Holding the course pays off for Amadeus APAC Sunday, 22nd November 2009 Source : By Yeoh Siew Hoon

Volumes will be back in 2010 but yields will be slower to recover, says Brett -

Amadeus Asia Pacific president David Brett has tipped that the region's travel industry will make a recovery in 2010 back to 2007 levels, but yields recovery will be slower.

At a media briefing in Bangkok last week, Brett said that while Asia was worst hit in the darkest months when the global financial crisis was making its impact felt around the world, aggravated by fears of swine flu, it had made, and will make, the strongest recovery.

Up to September this year, according to MDIT data, Amadeus Asia Pacific grew its market share of travel agency bookings by 2% to 33% and increased its market share of online travel by 18.8% to 51%.

The primary drivers of this growth came from Australia, Hong Kong, India, Indonesia and Malaysia. In a year when other companies were making staff cuts, Amadeus increased its staff force in the region by 15% to 1,400 employees and opened two new offices - in KohSamui, Thailand and 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.

When asked what lessons he had personally learnt in the past year, Brett said, "Don't react too quickly. Hold your course. Have faith that it will recover."

He added, "It's easy to say that now, it wasn't that easy at the beginning of the year, but 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."

He said it allowed companies to realign and refocus and "reinforced my belief that our industry is extremely volatile but the silver lining is always around the corner".

He 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, 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 "understand individual customer needs and tailor products and services so that customers will get what they want rather than falling into a bucket".

He said that although economies were stabilising, cost awareness remains. Travellers are more informed, budget conscious and booking later. Revenues have been hit but there are opportunities for change among airlines, he said.

He said that Amadeus invested more than 3,200 man years in research and development in 2009, "innovating solutions before customers know they need them".

Asked what were these solutions and if Amadeus was working on an revolutionary innovation that would do to travel distribution what the iPhone did for mobiles, Brett said, "We hope we can do more than the iPhone did for mobile - 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 neworking framework which puts technology to the back."

He said one key trend in 2010 would be more airlines moving to outsourcing solutions. "Airlines have shown greater interest in outsourcing models to reduce high levels of fixed costs. By holding on to legacy systems, you put yourself at risk," he said.

He highlighted the breakthrough agreement with the AirAsiagroup which has implemented the Amadeus Ticketless Access Solution, which allows flights on its four airlines to be shown on the same screen as other airlines.

"It's a major breakthrough and the first time a low cost airline group in Asia has this solution," he said.

Sharing his vision for 2010, 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 would find their niche and focus on service, mobile innovations would continue to improve and the industry would turn to technology to overcome challenges, increase sales and differentiate their service.

Yeoh Siew Hoon, one of Asia's most respected travel editors and commentators, writes a regular column on news, trends and issues in the hospitality industry for 4Hoteliers.com.

Siew Hoon, who has covered the tourism industry in Asia/Pacific for the past 20 years, runs SHY Ventures Pte Ltd. Her other writings can be found at www.thetransitcafe.com

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