Gillian Gibson, vice president Multinational Customer Group, Amadeus, one of the speakers during the recently held Travel Distribution Summit Europe 2006 in London, says the company is witnessing much more corporate travel being booked online. (6/13/2006)

She told EyeforTravel.com's Ritesh Gupta that the developments as far as operations of Amadeus in Europe are concerned fall into three categories. More information on the same and other issues such as GDSs providing value to their agency and supplier clients:

What according to you have been the major developments as far as operations of Amadeus in this region is concerned? How would you assess the performance in corporate travel distribution?

Well Amadeus is the leader in business travel distribution in Europe so performance is petty good. The major developments in this area fall into three categories.

We'e seeing much more corporate travel booked online. In fact we've just announced a global reseller agreement with Carlson Wagonlit for our corporate self-booking tool, Amadeus e-Travel Management. With this announcement, all four of the big travel management companies ?BCD, American Express and HRG ?are now reselling our self booking tool. In 2005, we processed over 250% more business trips through reseller agreements than in 2004.

We'e developing technology to improve the efficiency, and therefore profitability, of corporate travel distribution. In January, for example, we announced the Amadeus Call Centre Solution, a next generation technology package which allows travel companies to operate a fully automated, truly multinational call centre. By facilitating the transition to a more efficient call-centre model, combined with added productivity tools, Amadeus Call Centre Solution helps to cut costs by a further 30% and allows the call centre to deliver the same level of personalised service.

And finally, we are working hard on delivering the relevant content which corporations and travel management companies need. For example, we recently announced an agreement with hotel.de to incorporate 2,000 smaller hotels in secondary cities in Germany ?perfect for business traveller. On the airlines side we are securing the low-fare content of the most relevant airlines and now offer 38 low-cost carriers and the low-fare content of the world's leading full service carriers.

What major trends have you witnessed in the marketplace? How have you translated them into business development opportunities?

First of all ?integration. More and more, corporate customers are asking for their online self-booking tools to be integrated with their existing IT processes. For example, a company wants its self-booking tool to take advantage of its own HR database for data like the cost-centre which should be charged for the trip. This means users don't need to re-enter data which the company already has. In response, we have put our software engineers at the disposal of our customers to complete these integration requests. We currently have around thirty integration projects underway.

As I said above, we'e seeing a lot more corporate travel booked online and we'e working with our travel management company partners on this opportunity.

Another trend worth watching is lightly managed travel. This is about getting the right solution for SMEs whose needs aren't as complex as large corporations but still need a solution to bring down the cost of business travel. At Amadeus we already have a solution but we are working on an improved version of this.

Do GDSs continue to provide value to their agency and supplier clients? And can they evolve quickly enough to fight off the threat of alternative distribution systems?

The value of the GDS is reach. We can distribution an airline's inventory to travel agencies in over 215 geographic markets in the world. On the flipside, the value to the agency is the ability to access the fares of 500 airlines, and 61,000 hotels and a range of other content, from a single point of sale which is integrated with their mid and back office systems. That value hasn's changed. It is also a value which is based on vast processing power. Being an efficient intermediary in this industry means that our data centre in Germany processes 580 million messages each day! Similarly, playing such a crucial role in the distribution chain demands immense reliability ?which we provide.

Something else to bear in mind is yield. The yield on the GDS/travel agency channel is significantly higher than for other channels. So the debate must be about the overall profitability of the channel ?not distribution costs in isolation.

Looking at some of the alternatives which have been developed recently, well, competition in a channel is nearly always a force for good because it encourages innovation. It's really about creating solutions to meet the needs of our customers, which we are doing. In terms of the commercial model, Amadeus introduced value-based pricing for airlines back in 2003. This model significantly reduces the distribution cost in markets where airlines have a strong brand and are under the heaviest competition from low-cost carriers. We introduced this model long before current debate about distribution alternatives even started. In terms of technology, 92% of Amadeus?total development is on the latest Linux or UNIX open systems. By 2009 our technology will be 100% Linux or UNIX.

Do we need to adapt the current distribution model to ensure a win-win-win scenario for suppliers, TMCs and travel buyers? If so, how can new distribution technologies contribute to the creation of a better business model?

Certainly, change has to be accepted by everyone. Our value-based pricing concept alleviates a genuine concern by associating cost more closely with value. But generally, our strategy at Amadeus is not to confine our thinking to the distribution chain but to use technology to increase efficiency, and therefore profits, across the whole business. So our IT solutions, for example, can save airlines many, many millions of euros and our call centre solution can help TMCs cut their costs by 30%.

What major changes have you witnessed in the way travel suppliers want to sell to the business traveller?

Well our strategy is to work help suppliers distribute their inventory across the board, regardless of channel. And certainly, there has been a desire to sell direct but the complexity of business travel has prevented direct distribution from taking off in the corporate world. Business travel requires much more in the way of consultancy and service, and TMCs provide that role. Because of their position, TMCs are able to provide corporations data about their total travel costs ?airline, hotels, rail, and rental car ?and help to reduce the total spend. They also have the technical know-how to integrate business travel into each company's work flow processes, which creates more efficient management of travel. TMCs are still by far the biggest sellers of corporate travel.

How important is customer loyalty in the corporate travel marketplace? How can your distribution strategy enable you to maintain and grow brand value with your corporate travel clients?

The key thing for suppliers is that travellers understand their product and that corporations see differentiating points. In the airline sector, for example, there is a lot of competition in the business class with flatbeds and laptop docking stations and all-business class flights. It is crucial to the airline that business travellers know in detail the features of their offer. At Amadeus, our focus is to grow this area. For example, in hotels, we've offered rich multimedia content for a while now ?giving travellers a much more detailed impression of the room they will stay in and allowing them to make an educated decision as to which hotel they will choose.

What's your future prediction for the corporate travel distribution model? How will your business customer buy their travel in the future?

The big change that is already happening is more and more employees are booking their own travel. The highest rate of adoption is in the US but this is a trend that will certainly travel the world. One thing that I think will happen here is that business travel will become segmented. So there will be a technology and price offer for simple, point-to-point travel which can be booked entirely automatically with no intervention from and agent. There will be another proposition for more complex itineraries involving a number of flights and maybe different combinations of flights if there are a number of passengers. These kinds of itineraries will need much more support from a travel consultant, throughout the process.

What's on your agenda?

For corporations, our current obsession is adoption! This is because a company or other organisation buying a corporate self-booking tool is not the end of the story. They have to encourage their employees to use the tool. We are all used to booking their leisure travel online and most of the corporate booking tools on the market are intuitive to use. So, very often, encouraging adoption within an organisation is a case of changing habitual behaviour. We are sharing our experience working with over 1,000 corporations in this area and have developed free workshops to help drive adoption of this tool.

More generally, securing the most relevant content is a constant focus for Amadeus. Through Amadeus Hospitality, we are connecting a growing number of smaller hotels in secondary cities ?ideal for the business traveller. For example, we recently announced an agreement with hotel.de to incorporate 2,000 such hotels in Germany. On the airlines side we are working hard to secure the low-fare content of the most relevant airlines. We now offer 38 low-cost carriers and the low-fare content of the world's leading full service carriers.