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Philippe Grando, CEO of Amadeus France : A total renovation of services provided

4 min reading time

Published on 03/11/04 - Updated on 17/03/22

HTR Magazine: How would you assess 2004 at this point?

_ Philippe Grando: 2004 will likely be better than 2002, we have already registered an increase of 9.8% in airline reservations in the first trimester. This is due to a stronger presence in the asian markets, notably that see a strong rise in reservations. Our three leading markets, United States, Germany, and France, all suffered from September 11th and the recession that followed, though seem to have recovered. This is notably true in the business segment that has until now been rather weak. The size of the hotel supply is increasing (+15% this year). We currently register over a million reservations on the French market each year.HTR: How do you see the future? _ P.G.: I am calm. We are ready for the major changes to come. We have anticipated everything, due to a policy of product standardisation and a drop in our operating costs. Our position of world leader should help us move to the various steps more easily. Like travel agencies, it is necessary that our revenue be in line with added value.HTR: To what degree have changes in the tourism sector modified Amadeus? _ P.G.: Our financial model was slightly modified, since it was necessary to anticipate the pressure of airline company costs and deregulation. Over the last four years, we therefore opted to carry out a policy of diversification. The rise in confidence in online travel reservations forced us to position ourselves in that sector. We therefore made sure that we were present in this channel by bringing IT solutions to travel agencies that have online services. n this way, we equipped the sites of Opodo (subsidiary of Amadeus), Lastminute, and ebookers with online search engines and Customer Relationship Management (CRM) tools. We also reinforced our Self Booking Tools targeting the business market. Finally, we are also a supplier of technology to airline companies.HTR: Are traditional travel agencies still among your priorities? _ P.G.: While it is true that their share in our turnover has fallen from 90% to 75% over a few years, this is a simple redistribution in rising revenue. Traditional distribution remains a major strategic axis. However, there is a need for diversification there too. Market growth rate of around 5% per year leaves space for everyone if they make an effort. For a long while, travel agencies have taken a wait-and-see attitude, notably in the leisure segment where they are seldom present online. They should obligatorily adapt themselves and be present on all distribution channels. Beginning on April 1st, 2005, there will no longer be commissions by airline companies. Travel agencies must therefore be attentive to their level of service to attract, keep, and build up the loyalty of their customers. Competition will become more intense. And this also will happen by the utilisation of new tools to be present throughout the entire range of channels. The automation of content should increase the quality of the latter. And the hotel industry should largely profit. We have therefore undergone a total renovation of our supply of services with more content and making it easier to use, in order to free up the seller from the technical side. Beginning on April 1st, we are also going to sell our new Service Fee Manager tool, which will allow managing commissions, transaction follow-ups, rate services, etc.HTR: What is the objective of your partnership with Optims? _ P.G.: We are developing with them a tool allowing hoteliers to have access to GDS. An independent hotel may enter information into the GDS via Optims (specialist in reservation and automatic distribution services for the hotel industry) and decide where and with whom he wants to be distributed, thanks to an internet interface. Up till now, referencing oneself has been a particularly complicated issue, it is truly a revolution. This tool allows giving independent hoteliers access to all distribution channels. Hotel distribution is one of the major themes for the future of GDS. Training, telephone assistance, online assistance, challenges, all actions are taken so that agencies sell the hotel via their GDS. A large advertisement campaign promoting the supply will begin in France at the end of the year.HTR: Is deregulation about to come soon to France? How are you going to prepare for it? _ P.G.: I have the feeling that this will take longer than anticipated. The European Commission’s decision awaited for the beginning of 2005 seems to have been delayed, which is not necessarily a good thing for us. We are in favour of total deregulation, such as already exists in the United States. The only thing that I am opposed to is the elimination of neutral displays. However, we are ready. We have created a pricing system on the added value adapted to each company and that already works perfectly across the Atlantic, all that remains is for it to be applied to Europe.

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