Volumes will be back in 2010 but yields will be slower to recover, says APAC President David Brett.
If there was one key lesson to be learnt in what has been a challenging year, it’s been “keeping the faith”, said Amadeus Asia Pacific President Mr David Brett.
He said, “It’s easy to say that now, it wasn’t that easy at the beginning of the year.”
At the beginning of the year, Asia was the worst hit among Amadeus’ markets. The global financial crisis was making its impact felt across the world and Asia was further hit by fears of Influenza A (H1N1-2009).
“The key is not to react too quickly. Hold your course. Have faith that it will recover.”
Asia recovering the fastest, Amadeus seeing growth
Mr Brett added, “We decided not to lay anyone off and we ensured that everyone was actively working on the future. We cut back in terms of costs of course, but we had faith in what we were doing and the feeling that we were doing something of value saw us through.”
Sure enough, Asia was the region that made the quickest recovery and now, Mr Brett is predicting that the region’s travel industry will make a recovery in 2010, going back to 2007 levels in terms of transaction volumes, although yields recovery will be slower.
According to MDIT data, up to September this year, Amadeus Asia Pacific grew its market share of travel agency bookings by two per cent to 33 per cent, and increased its market share of online travel by 18.8 per cent to 51 per cent.
The primary drivers of this growth came from Australia, Hong Kong, India, Indonesia and Malaysia. In a year where other companies were making staff cuts, Amadeus increased its staff force in the region by 15 per cent to 1,400 employees and opened two new offices – one in Koh Samui, Thailand and the other in Yangon, Myanmar.
Currently, Amadeus Asia Pacific’s travel agent base stands at 19,500, its hotel IT customers at 200 and airline customers at 92.
Mr Brett said the tough times allowed companies to realign and refocus and “it reinforced my belief that our industry is extremely volatile, but the silver lining is always around the corner."
Travel industry technology revolution underway
He also noted that change can be good. “It helps you to focus on new areas that can speed up change in the business environment and strengthen your business. The evolution that was happening in travel has sped up to such an extent that you could even call it a revolution.”
Citing the airline industry, he said full service carriers were operating on legacy software written 30 years ago. “That core system has defined the way airlines operate. When low cost airlines came along, they jumped an era.”
New technology has given people and companies freedom, he said. “Airlines, full service carriers included, are able to do many things – multi-channel distribution, merchandising and understanding individual customer needs and tailoring products and services so that customers will get what they want, rather than falling into a bucket.”
Innovating simple solutions for more informed, cost-conscious travellers
He said although economies were stabilising, cost awareness remains. Travellers are more informed, budget conscious and booking trips later. Revenues have been hit, but there are opportunities for change among airlines, he said.
He said that Amadeus has invested more than 3,300 man hours in research and development in 2009, “innovating solutions before customers know they need them.”
Asked what these solutions were, and if Amadeus was working on a revolutionary innovation that would do to travel distribution what the iPhone did for mobile phones, Mr Brett said, “We hope we can do more than what the iPhone did for mobiles – we are gong to be more open source.
“We want to open up, not make technology a barrier. We shouldn’t have complex systems that people need to learn; we want to free up the travel agent to focus on the customer. New technology should be easier to use, like the social networking framework which puts technology to the back.”
He said one key trend in 2010 would be more airlines moving towards outsourcing solutions. “Airlines have shown greater interest in outsourcing models to reduce high levels of fixed costs. By holding onto legacy systems, you put yourself at risk,” he said.
Sharing his vision for 2010, Mr Brett said airlines would continue to experiment with new distribution strategies. “Everyone is willing to pay a different price for a different service,” he said.
Other predictions: Travel agents will find their niche and focus on service, mobile innovations will continue to improve and the industry will turn to technology to overcome challenges, increase sales and differentiate their service.
