Ladies and gentlemen, welcome to the Amadeus full year 2021 presentation webcast. The management of Amadeus will run you through the presentation, which will be followed by a question and answer session. You can ask a question on the phone by dialing zero-one on your telephone keypad at any moment during the presentation. I am now pleased to hand over to you, Mr. Luis Maroto, President and CEO of Amadeus. Please, sir, go ahead.
Good afternoon, ladies and gentlemen, and welcome to our 2021 fourth quarter sales presentation. Thanks a lot for joining us today. Till is here with me. As usual, I will focus on our most important business developments in the quarter, Till will elaborate on the key financial aspects. Let's start on slide four for an overview of our results. In the fourth quarter, global air traffic continued to improve. IATA reported air traffic evolution in October of minus 49%, relative to 2019, minus 47% in November, and minus 45% in December. In this context, despite the effects of the Omicron variant, our volumes performance in the fourth quarter continued to improve over the third quarter. The stronger volumes of sale growth and strengthening of our financial results, with improving revenue and EBITDA growth supporting free cash flow generation.
In the fourth quarter, Amadeus generated group revenue of EUR 810 million. This is 40% below the fourth quarter of 2019, advancing eight points from the level we saw in the third quarter. The progress in revenue performance relative to prior quarter was driven by improving revenue growth across our three segments. EBITDA performance also continued to advance, improving almost 10 points over prior quarter's performance with EBITDA, excluding cost saving implementation costs amounting to EUR 222 million, in the quarter. We generated free cash flow of EUR 137 million, in the quarter. Excluding cost implementation costs paid, free cash flow amounted to EUR 178 million and EUR 234 million in the full year. As volumes continue to get better from here, we also expect our free cash flow generation to improve.
We have now completed the fixed cost reduction plan we had ongoing over the last two years, 2020 and 2021, which has accelerated our progress towards profitability and cash generation. I'm pleased to say that in 2021 and compared to 2020, we have accomplished a total fixed cost reduction of EUR 128 million. Therefore, compared to 2019, our fixed cost reduction has amounted to EUR 635 million, exceeding the EUR 550 million target we had originally set out for ourselves. Till will elaborate more on this topic later. Finally, in the quarter, we had adjusted profit amounting to EUR 38 million, again, a positive quarterly result. To recap on our performance, we believe things are moving in the right direction. We are making good progress.
For the first time since the start of the pandemic, we have cut costs and CapEx growth in the fourth quarter versus 2020. This is as anticipated and in part because our R&D activity has started to pick up at Amadeus. As you may recall, in early 2020, we reviewed and prioritized our investments to focus on our most strategic projects. Even so, over 2020 and 2021, we continued investing for our future. We have been accelerating our migration to the public cloud, investing in our hospitality platform, NDC, airline IT merchandising and digitalization, airport IT, among others, while we have continued implementing new customers across our businesses. In the last quarter of 2021, we have seen R&D growth relative to prior year, and we expect this growth to continue into 2022, as we further advance in our investment programs.
Please now turn to slide five for an industry and volumes update. In the fourth quarter, we saw progress in our volumes. Our travel agency air bookings declined 49% in the quarter compared to 2019, advancing nine points from prior quarter, despite a slowdown in December caused by the Omicron variant. As you can see, our bookings evolution deteriorated in December. However, bookings in January and February, have shown a continued improvement from then, with bookings during February month to date at 37% below 2019. In the fourth quarter, all our regions reported air booking performance improvements, compared to the performance prior quarter. North America continued to be our best performing region in the quarter, where we had a -20% evolution, a 13-point improvement over quarter three.
It was positive to see that Asia Pac region, where we have seen the smallest air traffic recovery since the start of the pandemic, this is excluding China, deliver a notable improvement in this quarterly performance. APAC is an important region for us, and we will benefit from its recovery as it happens. In the fourth quarter, the GDS industry was 50% lower than in 2019. Our global market share expanded in the quarter by over one point, despite regional mix not playing in our favor, as North America has been outperforming the slower regions such as Western Europe and APAC, where we are important providers. Our volumes performance in the quarter was supported by market share gains in many regions, most notably in North America. Moving on to our passengers boarded.
In the fourth quarter of 2021, Amadeus PBs contracted by 43% versus the fourth quarter of 2019, up eight points over past quarter's performance. Several regions reported large improvements in performance versus the prior quarter, such as Western Europe, Asia Pacific, and Middle East and Africa. North America continued to be our best performing region with a -12% PB evolution in the quarter versus 2019. In January and February, the PB evolution has deteriorated from December, impacted by the Omicron variant effects. Regarding our third segment, which includes hospitality and payments, as you know, we did not report a KPI because the weight of the transactional revenues is a lot lower in this segment, and there is no one single operating metric driven or driving large parts of revenue, and given the wide breadth of solutions we offer, particularly in hospitality.
Nonetheless, the global hospitality market continued to advance during the fourth quarter, although it was impacted by the increase in COVID cases from the end of November. The quarter started strong, with worldwide occupancies close to 90% throughout much of the first half, peaking in mid-October. From the second half of November, occupancy rates started to decline. Between Christmas and New Year's holidays, occupancy was higher than the same period in 2020 and 2019. Throughout January, worldwide hotel occupancies have remained in the mid-40s range, below January 2020 occupancy in the 60% range. Let's move to slide six for the quarterly business update. We have continued to expand our reach across our businesses. In Air Distribution, we signed 26 contracts of renewals, of distribution agreements with airlines, including Delta, amounting to 77 signatures in the year.
Progress in relation to our NDC strategy continued through new agreements signed with Avianca, Malaysia Airlines, and Emirates. Amadeus today has over 20 airlines signed for the distribution of NDC content through the Amadeus Travel Platform. Additionally, we announced the completion of American Airlines' full end-to-end workflow integration of NDC technology for points of sale in North America. We also continue to advance on the travel agency front, with a number of travel agencies signing for access to NDC content via the Amadeus Travel Platform. In relation to Air IT, Hawaiian Airlines selected Amadeus as its next-generation technology partner and will be implementing Amadeus Altéa PSS as well as Traveler ID for Safe Travel and will connect to the Amadeus payment platform. Both Avianca and Malaysia Airlines renewed their Altéa PSS agreements and added several solutions from our portfolio.
Additionally, Norse Atlantic contracted Navitaire New Skies, and Aircalin signed for Amadeus Anytime Merchandising technology. As you know, Amadeus has created a range of solutions to support the recovery of travel. Traveler ID for Safe Travel is one of the solutions supporting self-service check-in by allowing passengers to verify their health documentation directly through the airline app or website. 18 airlines have implemented already this solution to date, including Aircalin, Air Europa most recently. In Air IT, we continue to focus our customer base during the fourth quarter of 2021. Heathrow Airport contracted Amadeus self-service check-in kiosks. Also, Cologne Bonn Airport signed for ACUS. We also continue to expand our footprint in the U.S. with Houston Airport System implementing Amadeus biometric technology at George Bush Intercontinental Airport and William P. Hobby Airport.
In hospitality, we're very pleased to announce in November, an agreement with Marriott International to deploy the Amadeus CRS. In the coming years, the Amadeus cloud-based CRS will modernize Marriott's proprietary reservation system and expand its commerce capabilities by enabling greater flexibility to travelers in choosing guest room attributes. We also continue to sign customers in the fourth quarter for other solutions from our portfolio. For example, Wyndham selected Amadeus for business intelligence, and Kalahari Resorts contracted for a service optimization solution. With this, I will now pass on to Till for further details on our financial performance.
Thank you, Luis. Hello, everyone. Please turn to slide eight for an overview of our revenue in the period. Our group revenue declined by 39.6% in the fourth quarter of 2021, relative to 2019, up from prior quarter, driven by stronger growth rates across our segments. In Air Distribution, revenue declined by 49.9% versus 2019, an eight point improvement relative to prior quarter. Revenue performance in the quarter was primarily driven by the bookings evolution Luis has just described and a 1.3% air distribution revenue per booking dilution impacted by the higher weight of local bookings in 2021 than in 2019, which, as you know, was produced by the faster recovery seen to date in domestic air traffic versus international air traffic.
This dilution was partially offset by contractions at softer rates than the air booking decline, in several revenue lines, such as revenues from solutions provided to travel sellers and corporations. The decrease in the revenue per booking, as we have been discussing throughout 2021, was within our expectations. I will add that for the full year 2021, Air Distribution revenue per booking ended up expanding by 1.4% over 2019. There are many factors impacting revenue per booking mix, the weight of non-transactional revenues, as well as the cancellation provision and various pricing impacts that come from inflation, new deals, renewals, and others. With regards to Air IT Solutions, revenue performance in the fourth quarter improved again over prior quarter, decreasing by 30.8% versus 2019.
This result was driven by the negative evolution in PB volumes compared to 2019, coupled with a 20.5% increase in revenue per PB. The expansion in the revenue per PB is caused, as you know, by the impact of a proportion of Air IT revenues, which are not linked to PB, such as services or airport IT, or other revenues which do not flex with PBs in the current environment, decreasing at a softer rate than PBs. For the full year in 2021, revenue per PB increased by 38% versus 2019. We've seen the expansion of revenue per PB over 2019 soften along the year. With lower PB volumes than usual, the weight of non-transactional revenues is abnormally high, producing this temporary expansion. As volumes continue to recover, we expect this revenue metric to gradually go back to its original levels.
This is a broad direction, considering that customers add more solutions, which, on the other hand side, supports the revenue per PB as well. Regarding Hospitality and Other Solutions, revenue improved in the fourth quarter relative to the past quarter, contracting by 25% versus 2019. Hospitality and Other Solutions revenues remain less impacted than Air IT revenues, by the effects of COVID-19 due to hospitality's higher weight of non-transaction-based revenues. Within Hospitality in the fourth quarter of 2021, quarter-on-quarter performance improvement was particularly seen in revenue lines driven by transactions, such as reservations revenues within Hospitality IT and media and distribution revenues on the back of progress in clicks and hotel bookings growth rates. In the year 2021, group revenue declined by 52.1% versus 2019, impacted by the COVID-19 pandemic.
The weight of transactional revenues within our group revenue has improved through the year, driven by the progress in volumes performance. The weight of transactional revenues in 2021, amounted to approximately 70%, progressing towards the 85% weight we had in 2019. Please now turn to slide nine for a review of our EBITDA evolution in the quarter versus the same quarter in 2019, as we've done with volumes and revenue. Please remember that for purposes of comparison, we exclude cost-saving program implementation costs. Also, when we turn to reviewing our fixed cost evolution and the rest of the P&L, we will focus on the change relative to last year, not 2019.
In the fourth quarter of 2021, our EBITDA, excluding implementation costs, amounted to EUR 222 million, a 53.9% contraction versus 2019, resulting from, first, the revenue evolution explained before, second, a 50.2% cost of revenue reduction linked to the air booking volumes evolution, and three, a 19.1% decrease in our combined personnel and other operating expenses cost line compared to 2019. Our P&L fixed costs in the fourth quarter, excluding bad debt effects and cost-saving plan implementation costs when comparing to the same quarter in 2020, were EUR 33 million or 8.6% higher as we had planned it.
The cost increase was driven by an increase in consulting expense resulting from the acceleration R&D activity as well as in travel and training spend, among others, derived from the business expansion relative to prior year. In the full year 2021, EBITDA amounted to EUR 628 million, resulting from the revenue evolution described, cost of revenue moving with air bookings and an 18.9% reduction in our combined personnel and other operating expense cost lines relative to 2019. I will elaborate further on this shortly. Below EBITDA, compared to 2020, D&A expense decreased by 7.7%, mostly driven by a lower amount of impairment losses, and net financial expense also declined by 7.7%, due to a lower average gross debt over the quarter.
Supported by the EBITDA evolution, adjusted profit amounted to EUR 38 million in the fourth quarter of 2021. Please turn to page 10 to review our cash flow evolution. I will start with CapEx. In the fourth quarter, CapEx increased by EUR 32 million or 27% compared to the same quarter in 2020. This was mainly driven by an acceleration in capitalized R&D investment. As mentioned before, we've seen R&D pick up this quarter, growing by 19.5% compared to prior year. This increase was led by works for our shift to cloud and customer implementations.
CapEx for the full year declined by EUR 41 million in 2021 or by 8.2% versus 2020 on the back of lower R&D capitalizations, in turn driven by a 10.6% decline in R&D investment, where we followed a selective approach and prioritized our investment, into the most strategic projects. Free cash flow, excluding cost saving implementation costs paid, amounted to EUR 178 million in the fourth quarter and EUR 234 million for the full year.
The free cash flow generation in 2021, was mainly driven by the expanding EBITDA evolution, a lower CapEx amount relative to last year, and the cash inflow from change in working capital. As you can see, we are very much in positive free cash flow ground for the year, with or without the cost saving program implementation costs paid. Please turn to page 11, for an overview of our fixed cost reduction plan, which we have deployed throughout 2020 and 2021, which is now completed. In 2021, we achieved a fixed cost reduction relative to 2020 together in the P&L and in capital expenditure combined of EUR 128 million. This represents a contraction of our total fixed costs of EUR 635 million versus 2019, exceeding our original target savings of EUR 550 million.
As explained before, our cost savings definition refers to the change in fixed costs, excluding cost saving program implementation costs and bad debt. We expect that around EUR 85 million, of these fixed cost efficiencies, mainly discretionary spend, come back as costs gradually throughout 2022. The fixed cost reduction achieved was supported by the simplification and standardization of a number of processes across our businesses, and corporate support areas. The acceleration of digitalization programs, the acceleration of the integration of past acquisitions, the acceleration of the adoption of safe and agile methodologies to be nimbler, and increase productivity, as well as internal reorganization steps, to allow for a more aligned way to work with our customers to focus more efficiently, more effectively on the growth opportunities. Also, our R&D investment and solutions portfolio, we reviewed reprioritizing investments.
These actions have allowed for a decrease in our workforce-related costs, driven by a net reduction in headcount, both internal and external, and across functions such as commercial, central support, and R&D, coupled with site mix efficiencies, in part, driven by the relocation of some functions. The actions also resulted in a decline of non-workforce related costs, such as, general and admin, training, travel, and advertising spend. Finally, there was a reduction in CapEx, such as in hardware and software investment linked to our shift to the cloud, and also related to our R&D optimization and the headcount contraction. Finally, with regards to the implementation costs associated with the fixed cost reduction program in 2021, we incurred implementation costs amounting to EUR 46 million, thus totaling, EUR 260 million incurred during the program.
Of these, EUR 135 million were paid in 2021, totaling EUR 169 million paid to date in total. The balance to the costs incurred is EUR 47 million. The majority of this amount will be paid in the first half of 2022. We've now completed the program, but going forward, optimizing efficiency, productivity, and returns will remain an important goal for us. Please turn now to slide 11. Before we finish, we would like to share the general views we have today for 2022. As you may expect, it is not possible for us to provide an outlook yet. Our top line evolution is highly correlated to the evolution of global air traffic, so our performance will depend first on how traffic evolves.
For 2022, IATA's last available forecast from October last year projects a global air traffic evolution of -40% versus 2019. This is just shown here as the industry reference. Throughout 2021, as you can see, the quarterly trend of our bookings and PB performance has clearly been positive, and we would reasonably expect to continue along that path of improvement into 2022. You can see how strong the recovery has been in February, where we reached month to date -37%, in terms of bookings compared to 2019. This trend obviously puts us ahead of what IATA had forecasted in October last year. Our top-line performance is also influenced by the relative speed of recovery between domestic and international traffic, as well as by regional mix, customer mix, and others.
Regarding our key revenue metrics broadly for the year, we can say we expect a continuation of the trends we've been discussing in 2021. For revenue per booking versus 2019, we would expect dilution of the underlying revenue per booking versus 2019, driven by an improving, but yet to reach normal levels of booking mix. There are other effects that impact the unitary, whose evolution is difficult to predict in this context. Thus, all in all, I'm expecting the unitary performance to be somewhat similar to what we had in 2021. Regarding revenue per PB, we should continue to see the slowdown in its pace of expansion over 2019's revenue per PB. In terms of cost, cost of revenue should continue to evolve largely with air bookings.
With regards to fixed costs, on one hand, we expect the EUR 85 million of excess savings in 2021, I've mentioned that before, to come back in 2022 with discretionary spend. Additionally, we estimate that P&L fixed costs and CapEx together combined, could grow by 6%-10% in 2022 versus 2021. These higher costs will be produced by inflation, and by growing R&D as we progress in all our investment programs, including cloud, but also to support a number of new customer implementation projects we are bringing forward. This 6%-10% fixed cost growth is broadly in line with our annual growth rate pre-COVID, albeit now with higher inflation. Therefore, our total fixed costs could grow by 10%-14% in 2022 versus 2021. This excludes cost saving program implementation costs impacting the P&L in 2021.
The fixed cost growth potential should come in a higher proportion through the P&L, likely to be approximately 75% through P&L and approximately 25% through CapEx, and is based on the assumption that volumes will continue to improve throughout 2022. Quarterly in 2022, this potential cost growth, would gradually ramp up through the year, as the new projects naturally ramp up, as business activity picks up, allowing for some discretionary spend to follow, and with pickup in April when we typically perform our annual salary review. As you know, a large part of our fixed cost base is personnel related, and it is important for us to attract, retain, and reward talent. As volumes continue to improve into 2022, we expect our free cash flow to continue to grow, benefiting from higher EBITDA and despite some CapEx growth in 2022 over 2021.
For Q1 2022, you've seen our volumes performance halfway through the quarter, so no need to comment on that. We would reasonably expect our unitary revenue metrics to be broadly similar to the prior quarter. In terms of fixed costs, we are probably going to have a fixed cost increase ranging between EUR 40 million-EUR 70 million, versus Q1 2021. This is including P&L fixed costs and CapEx and excluding P&L cost saving program implementation costs in 2021. Please note, we expect a negative effect from working capital on free cash flow, as we normally do in the first quarter, given that we collect in January, trade receivables from December, which in 2021, were impacted by the effect of Omicron on our December volumes. With that, we've now finished the presentation and are ready to take any questions you may have.
Ladies and gentlemen, the Q&A session starts now. If you wish to ask a question, please press zero one on your telephone keypad. Thank you. The first question comes from Adam Wood from Morgan Stanley. Please go ahead.
Hi. Good afternoon, Luis. Afternoon, Till. Thank you very much for taking the question. I've got two, please. Just the first one. I, you know, totally understand the level of uncertainty around volumes, and I think it's very helpful at least to have, some framework to start thinking about, you know, the revenues and costs for this year. Could you maybe just help us, like obviously the most uncertainty is on the top line, and things could evolve very differently. If we do get a much better or a much worse scenario in terms of volumes, how much flexibility is there in that cost base? Is that kind of set in stone and that would happen? Is there room to grow the cost a little bit more slowly if things do deteriorate?
Equally, on the other side of things, if things are a lot better, is that cost base level pretty fixed, and we'd have a lot of operating leverage if volumes came through ahead of those assumptions? Then maybe secondly, we saw during the quarter that eDreams put out an announcement, talking about their NDC initiative with British Airways and with IAG more generally. Maybe not talking specifically about that contract, but generally where you've got these contracts starting to happen, are you seeing that those NDC volumes, are being executed on GDS platforms, or are they starting to be executed on aggregator platforms away from the GDS? And is there a risk that as those volumes ramp, the volumes don't move back to the GDS if that is the case?
If you could just give us a little bit of help as to, you know, as the NDC volumes start to ramp, where, which platforms you're seeing that happen on, that'd be very helpful. Thank you.
I'll start with the cost question. You're quite right. What we've been trying to do in this environment is just give you a framework how to look at 2022. On the cost specifically, retaining the operating leverage that we have achieved is very important to us. In terms of flex in relation to different scenarios, I think it is fair to say that we can adjust cost as well. You've seen it also last year, where we obviously had been exceeding our set target of EUR 550 million by EUR 85 million, which kind of gives us as well a bit of a kind of room to maneuver as we look into 2022. The answer is yes, we have the ability to also flex our cost.
Likewise, of course, it is important to us that we continue to invest, secure also investment into projects that secure growth for the future.
Hi, Adam. With regards to the NDC of eDreams, I mean, direct connects may happen always, as you have seen in the past. There are different ways of accessing content, as we have said, and this is part of our strategy and part of the signing of contracts that we are having. We believe the GDSs are best positioned to really manage that. On top of that, the fact of being, you know, an IT provider is also having many advantages in the way you can operate with these connectivities or access of content of NDC. There may be always ways to really connect in different ways.
As I mentioned to you, I mean, direct connect has been here for a long time, but still the volumes we expect they will come through us, through the GDSs, and will be part of our normal way of doing. Saying that, there may be specific contracts that we will try, of course, to convince both parties that doing with us will be better from an economic and practical point of view and an aggregation point of view. That's our approach, but there may be specific points of direct connects in different markets.
Perfect. Thank you very much. That's helpful. Thank you. The next question comes from Stacy Pollard from JP Morgan. Please go ahead.
Thank you. When you look at air bookings recovery, for example, in February, what are you seeing from the corporate travel side? I know it's not perfectly delineated sometimes for you, but perhaps your TMC customers, you know, how are they doing, and then any impact from Russia, Ukraine situation, or is that quite isolated? My second question would be, and you wouldn't know it was me if I didn't ask about your hotel IT business. Marriott was a great win. What can you tell us about the timing or size of that deal? And then pipeline going forward, also on the PMS side, how's that going from a development perspective and also customer potentials?
Stacy, about please, Till, you can complement with the TMCs on the business. I mean, overall, we have seen a recovery in the different segments, and the TMCs are coming back to more normal percentage of the total. The recovery is more, I would say, even towards, you know, TMCs and retail. At the beginning, as you know, was mainly online driving the full recovery, and the weight of online was much bigger. But as things recover, we are coming back towards, you know, the figures of 2019. Still not there. Till, I mean, you, if you would like to add something, and then I cover the second piece, Stacy.
Look, exactly right. I mean, we have seen, obviously, and we've spoken about the trends before, where kind of initially the recovery was led by the online travel agencies. What we have observed last year and also throughout January and February, is there's pent-up demand. There's also pent-up demand in the corporate sector, and we do see this as well coming through the recovery in the TMCs.
With regards to hotel IT, I mean, look, Marriott, so far so good. We cannot talk about the specific dates. We are still discussing the whole roadmap. We have dates, but we cannot disclose that. As we have said, look, it should be in line with big projects that we have faced before in other parts of the business. You can assume that, but still exact dates, as I said, we cannot disclose. With regards to PMS, yes, there are debates ongoing. The product is evolving. We have a product that is ready for an important part of the inventory of the hotels. We are having discussions both on the CRS and also on the PMS.
As I always say, look, hopefully some of the discussions will become a reality, and we'll be able to announce, you know, additional customers, which is our goal. The agreement with Marriott, of course, we expect to have additional traction in the market, both for the CRS and then again convincing our customers on the PMS front.
Will you take the Ukraine question?
Thank you.
Ukraine. Yes.
Yes.
I forgot that. Would you like to take, Till?
Look, I mean, obviously this, we are concerned with the situation as everyone is watching it. In terms of the relevancy to our numbers from Russia and also Ukraine, it is comparably small, in terms of exposure from a revenue point of view. Obviously we are analyzing the situation, and a lot we're gonna depend upon, how the sanction framework will be laid out in detail. As I said, the actual exposure from a revenue contribution point of view in that we are observing now is fairly small. It is in the low single digit figures, basically.
For the time being, I mean, we have not seen in the volumes of the last days any impact. This may change, of course, depending how things evolve in the coming days.
Thanks.
Thank you. The next question comes from Sven Merkt from Barclays. Please go ahead.
Great. Good afternoon. Thank you for taking my questions. Can you comment maybe first a bit on pricing and inflation? In which part of the business have you increased prices or will increase prices? Where is it maybe more difficult because you're still making concessions to customers, or contractual terms don't allow it? That's the first question. Then secondly, you have EUR 85 million of non-structural cost savings returning this year. My question is, are you after that at full run rate costs or is there anything in the remaining cost saving that is non-sustainable?
Let me start with the first one, Till, and then you cover the cost.
Sure.
I mean, look, there is not a general answer. All the pricing, of course, our contracts allow us to really adjust, and it depends, okay? We have different contracts with different customers around the world. Of course, if there is further inflation, yes, we need to really consider that. Again, you have individual agreements, but there will be an increase related to the inflation that will apply. I mean, it's not everywhere, and it's not in all the areas, but in general sense, there are clauses related to inflation in the majority of our contracts.
On the EUR 85 million, I hope I understood your question correctly. Look, they are basically non-structural. This is how we differentiate it. What I expect is, you know, throughout the first quarter that we see already some of this discretionary savings coming back as cost. In terms of phasing, I would expect that it kind of ramps up throughout the quarters. Where does it come from or where has it come from as a savings on the savings side in the last year, that was largely driven by, you know, travel savings, training savings and these kind of areas.
Again, also here to my first point when I responded to Adam, we obviously have some ability to flex and manage this throughout the year, depending upon how we see things fit and need.
Okay. The question was more for 2023, if any other kind of part of these cost savings are non-structural and could return or if none basically at full run rate cost after that.
Okay. Look, the way to think about that is you start off last year with the structural part of the savings, which is EUR 550 million. You've got 55% of that coming through P&L and the remainder through CapEx. If you now go into 2023 and beyond, the way to think about it is we will have inflationary increases. That is what we always said. On top of that or apart from that, because our EUR 550 million cost savings target was linked to the 2019 scope of the business.
Wherever we go into additional and new businesses, new deals, substantial new deals and additional growth areas, I mean, if you think of like Marriott, the hospitality side also, of course these are investments that we would also allow to come through, because they come with additional revenue, additional contribution margin and growth. But we would always, you know, talk about those as well.
Okay. Very clear. Thank you.
Thank you. The next question comes from Michael Briest from UBS. Please go ahead.
Yes. Thank you. Good afternoon. Just going back to your reference to the IATA scenario. I think the detail is that they expect international travel to get back to 44% of 2019, and domestic to 93%. I don't know to what extent your unitary pricing assumptions factor that in, or if they don't, could you talk about how they would trend if that was the shape of recovery, so less than half international, what would that do to GDS fees? What would that do to BB fees? And then secondly, on CapEx, Till, I noticed on the Air IT side, you know, they're down this year from last year. What should we expect as, you know, I guess, more airlines on board? Where could that get to?
Similarly in hospitality, they're up from last year, EUR 81 million from EUR 53 million. Is that Marriott starting? How big could that number get? Thanks.
All right. Look, I think in terms of your observation, you're quite right. It is true that of course, hospitality and within there also Marriott, of course we continue to invest and that increases also the CapEx, the capitalization. That's correct and true. In terms of overall investment priorities, yes, it's hospitality that we continue to invest into. It's airline IT, it's NDC. It is of course our cloud program where we are getting into the second year, which is very important to us from a capability point of view. So without going into specific numbers, these are kind of the key investment priorities which you will then see also reflected in the segment capitalizations.
That's on that one. In terms of just the 2022 forecast, of course it is very clear that the recovery, is in terms of unitary metrics impacting as well on our booking mix. That's pretty clear. We have seen throughout the last year, the booking mix continuously improving. And I've commented as well in the fourth quarter when I just explained the unitary metric and that actually with the improving mix that we are seeing underlying, also the non-booking revenues have a less decreasing relevancy in it. So therefore, yes, it is dependent upon that. But in terms of IATA scenario, again, we've got several scenarios and several projections and different models how we look at it.
IATA's one I think is from October. That is the last available reference that they've put out. Again, if I just look at what we are seeing right now in terms of recovery, you know, I would also expect that IATA is issuing updated forecast at one point in time.
Are you saying until then that your unitary price guidance assumes a better international mix than IATA's?
Yeah, I would say that is fair.
Okay. All right. Thank you.
Thank you. Ladies and gentlemen, let me remind you, in order to ask a question, please press 01 on your telephone keypad. The next question comes from Paul Croft from Jefferies. Please go ahead.
Hi. Thank you for letting me on. I have just three, you know, relatively small questions. When I look at your cost assumptions for the full year, you know, it would signal there's quite a bit of confidence internally around growth. You know, to what extent does that incremental spend, you know, baked into your base case allow you to maybe decouple from the broader IATA forecasts? You know, the second question then, and I think this is a bit related to this as well, is that when, you know, I look at your performance relative to Sabre in the first two months of the year, you know, it seems that you're outperforming by a pretty decent clip, you know, your competitors.
It'd be helpful if you can, you know, maybe dissect how much of this is just underlying industry growth versus, you know, meaningful market share gains against the competitor. Just finally, I mean, is there any commentary you can give around the duration of bookings on the GDS? You know, has that gotten a little bit longer than what you've seen historically? I appreciate, with COVID, that those have become a lot shorter.
Let me start with the last two. Yes, we feel we are increasing share. I mentioned already for last quarter and in January and February this trend continues. We expect this to continue, as we are having a good performance overall. The answer is yes to that. Again, I mean, we usually, as you can imagine, don't talk about these details in the current actuals because still we have some way to go. January and February, we are increasing share. With regards to time, yes, there is an increase in inventory and therefore and you have seen the difference between the bookings and the PBs.
The PBs should catch up as we are seeing an improvement in the bookings mainly in February. This has translated into a higher inventory a bit longer than we usually have, and this is why our inventory has been increasing during the month of February. Yes, the trend is coming back again to pre-COVID, but it's still not there. With regards to the cost.
Let me quickly clarify. You said, you know, the cost increase, our confidence about it and that it would decouple, but I didn't get the point decoupling from top-line growth expectation or if there's a potential.
Basically what I was trying to say here is when I look at the amount of investment in cost reversals that are going through a business, you know, there is an expectation that there is a concomitant increase in growth. What I would like to understand is, you know, for the investment that you're making or the spend that you're unwinding, you know, how much of that should really translate into growth or allow you to outperform, you know, broader industry growth?
Look, I mean, I would say, we are very carefully assessing and validating the investments that we are doing, and they are focused on growth, across all of the three segments. We've got several new areas where we are with partners with Microsoft as well and others investing into future growth. Yes, we are fairly confident that those investments will gonna give us the desired return and will gonna allow us as well to grow ahead of the industry growth.
I mean, maybe as a follow-up, you know, do you expect that to kinda show within the next 12 months, or is this more of an 18- to 24-month discussion?
Look, typically, investments that we are going into, except when it is directly customer implementations at a very short scale. Customer implementations also take typically kind of more than 12 months. What we are benefiting here in 2022, is what we've invested in last year. I would rather lean towards kind of the slightly medium-term frame that you were using.
That's very clear. Thank you very much.
Thank you. The next question comes from Victor Cheng from Bank of America. Please go ahead.
Thanks for taking my questions. Two, if I may. Can you provide some more color on the revenue per booking? Clearly, you've talked about the mix of international versus domestic, corporate versus leisure, which is different from 2019. If we compare like for like, how has the booking fees trended across these various buckets? Specifically looking at Q4, are you able to break down some of the drivers here? I understand Expedia bookings likely would have diluted some of the revenue per booking, but are you able to comment on some of the offsetting factors maybe? Second question on NDC agreements. Again, can you provide some more color on unit economics with these new agreements? How many bookings are you seeing through these NDC agreements, and your expectation in 12 months' time? Thank you.
I'll start with.
Yes, please.
Revenue, with revenue per booking. Just recapping quickly, fourth quarter, we had a revenue per booking of EUR 5.08. That was a slight contraction compared to 2019. There was a swing from the third quarter to the fourth quarter. The third quarter still being slightly positive for the 2019 into the fourth quarter. Look, in terms of drivers, the underlying unitary or the underlying booking mix continued to help us, and it was improving. But likewise, an element which I always mention without quantifying in great detail, we had an increase in the cancellation provision as well in the fourth quarter. That is pretty simple. On the one hand side, our inventory levels grew.
On the other hand side, we had also, as you know, as you can imagine, due to Omicron, increased the cover ratio or the cancellation ratio that we provided for. That actually led to the slight contraction, coupled with the effect that our non-booking, revenue portion that we had been obviously benefiting in the past relative to the transactional side of the revenue has shrunk as well. These are the three effects.
Okay. With regards to NDC, look, the penetration is still low. We expect this to be low in terms of penetration for the coming years. If we take the overall volume of bookings, this will evolve and increase as the time moves on. Still, we are talking about a low volume of bookings overall. It will take time. I mean, we are in some areas implementing that as part of our contracts. Still there are a lot of parts of the inventory that will require time to really be implemented on NDC. It's still low volumes are not having an impact on our economics, positively or negative.
With regards to that, and you were asking about pricing and economics, again, I cannot talk about that. As we have always said, we expect to be neutral or positive to our P&L, okay? With different models and different negotiations with airlines, okay? More than that, it's difficult to disclose.
Okay, thank you.
Thank you. The next question comes from Neil Steer from Redburn. Please go ahead.
Morning. Thanks very much indeed for taking my question. It's just a very basic one, hopefully. There's been a lot of sort of question and discussion about business versus leisure travel and international versus domestic. At the end of the day, the thing that really drives your reservation fee on an average basis, is the home regional and away mix. Obviously you can have a situation in which you have a lot of business travel that's domestic, and you can quite equally have a lot of international travel that if it's booked in the home market, generates quite a low fee. Could you comment specifically on how the home regional and away booking mix has changed, and what that may do as we go through further recovery through 2022? Thanks.
Okay. Just as a reminder, 2019, we had basically 50% of our bookings kind of as local bookings and 50% in the regional and global category. Obviously, throughout the pandemic and throughout the crisis, that moved quite a bit into the direction of local. We have seen over the past eight, 12 months actually a continuing improvement of this booking mix. There was a step back, and I don't wanna stay away from that in December because of Omicron, but we have seen actually good traction, in terms of the regional, and also the global bookings improving again. What do I expect going forward for 2022?
I would expect that this trend is continuing, simply because when travel restrictions get further lifted in all regions, because remember, APAC, for example, is still a region where certain travel restrictions are in place, and that should, in essence, when it gets lifted in all regions, also flowing into the booking mix and normalize.
Okay. Thanks for that. Do you think as we get through 2022, it's realistic to actually expect by, say, the end of the year, to have a pre-pandemic balance of home regional and away bookings? Is that possible?
Look, I would say it might be a bit. That could be a bit early. I mean, look, we are optimistic in terms of the trends that we are seeing, but if you, there's still some way to go. Okay?
Very good. Thanks very much.
Thank you. Ladies and gentlemen, there are no further questions in the conference call. I will now give back the word to Mr. Luis Maroto for the final remarks. Thank you.
Thank you very much for attending the call. I'm looking forward to a positive and better 2022. Thanks a lot.