We’re creating a more connected travel industry, underpinned by sustainability and long-term investor relations.
Wow, what a year. We’ve had a bumper harvest of articles and reports trying to predict the future of travel distribution. In this sea of opinions, Dr. Graham Floater’s report from the London School of Economics stands out as a significant contribution to the debate. Questions have indeed been raised about capabilities, technology choices, and business models. Some airlines are experimenting with alternative distribution routes, while others are coming back to a GDS or coming to it for the first time. In parallel, travel agencies of all types are trying to navigate through these choppy waters.
As I reflect on our own role within the industry today I am reminded just how much has changed. It was once the case that Amadeus’ distribution business was irrefutably a ‘Global Distribution System’. Our technology enabled travel agents to book a flight for their travellers, on behalf of an airline. But the nature of travel commerce has since expanded significantly, and so have we as a technology company serving the industry.
One of the fundamental value shifts we have witnessed has been the move from processing demand – executing transactions on behalf of providers, to creating demand – generating business for providers. The GDS has traditionally focused on executing transactions. The world of demand creation has exploded with the need for digital traffic acquisition and lead-generation; shifting the focus from booking to converting.
Of course providers would like all their customers to come directly to them. Who wouldn’t? But a consequence of this shift has been an increase in the number of intermediaries between consumers and providers, not a decrease. Indeed it’s no longer only about “direct” or “in-direct” channels, but rather intermediated channels. Where consumers can end up buying provider services from a variety of pathways, be it travel agencies, metasearches, digital advertising, search engines … And for these different pathways, different types of technology and services need to be deployed in a cohesive manner. This is where we, Amadeus Distribution, are today. No longer just transacting, but generating business for providers.
A recent relevant example that exemplifies this change is ‘Metabooking’. Amadeus technology now facilitates bookings directly on metasearch sites, which improves the traveller experience whilst reducing lost referrals for the airline. It’s a win-win: booked by an intermediary yet owned directly by the provider.
And as always we service both sides of our network through this shift. For example, we recently made technology available to KAYAK to deliver highly accurate flight search results in milliseconds
has everything to do with traffic acquisition, conversion and user experience – enabled by cutting edge IT. To make Instant Search a reality Amadeus engineers have pioneered the application of advanced database functionality from MongoDB.
No customer acquisition programme would be complete without the ability for a brand to advertise and promote itself. Our combined advertising assets ofMedia Solutions and Travel Audience mean that Amadeus today is a major facilitator of advertising for airlines, airports and destination marketing organisations. We help them target and engage travellers across digital intermediaries, travel agency interfaces and even physical travel documents.
Furthermore, the last few years have ushered in the era of merchandising. By the end of this year we will have seen a 70% year on year increase in airline ancillaries sold via Amadeus travel agents and more than 40 OTAs delivering improved shopping and comparison features to travellers through our merchandising technology. Our new rich merchandising features enable airlines to display their compelling offers across travel agency screens and OTA interfaces.
All this seems far removed from the historic view of a distribution system. So when you stop, breathe, and take stock, you realise just how much Amadeus is doing in the digital distribution space to connect airlines with travel sellers and travellers, and how far gone the days are of being “just a GDS”.