Strategic Meetings Summit London, 26 September,
September 29 2022, Kimpton Fitzroy London
Friday 30 September 2022, JW Marriott Grosvenor
Champa Magesh, the new managing director for Amadeus UK & Ireland, talks to BBT about buyers’ concerns and travellers’ expectations, GDS fees and the future of travel technology
You have been talking to your agency and TMC clients since you took up your role at Amadeus - what are their key concerns? They’re looking at how are they gearing up in terms of their businesses. There are players considering acquisitions, or who are being acquired. A lot of deals are happening and this is a very dynamic industry.
Customers are concerned about the end-traveller’s expectations: personalisation, and omni-channel booking and servicing, are becoming is becoming increasingly important. For TMCs, it’s about how do you provide a personalised service in an online booking environment.
Many travel agents are also interested in attracting the right talent, and are talking to us about new products that allow them to work from home – offering flexibility without having to invest in technology infrastructure. We’re looking at how we can help streamline their processes; they're telling us they want to continuously take cost out of the equation
Having recently joined Amadeus from American Express Global Business Travel, what do you see as corporate buyers’ main issues? Controlling costs: getting better value for travel, putting approvals in place or looking at where you can cut discretionary travel.
Justifying and showing the value of the travel management programme to the rest of your organisation, from the CFO to the travellers.
Content and security: I may have a good handle on my air programme – it’s cost-effective, and travellers are happy and engaged. But if I don't know where they're staying I’m not fulfilling my duty-of-care obligations.
Corporate buyers are contending with the expectations of their travellers. The benchmark for user experience is very high, because of what travellers are using in their personal and leisure bookings.
As a GDS provider, what’s your view on Lufthansa’s decision to charge a €16 fee for booking made via the GDS?We’ve made our position very clear. We don’t agree with Lufthansa’s calculations on the difference in cost between distribution channels. This decision is clearly from a position of controlling the distribution channel. For Lufthansa this is about direct connection to the traveller - about owning the traveller data.
It’s curious, when you look at Lufthansa’s numbers, 70 per cent of global sales are on the indirect channels, so being delivered by travel agents and TMCs. Where is the value here for people who are delivering value back to Lufthansa?
One concern is the technology options: what is Lufthansa offering? Its agent website is not fit for the complex processes that agents manage – nor for corporate buyers, who are a significant part of that indirect channel.
There has been reference to direct connect, but no discussion about whether it’s going to be economically viable for agents to build a direct connect into Lufthansa. There are a lot of unanswered questions. Lufthansa isn’t offering up an alternative solution to all of the benefits being delivered very cost-efficiently by the GDSs today.
Lufthansa and other airlines say that GDS technology is out-dated…We don't accept that. Being a technology provider we have the capabilities – in fact Lufthansa has access to direct connect technology from Amadeus within its airline IT relationship. They’ve had access to this for six years.
The GDS is the most cost-efficient way of enabling travel commerce to happen. The model works – look at some of the innovations that have already happened: we’ve brought LCCs [low-cost carriers] into the mix, enabled ancillary services within Amadeus. This is a huge priority, not just for airlines, for agents and TMCs as well. We already have 30 airlines able to sell ancillaries.
There’s a very strong commercial argument for GDS as the most cost-effective way of connecting up the indirect channel. This is the best way to do it - it’s proven and continues to grow.
Is the issue about NDC (New Distribution Capability)? No, it’s not. We are already engaged in NDC pilots with a couple of airlines. The NDC standard is possible within the GDS framework. NDC and the GDSs are not mutually exclusive. It’s about being able to provide rich content, which we do already within GDS, and looking at how to personalise content, which we’re already working on – we’re very keen to work with all parties to translate this and make it happen.
Lufthansa is not recognising the value that intermediaries provide in the travel supply chain – in my personal opinion that is fundamentally flawed.
What do you see as significant travel tech game-changers in the next few years? I think some things will get clarified over next three years: for example, what personalisation means within a business travel context? At the moment it’s very fuzzy. We know what the leisure travel experience looks like and how it’s impacting expectations of the business traveller. Three years from now, we'll be in a much better position to articulate this. There’ll be a sliding scale between control and flexibility, but more of a common understanding of what that means.
While the majority of transactions continue to move online, the critical role of the TMC in the supply chain will be clarified – empowering buyers with the information to communicate the value of the TMC and travel programme to the traveller.
Also, there is still huge room for the mass adoption of duty-of-care capabilities, including how it is executed within travel programmes, in a very seamless way. Technology will play a big part in all these areas, because tech is the reason disruption is happening. I think it’s also the most cost-efficient way to solve these issues.
Champa Magesh is managing director for Amadeus UK & Ireland. She was previously vice-president and general manager for American Express Global Business Travel UK. She spent seven years in senior roles at American Express, including Amex Global Corporate Payments.
Champa has held a range of management positions in the UK, US, Kuwait and India. Prior to joining American Express, she worked for Cisco Systems and the Royal Bank of Scotland. She has an MBA and Masters in information management from Arizona State University.