Online travel agents: Sun, sea and surfing | The Economist

economist logoIn 1996, when Microsoft was still ahead of the big technology trends, it launched a small brand called Expedia Travel Services. It hoped to persuade customers to book holidays online. It was not an immediate success. Few households had an internet connection then and, just as importantly, most people thought the idea of buying a holiday through the ether not to mention typing their credit-card details into a web browser plain foolish.

Few think the idea crazy now. Expedia, which Microsoft sold in 2001, has become the world’s biggest travel agent see chart. Last year, through brands such as Trivago, Hotels.com and Hotwire, as well as its eponymous operation, its gross bookings were $39.4 billion. The third-largest travel agent is also an online firm: Priceline, whose brands include Booking.com, made reservations worth $39.2 billion in 2013. Last year online travel agents OTAs had combined bookings of $278 billion, according to Euromonitor, a market-research firm.

Indeed, when it comes to reserving flights, hotel rooms and rented cars for holidaymakers, the online-travel market looks quite mature in many rich countries. PhoCusWright, another research firm, reckons that online booking now accounts for 43% of total travel sales in America and 45% in Europe. Since much of the rest is accounted for by business trips handled by specialist corporate-travel agents such as Carlson Wagonlit, scope for the OTAs’ market to grow seems limited. That explains Priceline’s purchase, announced on June 13th, of OpenTable, a restaurant-reservation website, for $2.6 billion: it sees this as a way to earn commission on another chunk of tourists’ spending.  There are some big markets where online bookings have yet to take off.   Germans still typically arrange their holidays through traditional travel agents. Although the Chinese now spend more on travel in aggregate than any other country’s population, in 2012 they booked only 15% of their trips by value online, says PhoCusWright.   It thinks this will rise to 24% by 2015, making the Chinese online-travel market worth around $30 billion.  Much of the expansion will be driven by ambitious local firms. Ctrip, the biggest, makes most of its money from air tickets and package tours to Greater China. But as Chinese tourists become more intrepid—ranging farther afield and no longer shuffling around in big tour groups—online hotel bookings are becoming more important.  Ctrip’s hotels division has grown at an average of 25% a year for the past five years, according to Trefis, a stockmarket-analysis firm, and had revenues of $366m in 2013. It will not be long before it eyes Western markets more keenly.

To stay ahead, the big OTAs are having to follow their customers as they switch from desktop computers to smartphones and tablets.  By 2017 over 30% of online travel bookings by value will be made on mobile devices, thinks Euromonitor. In part this will be the result of OTAs making their apps more appealing by, for example, adding location services that help travellers find the nearest rooms and restaurants. But it is also because the way people plan trips is changing. It generally takes a family more than three weeks to book a holiday, from deciding to travel to clicking the “pay now” button, in which time they may visit seven websites, says Faisal Galaria of Alvarez & Marsal, a consultant. In future, travellers are likely to become more impetuous, he says, and smartphones appeal to those making last-minute bookings.

For those still surfing for holidays on their PCs, other technological advances are on the horizon.  Amadeus, which supplies the software behind many OTAs’ booking systems, is developing new ways to entice customers to the agents’ websites. One is to use browser-tracking technology to aim personalised ads at consumers, showing them the latest prices for trips in which they had previously shown an interest. Such targeted advertising has been common among non-travel retailers for some time. However, until now it has proved trickier for the travel business as it involves collating frequently changing data from many airlines and hotels.

Gorilla marketing

Even with help from such marketing tricks, the smaller OTAs will find it increasingly hard to compete with the big two. Online travel is an industry in which size counts. The scale of Expedia and Priceline means they can sign up more hotels, and negotiate better prices, than their smaller rivals. This is a business that requires heavy spending on marketing, which hands another advantage to the big two.  OTAs will spend more than $4 billion this year on digital advertising, according to eMarketer, also a research firm; and Priceline and Expedia will account for over half of this. Some smaller rivals may find profitable niches, but in general it will be hard for them to grow. Whenever they open a door, “there are already two 800lb gorillas fighting it out in the room,” says Mr Galaria.

Not only gorillas. The observant may also spot an elephant in the room.  In 2010 Google bought ITA, a maker of flight-search software, and the next year it launched a flight-comparison website. The giant search company has also improved its hotel listings by including photographs and virtual tours, as well as price information. It has the clout to disrupt Expedia and Priceline if it so wishes. It has not done so yet. Google, many believe, would be loth to cannibalise such a large chunk of its main business: analysts think the big two will account for as much as 5% of its advertising revenue this year.

So besides Ctrip, perhaps the biggest threat to the big two OTAs is TripAdvisor, a popular travel-reviews site spun off by Expedia in 2011. This month it said travellers would be able to book hotels directly through its smartphone app. Weeks before Priceline’s deal with OpenTable, TripAdvisor announced it was buying La Fourchette, another online restaurant-booking service. The online-travel market is consolidating fast, but so far holidaymakers need not worry about a lack of options

via Online travel agents: Sun, sea and surfing | The Economist.

Shaping the Future of Travel in the GCC – a landmark FREE Report from Amadeus

Shaping the Future of Travel in the GCC – a landmark FREE Report from Amadeus.

It has been an absolute privilege today to take part as the moderator in the launch of a landmark study and event organised by Amadeus.  Their new report on the Future of Travel in the GCC is undoubtedly one of the best ever and most important travel industry related reports conducted in the region.

Drawing on the expertise of industry leaders across 22 travel brands and insights from over 1,000 end travellers this report describes the key effects that will shape the future of travel for this exciting and important part of the world.

amadeus new logo on blueThe headline “Big Effect” is that rapidly changing demographics will fuel a major shift in GCC travel over next 15 years.  The coming-of-age of the GCC’s youthful population will reshape the travel industry in the region over the next fifteen years, as digital natives instinctively turn to mobile technologies and social media to plan, book and manage travel.

Today, nearly 25% of the GCC population is under 15 years of age, and as this demographic becomes tomorrow’s decision makers, it will shake up traditional behaviours to become increasingly self-directed. As outlined in the Amadeus-commissioned new report, Shaping the Future of Travel in the Gulf Cooperation Council (GCC): Big Travel Effects, additional unfolding demographic forces such as a steady inflow of expatriate workers, robust natural population growth and a growing middle class, will combine to drive a new and divergent set of travel behaviours and needs in the region.

The report, written by Frost & Sullivan and Insights and commissioned by Amadeus, examines and contextualises the various ways a new travel landscape will develop in the Gulf region over the next fifteen years.

“The Gulf region is poised for a new era of travel as investment in infrastructure, new tourism sectors, and governmental initiatives to ease intra- and extra-regional movement make the GCC more attractive to leisure and business travellers,” said Antoine Medawar, Vice President, MENA, Amadeus. He added, “The travel providers who address the nuanced needs of the region’s population stand to thrive in the coming decades. At Amadeus our people, our technology and our innovation are dedicated to helping our customers and partners to shape the future of travel in this region.”

Further key findings include:

Economies in the GCC are diversifying beyond oil, and specialist tourism sectors such as cruise, meetings and conferences and medical tourism play a prominent role in this diversification. As a result, GCC countries have maintained an average GDP growth of over 5% in the past decade, with a greater increase expected in the future.

Tourism will have a trickle-down effect into other sectors, furthering economic growth and diversification. Hospitality and construction in particular will benefit as the number of travellers entering or passing through the region increases -Qatar expects 3.7 million tourists in 2022 due to the FIFA World Cup and is investing $20 billion on tourism infrastructure and $140 billion on transport.

The GCC is working to make travel easier, both within the region and outbound. The difficulty of obtaining a visa has been the main reason for 33% of travellers surveyed not taking trips as often as they would like. By improving accessibility within the region and abroad, the number of intra-regional travellers is expected to increase four-fold by 2030.

“Travel in the Gulf region is changing. Economic diversification and a move from oil is an important driver, but there are many more subtle factors also at play. Changes in population and geopolitical pressure to open borders and make movement easier are also impacting the future of travel here,” observed Mona Faraj, Managing Partner, Insights.

The report was informed by a survey of some 1,000 travellers from the region as well as interviews with thought leaders in the travel industry. It highlights the technologically savvy and growing population of the GCC and predicts a travel landscape will develop in the region that is highly connected, personalised, and sustainable.

To download a free copy of the report “Shaping the future of Travel in the GCC: Big Travel Effects” please visit:

http://www.amadeus.com/blog/05/06/middle-east-report/

IHG Announces Strategic Technology Relationship with Amadeus

amadeus new logo on blueIHG logoYesterday Amadeus made the following interesting blog post:

“Today IHG, one of the world’s leading hotel companies, announced a strategic technology relationship with Amadeus.  This fully supports the mission and strategy we have shared openly with our investor community, media and colleagues across the hotel and travel industry over the last year.  Our stated mission is to build a community model for the hotel industry – a replica of our highly successful Amadeus Altéa community model for airlines.

So what does this relationship with IHG bring to help us execute this strategy?  IHG has a wealth of subject matter expertise: renowned for offering the most innovative and efficient technological solutions at all stages of the Guest Journey Dream, Plan, Book, Travel and Share to enhance their guests’ experience, IHG has sound ideas about what next-gen systems for the hotel industry should look like.

As Eric Pearson, CIO, InterContinental Hotels Group commented: “IHG is a brand and consumer driven company. We use insight to anticipate consumer trends and behavior. We also have a long track record of investing in relevant technologies to support our brand promise and build a closer relationship with our guests. Partnering with Amadeus will help us continue to do just that.”

The initial phase of the strategic relationship between IHG and Amadeus will be focused on planning and development. This will involve scoping out and creating a roadmap for potential technologies and solutions that will drive innovation in the industry.

The marriage of IHG’s unique insight and world class guest care with Amadeus’ technology vision and infrastructure capabilities has the potential to deliver a step change in hotel solutions.

While a ‘community model’ is a new concept for the highly fragmented hotel industry we see significant interest and, as we progress with partners like IHG, we look forward to truly shaping the future of hotels.

via IHG Announces Strategic Technology Relationship with Amadeus.

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Amadeus reveals a new corporate identity and purpose

amadeus new logo on blueAmadeus today have revealed a new brand and corporate purpose.  Its previous tag line “your technology partner” has been replaced by an inspiring inclusive statement “let’s shape the future of travel”.

A new corporate video has also been released on You Tube showing their new, fresh approach.

In addition Amadeus have also posted a new animated video on the subject of connecting airlines and airports, something that it is clear Amadeus is striving to do from a business point of view as it seeks to diversify its business beyond Airline and Travel Agency IT solutions.

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Amadeus Seeks More Acquisitions After NMTI Purchase – WSJ.com

AmadeusAmadeus says it is looking for new acquisitions, after its $500 million deal to buy U.S. technology company NMTI Holdings, Inc.

“I don’t know if we’ll go for a deal of the same scale as this one, but we are definitely not ruling anything out; and smaller deals are also possible in the future,” Chief Financial Officer Ana de Pro said in an interview Thursday.

Amadeus is looking for possible acquisitions in airport management and railway bookings, Ms. De Pro said. The company wants a bigger role in rail travel, as people look for convenient alternatives to flying, she said. It is also looking for prospects in Western Europe, where high-speed trains are more common, and in North America.

Late Wednesday, Amadeus said it purchased booking services provider NMTI, known for its commercial brand Newmarket. That acquisition, Amadeus’ largest yet, reflects a strategy to move the company away from its traditional niche as market leader in the little-known world of travel reservation technology.

Amadeus is based in Madrid and has a market value of 13 billion euros. It provides the technical backbone for bookings made through popular systems such as Expedia.

via Amadeus Seeks More Acquisitions After NMTI Purchase – WSJ.com.

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Amadeus Launches Venture Fund To Invest In Travel Startups – Skift

Dennis Schaal, Skift

AmadeusAmadeus became the latest established travel industry operating company to launch a travel startup investment fund, joining Concur, eLong, American Airlines and Priceline, although the latter two “funds” have yet to leave the ground.In recent years, these companies are showing they are not just content to acquire travel startups when they are ripe for the plucking.Instead, these companies want to get tight with the startups at an early stage, with the possibility of an acquisition perhaps at a later juncture.Madrid-based Amadeus announced in a blog post today that it has created Amadeus Ventures to invest in early-stage travel and hospitality startups.Katherine Grass, who heads Amadeus Ventures within the Amadeus IT Group, writes in the blog post:“The main objective of the fund is to identify and invest in start-up companies that have already developed a working prototype and sit in niche areas of the sector that we believe are at the forefront of developing market trends.

via Amadeus Launches Venture Fund To Invest In Travel Startups – Skift.

Amadeus Simplifies Low-Cost Airline Bookings

Amadeus is making it easier for travel agents to make and manage bookings for low-cost and hybrid carriers, according to Alexandre Jorre, senior manager of commercial marketing.
EasyJet, the huge low-cost European airline based in Luton, U.K., is the first carrier to become a “light ticketing” airline.
Light ticketing is a new ticketless access level that generates a virtual ticket number to help standardize agency workflow. Pricing, ticketing and booking functionality offers the same look and feel as for other carriers.

Simplifying shopping
“We are improving the way agents can manage content for EasyJet,” Jorre told Travel Market Report. “We’ve improved the workflow across availability, pricing, issuance and reporting.”

via Amadeus Simplifies Low-Cost Airline Bookings.

Technology is key to unlocking the enormous potential of the Chinese travel industry. ~ Sunday, 8th September 2013 from 4Hoteliers

Technology is key to unlocking the enormous potential of the Chinese travel industry.
Sunday, 8th September 2013
Source : TravelDaily

AmadeusAmadeus discusses critical trends that will shape the future of travel in China at the Travel Distribution Summit.

TravelDaily, China’s leading online publisher and event organiser focusing on distribution, marketing and technology trends in the travel and tourism industries, welcomes Amadeus as the platinum sponsor at the 2013 China Travel Distribution Summit in Guangzhou on September 11 & 12.

Over 750 C-level executives and senior leaders from travel and tourism will take centre stage at the China Travel Distribution Summit to address the core issues affecting the heart of their industry.

Amadeus, a leading technology partner for the global travel industry, will showcase how its advanced technology solutions creates new opportunities, maximises revenues and increases efficiency for airlines, travel agencies and hotels across Asia.

Bart Tompkins, Managing Director for Amadeus China will also deliver a keynote presentation detailing the increasing use of technology and infrastructure during the travel process, the rise of individualism of Chinese travellers, the disappearance of travel barriers within the Asia Pacific region, and expected growth at the upper and lower ends of the travel market.

via Technology is key to unlocking the enormous potential of the Chinese travel industry. ~ Sunday, 8th September 2013 from 4Hoteliers.

New PhoCusWright Amadeus report on the airline industry calls for customer-centric

AmadeusLas Vegas, NV, United States & Madrid, Spain, 5th September 2013:A major independent global study released today appeals to the airline industry to take a fresh look at the age-old frustration of delayed or cancelled flights, in order to drive loyalty and reduce the impact of irregular operations on its customers, both now and in the future.
‘Passengers first: Re-thinking irregular operations’, written by Norm Rose of travel industry research authority PhoCusWright, and commissioned by Amadeus, a leading technology partner for the global travel industry, aims to provide airlines with practical strategies to improve responses to irregular operations, urging airlines to place a greater focus on the impact of disruptions on each passenger’s trip experience as part of operational decision-making during times of disruption.
Deliver a standard service approach to disruptions: Airlines should consider incorporating a standard service approach to deal with passenger itinerary changes. When severe events occur, airlines with such an approach in place merely extend their processes to a larger number of travellers rather than attempt to implement a new, reactive process.

·         Offer ‘intelligent re-accommodation’: Automated re-accommodation technology may provide efficiencies for the operational staff, but it does not always solve the underlying passenger itinerary disruptions. Airlines may want to implement an intelligent one-click solution that empowers passengers to choose alternatives most relevant to their needs. Airlines should also consider investing in systems to gain a greater understanding of each passenger’s preferences and reasons for travelling, including passengers who book through indirect channels. 
·         Provide transparent communication: In every market surveyed, except China, insufficient communication was cited as passengers’ top frustration with irregular operations management. Introducing an integrated, cross-departmental approach to customer service will enable airlines to provide authoritative, personalised, proactive communication – and lessen the need for travellers to rely on third-party sources. 
·         Moderate delays hurt the industry more than big ticket disruption: One of the greatest challenges facing airlines is not major weather or force majure events, such as the volcanic ash cloud that disrupted travel across Europe in 2011, but rather the far more regular moderate delays of 1-4 hours that matter most to customers. In all markets at least 50% of travellers have experienced a moderate delay on one or more flights in the past 12 months, with this figure highest in China (74%) and Brazil (67%). Instances of significant delay are far less common.
·       Travellers are increasingly venting frustration via social media: Globally, around one third of travellers surveyed said they had posted comments about delays to their friends on social networks such as Twitter and Facebook, with higher numbers sharing experiences amongst their immediate family or friendship groups using other means. The study calls on airlines to shift social media strategies from promotional activities alone, and to embrace analytical tools that help them to understand the impact of social comments made in relation to disruption. By following this analytical approach, airlines can practice social mapping to better understand the impact of disruption on their brand as well as the sentiment of their customers.

via New report on the airline industry calls for customer-centric. approach