel content to craft personalised offers. Today’s travel advisors and travellers expect a consumer-grade shopping and booking experience for their travel needs, without which they might look for travel options on other platforms that meet these needs.
Many agencies are already on this journey, and we are making it easier by offering scalable, modular solutions that fit businesses of all sizes. It’s not about overhauling operations overnight; it’s about adopting the right tools and practices, step by step, to align with modern traveller and buyer expectations.
For travel companies looking to invest in AI, where do you see the greatest return on investment, and what strategies are proving most effective?
There are significant efficiency, revenue uplift and personalisation opportunities throughout the travel ecosystem as a result of AI, which means travel companies that invest in AI are driving more cost efficiencies while improving buyer satisfaction. It really is a win-win-win.
There’s a return on investment for our hotelier partners – those who can get their content onto our Lodging AI platform, gaining greater visibility and enjoying higher booking rates as a result. There’s a win for our travel agency partners – those who get the content they need from over a million properties in our platform and can use real-time AI-powered solutions to compare, shop, book, and service that content effectively. Finally, there’s a win for the travellers – those who have greater ease during each booking touchpoint and get the personalised trip they want.
An internal Sabre study showed that agencies using Lodging AI saw a marked improvement in hotel bookings. By offering alternative lodging options when a client’s first choice wasn’t available, they were able to reduce abandoned bookings. In fact, when travellers clicked on AI-suggested alternatives, the likelihood of securing the booking jumped by nearly 14 per cent, and we continue to refine the learning model.
Lodging AI’s cross-sell functionality also allows agents to identify previously booked air segments that are eligible for hotel stays and offer hotel options through confirmation or trip reminder emails. This feature has been crucial in boosting hotel attachment rates even after the initial booking is completed, offering a new way to generate additional revenue for agencies.
What are the key trends and innovations you expect to shape the travel trade industry in the next decade, and how is Sabre preparing for them?
The travel trade industry will probably see some transformative changes in the next five to 10 years, driven mostly by technological, environmental, and social factors. In general, I expect a shift toward smarter, more sustainable, and consumer-centric travel experiences. As always, technology will play a key role.
In the AI and machine learning area, I expect to see advances in hyper-personalisation, predictive analytics, and transformation of AI-powered chatbots into sophisticated virtual travel assistants providing end-to-end trip management – including the ability to cancel and rebook during travel disruptions.
Any innovation or transformation will need more than just AI’s smarts; they will require openness, modularity, and, critically, the right data. These pillars will dictate how well AI and new tech integrate with existing systems, adapt to business needs, and deliver value across the diverse travel ecosystem. At Sabre, we continue to focus on intelligent technology, driven by extensive data sets, open, and modular, so that we can help our travel partners to adapt at a pace that makes sense for their business, and their travellers.
Any thoughts on other fundamental challenges you think still need to be addressed to create truly seamless travel experiences?
I think the ideal ‘complete trip’ concept is still elusive today for our travellers. A typical travel trip is made up of many travel components which still don’t talk or interact with each other, causing friction to our advisors and end travellers. The openness we’ve talked about is often overlooked. It’s not enough to develop AI-powered technology. That technology must also be built in such a way that it can be added to a host of different systems. When we talk about openness in travel technology, we mean designing AI solutions that integrate seamlessly with a wide array of platforms, systems, and data sources.
We’re not here to lock our partners into a one-size-fits-all approach or demand that their entire tech stack be powered by Sabre. Quite the opposite. The travel industry is incredibly diverse. We want to enable AI to fit into this intricate web without requiring disruptive overhauls, and always keeping the end traveller in mind.
