Lee Hayhurst talks to the GDS’s marketing and distribution vice-president about graphical interfaces, the growth of mobile, and emerging models for agency tech
As even the mighty Google found with its Wave real-time communication tool, any technological innovation can come a cropper in the ultimate test of its credentials – the level of adoption.
While technological innovation can take place at break neck speed what’s greeted with whoops of delight at launch by aficionados can quickly lose its lustre in the uncompromising court of public opinion.
However, following its flotation on the Spanish stock market in April, Amadeus has no intention of letting up in its drive to become as much a travel technology provider as a distributor of airline fares.
Ian Wheeler, the GDS’s marketing and distribution vice-president, can’t hide some frustration at the speed of technological take-up in travel, but takes a pragmatic view about what can be achieved.
Wheeler was talking to Travolution about the level of adoption of new technologies in travel and, in particular, how many agents stick rigidly to using cryptic formats when there are more modern, so-called user-friendly, graphical user interface (GUI) alternatives available.
“Internally we used to try to predict when cryptic would come to an end; now we think realistically it won’t,” he said. “The reality is we live in a hybrid world.
“For things like uploading consumer profiles and for difficult bookings, agents are using GUIs; for simple, faster bookings they are using cryptic.”
On the face of it, GUIs should make life easier, ending the need for agencies to spend hours training staff to absorb the coding language needed to make a booking.
Yet for agents who know the codes, typing them into the Amadeus system is faster than grabbing the mouse and clicking a button.
Also, Wheeler said, many agencies have hardwired cryptic into their systems, adding bespoke functionality and in-house business rules on top of it.
“What is not great for a technology provider is to maintain multiple technologies for the same function,” Wheeler said.
“Where we have produced a new product which is more efficient on a GUI, we are keen to show that value. I’m more concerned with the multiple mobile platforms and changing infrastructure on the web than agent desktops.”
In the mobile arena, Wheeler expects adoption to be much speedier than was originally the case with the internet, and he expects the channel to establish itself as an important part of Amadeus’s business.
“We’re pretty excited about mobile. It’s probably going to go through a three or four-year evolution.
“Today it’s very much informational. But exposing other services on mobile will be very important over the next three or four years.
“The internet probably had a good 10-year adoption curve; mobile will be faster.”
Wheeler believes mobile could provide the answer to one of the big issues GDSs like Amadeus are grappling with today: the proliferation and growing importance of ancillaries.
“Mobile could be generating a reasonable share of what are today agency service transactions,” Wheeler said.
He added that Amadeus, given “the [low] margins on which airlines operate”, fully supported the move towards driving revenue through ancillary growth and premium fare packages.
But he said it was important that the industry adopts standards so the customer is not bewildered by the choice on offer and is able to make a fair comparison.
“We are supporting standards in the industry very heavily. We are collaborating with ATP standards and we have additional functionality for delivering these services which will allow the ability to compare apples with apples.”
And this is something that could see benefits all round, Wheeler believes, not least in staving off outside intrusion from regulators and bringing in an “additional cost layer to the industry”.
“Airlines that are offering a very good value-added premium service want that displayed in the point of sale to differentiate themselves. Our message is the more you can adopt standards the more these valuable services can be displayed to the benefit of everyone.
“The consumer wants to buy the most relevant product that meets their needs; and that is not necessarily the cheapest, it’s the best value for money.
“That’s why we launched Flex Pricer and Fare Families that allows you to bundle the fares from brands in families. In the future you will be able to bundle ancillary services. When given a choice, consumers often take something that’s not the lowest price.
“We have seen airlines, offering the ability to compare pricing flexibly, have been able to secure better average tickets prices. This is because consumers, faced with choice, were saying that for an extra £20 they would rather fly on a fully restrictive fare going out and a more flexible one coming back.”
Extreme Search launch
This move towards more flexible, tailored search functionality is not limited to the corporate traveller. Amadeus, through its Traveltainment subsidiary, is this autumn about to start long-awaited trials with leisure agents in Europe on Extreme Search technology.
“We feel we have something special and that’s one of the reasons we have put so much development into the back-office system,” Wheeler said. “We have a platform that can respond to very sophisticated enquiries in milliseconds.”
As with all technological advances, the degree to which it is embraced will depend heavily on how much it makes life easier for the user, and to that extent it has to be intuitive and easy to use. There is no point adding functionality for the sake of it, Wheeler accepts.
Amadeus’s success relies on proving its worth to its customers – both airline content providers and agent retailers – by providing solutions that automate menial tasks and allow their human resources to concentrate on those elements of the job that can’t, or shouldn’t, be automated.
“Fundamentally we make our money through transaction fees,” said Wheeler.
“We invest a lot of money maintaining travel agencies’ front-office system. That’s a significant cost of operation and we charge for that on a transaction fee back to the provider when a booking is made.
“We understand that most providers would love to pay a lower variable cost but most customers worldwide are comfortable paying a fee for that service and we do not see a tremendous push towards them not valuing that service.
“All content deals are deals where the travel agencies do not pay for content. That’s a model that works as long as the provider sees a value in the service they provide.
“At the same time, we are providing more technology to agents where we think these products carry value and there is a transaction associated. We see a world where we provide multiple services and each service provides a transaction fee.
“We are searching constantly for new transaction for our customer base where there is a value. It’s not easy to spot those things but that’s what we would like to do. We have, for instance, automated a lot of functions that were done on the telephone but are now done online.
“However, I do not see the human touch going away. It’s something we try to do inside our own business: automate the more simple functions, while leaving the more complex to be handled by humans who can add value, and this service is paid for and respected.
“As a consumer if you are buying a product that’s emotional like a holiday you want that assurance that you made the right choice. The basic selling price and need for options and assurance is never going to go away.
“This is a difficult business from a margin perspective and we need to help our customers save costs where they can.”
For Amadeus the answer to firms’ technological needs is to buy into a community of users all of whom benefit from advances and share costs as part of their licence agreement.
Wheeler estimated that firms only require to have 20% of their technology unique to them to ensure a competitive advantage. The key is how they use it.
Amadeus, with its reputation as one of the ‘dinosaur’ GDSs, still has some work to do to persuade many firms of this. “It’s a complex and difficult decision to migrate,” Wheeler said.
“It’s a perception that we are changing. Are we fully there yet? No. However, many of the world’s travel agencies and airlines have decided to trust us with a high degree of their technology.
“We still have a way to go to persuade many other travel agencies of that.”