Q&A with Amadeus UK & Ireland m-d Stephane Durand

Amadeus UK and Ireland managing director Stephane Durand answers questions posed by Linda Fox on GDS trends, travel and new media

Q: What trends are you seeing in hotel distribution? Are they going the same way as airlines?

A: We look at the database of hotels that is currently on the GDS and then at hotels agents want to sell. Five years ago 70% of hotel reservations were going direct to the property. With airlines it was the opposite. We see more hotel bookings going through the desktop of a travel agency than ever before so the trend has been reversed. Also, five years ago independent hotels did not have much option in terms of distribution but the internet has changed all that and they can automate everything. We see hotels as an opportunity and the sector is a key strategy for our future. The internet and technology are helping properties reach a larger number of customers and helping travel agents to automate processes and provide value. We acquired property management specialist Optims at the end of last year so we’re probably the only GDS which can integrate any property our travel agencies are working with and on the screen they look like a Hilton or a Marriott.

Q: GDS new entrants – how much progress are they likely to make in Europe?

A: The internet has given everybody the opportunity to get access to everything which is good. I think low-cost carriers are far more of a challenge than GNEs. They are in the US and do not touch us here. Amadeus is an intermediary and we have challenges but travel agents have said the GDS is the best source for them in terms of having a single point of sale. Our reach is also important as well as integration with other systems. We need to bring the GDS to the next level to ensure we are providing this universal market for agents. The GNEs rehashed questions about our relationship with the airlines who have nothing to complain about in terms of our reach or technology. The challenge is purely on the commercial model. We have moved away from a one price fits all approach to value based pricing to reduce their fees to a minimum on short-haul routes where they compete with the low-cost carriers. We’re going to go even more into that with menu based pricing.

Q: Do you foresee any airlines pulling out of a GDS, as has been rumoured?

A: We firmly believe in a free economic environment with competition for the benefit of the traveller. We need to ensure airlines are taking full advantage of the technology. The challenge is in domestic travel for the larger carriers so it’s about finding the model that works for all three parties. With regards to full fare content from all the carriers, we have seen different initiatives in different markets but I feel very positive about them remaining in the GDS. Distributing via a website is different to 75,000 travel agents with the reliability they need and get. Since commission went away travel management companies have bee better able to defend their value to corporate customers. They have become the most cost efficient network for a given airline.

Q: Can the GDS take advantage of the enormous content they have and get involved in RSS, blogs and podcasts?

A: There is unlimited potential but we need to move in phases. We have a customer advisory board and people like TUI are on that and have a say in how we develop our products. We spend a day, about three times a year, meeting them and consult on how we want Amadeus to evolve. You have to look at the business case and make sure we develop the open architecture to be able to cope with all these new things.

Q: How do you see the year playing out?

A: Our recent survey results confirm it is all about productivity and efficiency and there will be more consolidation in the leisure arena. The big will get bigger. In addition, there is a fast growing number of homeworkers with a loyal customer following who profitable. We see that sector as a very strong market for us to work with which is not diminishing. We’re going to target that market

In business travel unless you are big or global or service a niche there will be further consolidation.