`Travel offers the largest e-commerce opportunity’

Amadeus,the world's foremost computer reservation system (CRS), is increasingly adapting itself to the Internet and enabling its travel ag...

December 20, 1999 12:00 AM IST

5 min read

Amadeus,the world’s foremost computer reservation system (CRS), is increasingly adapting itself to the Internet and enabling its travel agents, spread across 130 countries, to use the web to their advantage. The Amadeus Global Distribution System (GDS) is focussing on business-to-business partnerships to set up e-travel services. It has also developed travel planning and booking capabilities via mobile phones and notebook computers.

In India, Amadeus has a national marketing company — Amadeus India, which completed five years recently. Amadeus India has a market share of over 70 per cent in the Indian subcontinent and over 2,000 travel agencies in 56 cities in the country use the Amadeus systems to make reservations on domestic and international flights, railways and hotels.

Jose Antonio Tazon, Amadeus President and CEO, was here in the Capital last week to celebrate the fifth anniversary of Amadeus India. SWATI PRASAD spoke to him about the challenges that are posed by the Internet tocomputer reservation systems and the future of this trade. Excerpts:

Don’t travel agents who use the Amadeus GDS perceive the Internet as a threat?
Yes, they do. However, just as banks have not vanished due to Internet banking, even travel agents know that they will survive despite the advent of the Net. So in that sense the Internet is not a revolution, but an evolution. Travel agents are increasingly looking at how the Internet can help them. Many of them are setting up their own sites and we have developed several products like Amadeus Vista which give travel agents access to Internet and extranet service.

How many tickets are booked online using Amadeus GDS, as opposed to those booked by travel agents world-wide?
It’s difficult to give you world-wide data. But in the USA, for instance, where making reservations online is most popular, in calendar 1999, 4 per cent of travel reservations were made online. Out of this 2.1 per cent were made by the airlines themselvesthrough their websites. Around 1.8 per cent were made by travel agents through their own websites.

Travel is the largest e-commerce opportunity in the coming millennium. Amadeus has reacted to the Internet by developing booking engines, enabling e-travel agencies and by tying up with various large corporations to provide a better Internet product. For instance, in November, Amadeus and Wal-Mart Stores Inc joined hands to provide online travel reservations technology for Wal-Mart’s new website which is scheduled for launch in January 2000.

Are such tie-ups also going to happen in India?
We are talking to the Indian Railways to enable it to make online reservations on Shatabdi and Rajdhani trains. We hope to offer reservations online on these trains sometime next year. Reservations on Palace-on-Wheels and Royal Orient can already be made through the Amadeus central reservation systems.

Within a week, rediff.com will be geared to make reservations on flights and hotels online. Even today,websites like visitindia.com, satyamonline.com, yatra.com, tafi.com and amadeus.net provide the end-users with information about flights, destinations and access contact information of an Amadeus travel agency and other travel-related information.

What has been the cancellation rate due to the Y2K scare?
There was a significant increase in bookings for the new millennium and after reports of a potential problem due to the Y2K bug, there has been an increase in cancellations. The cancellation rate is around 10 per cent right now. But 5 per cent of cancellations are due to the fact that extra bookings were made for the New Year since this is the last year of the millennium. Five per cent of the cancellations, I feel, are due to the Y2K scare.I don’t think that passengers need to fear travelling on the New Year eve since a lot of work and attention has been put in by authorities to prevent any kind of damage.

What is the market share of Amadeus in various continents and how is the Indiansubcontinent important to your business?
We have the largest market share in Latin America of 56 per cent where we made a total of 65 million air bookings in 1998. In Europe, we have a market share of 54 per cent and a total of 370 million air bookings were made in calendar 1998.

However, in terms of revenue, 61 per cent of our revenue comes from Europe while 18 per cent comes from the USA and 21 per cent from the rest of the world.

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World-wide, 86 per cent of our revenues come from air bookings, 3 per cent from non-air bookings and around 11 per cent from other services like hotel reservations and car rentals.

India is a very important market for Amadeus. We have a 70 per cent market share in the Indian sub-continent. But more importantly, not only is our market share growing in the subcontinent, but the market is growing too. For growth in the Indian subcontinent, I truly feel that the sky is the limit. And that’s why, we want to focus on the subcontinent.

In Europe too, we are growing indouble digits. In the USA, our growth rate is 2 to 3 per cent per annum. This is mainly because the traffic is growing at only 3 to 4 per cent and passive bookings are decreasingly. Online bookings are increasingly becoming popular in the US and that is eating into our share.

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