In this in-depth interview with Decius Valmorbida, the President of the Travel unit at Amadeus, we explore what travel might look like in the future, challenges we need to overcome as we rebuild our industry and the plan to help Amadeus customers leverage the latest technology to create better journeys for travelers around the world.
When do you expect travel volumes to recover?
This is a question I’m asked regularly and it’s hard to be precise, it very much depends on the region, segment of travel and many external factors beyond the industry’s control.
However, I do not believe this is the most important question for travel. Rather than volume, we should be thinking about ‘value’.
Can you elaborate on what you mean by ‘value’?
The travel industry has grown consistently for the past 30 years, during that time prices have fallen due to business model innovation and low-cost offerings. In a growing market, this was just about sustainable, but it couldn’t continue forever.
When it costs more for a fast food meal than an airline ticket the travel industry really needs to ask if it is delivering the value that travelers are willing to pay for. We need to tap into what’s valuable for travelers, plan it, collaborate and then deliver those services.
You describe COVID-19 as travel’s ‘black swan’ event, why is that?
Black swan events are unpredictable. They come along infrequently. And, they have severe impacts. I think we can all agree that COVID-19for the travel industry fits this description quite well. While causing significant disruption and in this case a great deal of human suffering, they give us pause for thought. Was the old way really the right way? Was the travel experience really that good? Was the industry economically sustainable?
Have you paused for thought as a result of COVID-19?
At Amadeus we have been working with our customers and partners to help navigate the impact ofCOVID-19, but we’ve also been thinking strategically about the long-term future of our industry. Specifically, how we can collaborate torebuild a better industryas travel emerges from this crisis.
How do you think we can rebuild travel?
Firstly, we need to reconsider the entire journey from the traveler’s perspective because we don’t believe travel was meeting its full potential as a product. The industry is siloed and the different players that work together to deliver a trip, from booking to destination, haven’t been able to offer travelers a complete end-to-end experience.
History shows us that if the experience is excellent then travelers are prepared to pay more for it. If people will pay €10 for a coffee, surely, we can grow spend per trip? We need to reset travel so it’s no longer a ‘race to the bottom’, but instead a ‘race to delight the customer’.
Hasn’t the industry tried this before?
Yes, the industry has long dreamt about services that could be conceived, sold and delivered across silos. Significant progress has been made, specifically on the merchandising and retail side of the business. But that isn’t enough because we need to be able to deliver on those additional services on the ground too and we need to do this across every different player involved in the trip.
For example, I’d like an Uber ride to be available as part of my airline shopping experience and I’d like that to work smoothly when I arrive at my destination airport, so I can walk out and get straight in my Uber. This can’t happen today because the underlying systems, and industry processes that govern them, cannot support that level of collaboration and end-to-end experience. But imagine if an airline’s Departure Control System was hooked up to Uber and to the rail operator at your destination?
Can we deliver this in the future?
It is already beginning to happen. So, yes. With collaboration across the industry, we can deliver this.
Over the last few years, we have gone through a gradual evolution to meet the changing needs of savvy travelers and to leverage the latest technology and innovations that are transforming society as a whole. Personalization, mobile, frictionless technology, chatbots, artificial intelligence, and robotics are just some of the technology that relate to what is feeding this evolution of travel. Since COVID-19, we’ve seen some of these trends accelerate so we can give travelers the confidence to travel in a new and better way.
TakeNDC for example. Despite COVID-19, we’re seeing great engagement across the industry todeliver NDCas it’s the foundation to modern travel retailing. NDC allows airlines, and in turn travel sellers, to offer more tailored services and ancillaries to travelers, driving more value for the traveler and more revenue for travel companies.
Perhaps even more fundamental is IATA’s One Order standard that provides the opportunity for a traveler to have one single digital representation of their order, incorporating any product combination.
One Order is a transformational change that means travel will soon be able to deliver on the potential of an end-to-end experience for the traveler, combining offerings from airlines, airports, rail, ground transport and many other areas. Ultimately, this will unlock a new era of travel that people truly value and are willing to pay more for.
What is Amadeus doing to support this change?
A first step we are taking to rebuild travel is to bring our various businesses focused on the trip itself together. That means our Travel Channels, Airline, Airport IT and Payments businesses are becoming one single unit dedicated to delivering on this end-to-end vision for travel.
Within this Travel unit, we will continue our technological evolution and build a new generation of underlying systems that aren’t constrained by historic industry processes. That deliver on the needs of travelers for a fully personalized experience across their entire journey. That give our customers the ability to pick and choose the right solution mix for them. That help our customers to collaborate, to identify and deliver those higher value services through collaboration.
Consider biometric identity at the airport, an emerging service experience that involves intimate cooperation between airlines and airports. In the near future, a fully biometric experience could become the norm. By removing complexity with cloud solutions that fully link airlines and airports together, we intend to unlock this type of value for our customers, and for travelers. This example can also be extended to car hire, rail and even hotel check-in but only if we truly think end-to-end.
Another example is content. There is such a wealth of travel content today. With so many options, the best bet for any great retailer trying to get the attention of the consumer is to be everywhere, be that online or offline. By bringing all the different types of travel content into the one platform – whether that be airline, hotel, car, rail, transfers, or destination-based content such as transfers – travel sellers, corporate customers, and travelers themselves will be able to tailor their trip to their liking. This is what we’re doing at Amadeus with our Travel Platform.
How do you think travel will look in ten years’ time?
Predicting the future is always a challenge but from the technology foundations being laid now we see an industry built around the traveler. An industry which supports individuals to easily tailor the trip experience they want based on their personal preferences.
We’re not going to be talking about a premium offering that begins when you board the plane and ends when you disembark. Instead, providers of travel will be more interconnected than ever before and will increasingly consider their role as part of the complete trip. We’re likely to see traditional service providers come together with sharing economy and digital native brands – all with the aim of best serving the traveler.
By 2030 the entire industry will be digitally transformed, and we will have delivered on those long-held dreams of a smooth trip at every stage of the journey.
To learn more about Decius Valmorbida, read hisbiography andfollow him on LinkedIn.
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