The global GDS players have failed to leverage their expertise in China as the market is not deregulated yet -

Currently, the market restrictions in China do not allow international GDS providers such as Amadeus to obtain a license or BSP ticketing issuance authority. This effectively eliminates any competition and leaves the local provider, TravelSky, as the dominant GDS system in China with almost 100% market share.

Still, there isn't any dearth of hope. Make the most of whatever is available seems to be the motto. And in all this, the attractiveness of China as a market definitely is a major factor.

"There is undoubtedly great opportunity in China," says Simon Akeroyd, Vice President, Business Development, Amadeus Asia Pacific, referring to the number of Chinese outbound travelers reaching 34.4 million by September 2008, up 14.8 percent year-on-year as per the statistics from The China National Tourism Administration. Just in September, approximately 3.7 million locals traveled overseas, an increase of 9 percent year-on-year.

Amadeus says the challenge for the local industry is keeping up with this demand.

"We are well-equipped to manage the Chinese aviation industry's transaction volume, which is now growing beyond its current system capabilities," said Akeroyd.

Akeroyd says if the decision related to allowing foreign travel agencies to set up branch offices in China in January 2007 is extended to the GDS sector, it would contribute significantly to the growth of both the aviation industry and the travel agency sector.

"But ultimately, it is the traveler who will benefit most. Tourists inbound to China will gain access to more connecting flight options, thus widening their choice of itineraries, fares and rates. At the same time, travel agents operating in China will have a greater range of options to offer the Chinese traveler. This in turn will drive even further growth in the Chinese tourism industry, something that is supported very strongly by the CAAC and Chinese travel service providers," said Akeroyd.

"There is certainly potential for Amadeus' GDS to play a greater and more beneficial role in China. Not only is this situation [restrictions] costly for both foreign and Chinese airlines as well as travel agents operating in this market, it also limits the natural development of the travel industry in China," said Akeroyd.

As of now the GDS market is highly-regulated.  Considering this, Amadeus is counting on its expertise as a total technology partner for the time being.

Amadeus, present here for more than 13 years in both distribution and IT businesses, formed an interlink agreement with TravelSky in 2007, following a relationship that was forged back in 2002. This agreement allows TravelSky to make real time bookings – both local and regional – for Chinese travelers on more than 150 airlines that are bookable on the Amadeus Altéa Reservations system.

It currently also offers a range of IT solutions that can help to support the growth of Chinese travel operators, particularly during this time of rapid growth in travel volume in China, both inbound and outbound.

"One of our most successful areas of business has been in aviation technology, particularly e-commerce," Akeroyd.

With Chinese consumers becoming increasingly technology-savvy, and Internet adoption on the rise, airlines are recognizing the importance of the online channel as part of their sales strategy. And this is a major part of the reason why Amadeus has seen such strong demand for its airline e-commerce solutions in China.

Additionally, this year's volatile fuel prices and economic uncertainty have driven many airlines to look for technologies that can improve their efficiency and streamline processes in order to cut costs yet remain competitive. Amadeus' suite of IT solutions can achieve this, as well as helping to identify new revenue streams and increase customer loyalty.

Amadeus can build on the same business further by tapping airlines' need for extended connectivity with other carriers, and for setting up and executing interline agreements between carriers using electronic ticketing.

"Industry-wide, we see many carriers forming new alliances, such as the Star Alliance, and nurturing close ties with their partner airlines. This has enabled the sharing of technologies, such as the Star Alliance Common Information Technology Platform (CITP), a shared Amadeus technology platform for Star Alliance members. This platform allows participating members to interline ticketing seamlessly and to benefit from sharing the cost of technology investment," said Akeroyd.

In order to form effective international alliances, Chinese carriers need to continue adopting international-standard technologies, to keep up with airline partners and to enable seamless interline agreements.

"Amadeus is the only technology partner to offer the industry-leading Altéa IT platform, which is being adopted by the world's top airlines and can be customized to suit airline alliances," said Akeroyd, who at the same time mentioned that in the race for 100% e-ticketing, Amadeus was IATA's preferred partner in enabling airlines to go paperless.

New opportunities

with the industry anchored by commercial centers on the eastern part of China, there lies a great deal of promise for the development of the industry in other regions, notably the western part of the nation.

"We have only just begun to see the great potential of the Chinese travel and tourism industry," said Akeroyd.

"However, in order to increase capacity there must be increased demand, and this can only be achieved if travelers are better informed of their options to travel to and from western China," he said.

Travel agents must have easy access to the tools they need to inform travelers of their choices. This comes in the form of the GDS, as well as IT solutions that help agents to source more detailed information about destinations. As the western cities of China provide increasing demand for travel, airlines will need to be given the market reach provided by a GDS, said Akeroyd.

He also emphasized that travel agencies play a critical role in the Chinese market, where consumers value the expertise and personal service offered by travel agents.

"And while the Internet has produced an abundance of travel choices, these options are so expansive that it takes a specialist to sieve through the masses of information to offer comprehensive, well-priced packages that cater to the traveler's needs while alleviating the planning burden."
China needs to evolve – for travelers' sake

China's tourism market is rapidly developing, boosted further this year due to the 2008 Beijing Olympics.

"As passengers and their needs evolve, so too must airlines. Ultimately, for any airline to succeed it must centre on its customers, and using the right technology will help ensure airlines deliver more enjoyable and smooth traveling experiences to the consumers," said Akeroyd.

With both its business and tourism markets consistently growing, and with more Chinese traveling, Amadeus sees the country's travel community take an increasingly international view.

This could lead to increased internationalization and deregulation for the travel industry and business as a whole in China, according to Amadeus.

Mr. Simon Akeroyd will speak during the upcoming China Travel Distribution & Technology Summit to be hosted by Traveldaily. This event will take place on November 20-21 at InterContinental Hotel, Shanghai. For more information about this event, visit http://summit.traveldaily.cn/en/index_en.asp