Luis Maroto, President and CEO
Amadeus has become a giant of travel technology, with its business covering distribution, IT services for suppliers and intermediaries.
Almost 20 years - the last six as global leader - have seen the former-Bertelsmann exec push the company into new areas and list on the public markets. He tells Kevin May how the company views the changes in the sector and how it is positioned to capitalize.
Distribution capability or technology services - which one has perhaps been the central pillar to Amadeus's growth in the years since you joined in 1999, or has it changed over time?
The IT business didn’t exist when I joined. So that’s really a remarkable success story and has driven growth in recent years.
But our businesses really complement each other, and the Distribution business has continued to grow and be very successful.
President and CEO
What would you consider to be the most important developments in both of those areas of the business in more recent times?
One of the most important developments has been the increasing focus on, and demand for, personalisation and merchandising technology.
Airlines and other travel providers should be able to offer travellers precisely what they want, when they want it, and at every step of their trip.
I personally believe this is best done by bringing together the entire industry - providers, intermediaries and sellers - and by using data intelligently, integrating it with new devices and architectures.
I think technology has always been critical to more scale, choice and access to travel, but today it is mobile, artificial intelligence and data analytics that continue to drive that evolution, by giving people more ideas, more options and more control over their journeys.
Would you say the conversations you have with airlines about distribution are more or less difficult now than they were, say, five years ago?
There’s a very strong understanding now amongst our customers that technology will play an increasingly key role in the future of their business – and so many of the conversations I have are about how specific technologies can drive their business forward.
These conversations are therefore more strategic than they have been in the past. And I believe that’s good for us and good for the airlines too.
With regard to distribution specifically, each airline has its own business strategy and objectives.
We understand and respect them, and to the best of our ability try to adapt to deliver on their needs.
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At the same time, the conversations we have with airlines continue to change because the market environment, competitive pressures, and traveller needs continue to change.
So I wouldn’t say conversations are more or less difficult now than they were five years ago, but they are different: more strategic, more in depth and that is good for everyone.
And the same question about airline IT, please?
I would say that conversations are to some extent simpler, as we see an increased understanding of the value PSSs bring to airlines.
From an airline IT perspective, airlines want, or more importantly need, agility and flexibility. We recognise that we must offer a portfolio of solutions from passenger processing through to revenue optimisation through to digital merchandising.
What has changed is that airlines now want to be able to experiment more, which is why we are opening up access to our APIs; they need to be able to upsell more effectively, which is why we are offering a comprehensive set of revenue management tools.
From our perspective, our conversations with airlines are vital as they ensure we continue to deliver on their needs.
What do you sense happened to turn IATA's NDC initiative from something fairly divisive to a concept that most appear to have accepted as an important development in airline distribution?
I think a lot of the discussion about IATA’s NDC at the beginning was quite binary. GDSs were positioned as "the enemy", airlines as somehow "the victims".
This was never the case.
At the same time, something that was often overlooked was that NDC was not a new technology or a new business model, but rather a new standard on which those other things might ultimately be built.
Amadeus has always been a strong proponent of standardisation, and the distribution business can only benefit from it.
So even early on in conversations with IATA, airlines and other stakeholders the conversation was much more nuanced than has perhaps been portrayed.
Sometimes, innovation comes from M&A activity and sometimes we develop it in-house. We do not have a rule book or a set criteria on this.
All of us recognise that airline distribution needs to evolve, and the NDC standard is likely to be an element of that, but the evolution will not be driven by NDC alone.
There is no one-size-fits-all approach. It is this recognition which I think has led to a more productive and positive discussion between all of us in the sector.
On our side we have been participating actively in the development of NDC, as it needs to be considered from the point of view of airlines, travel agencies and corporations in order to achieve high market adoption.
It also needs to have the right economics in place for all stakeholders if everyone is to invest.
We announced just last month that we will be Level 3 certified as an aggregator by next year, and we look forward to working with IATA and our airline and agency customers to make NDC a success.
If Amadeus was an early NDC adopter, why did it take so long to commit to Level 3 as an aggregator?
The issue was not an unwillingness to commit or invest – because while it’s significant it’s a relatively small part of our overall development spend.
The issue for us was industry readiness and the fact that the standard had not yet been fully defined.
So while we have been working with individual airlines at that level, we were not confident that the timing was right until now.
The company has always talked up its investment in research and development, whilst still spending a fair amount of money on acquisitions. How do you decide what route to take when weighing up when to build or buy?
Our goal, what drives us, is to always go beyond our customers’ expectations and offer them the best possible service. In order to achieve that, we are always considering new developments and new solutions.
Sometimes, that innovation comes from M&A activity and sometimes we develop it in-house. We do not have a rule book or a set criteria on this.
We are always open to interesting opportunities on both sides: if we find a company that complements our offering and adds value to us, we consider it.
And at the same time, if we identify areas of improvement or new ideas for solutions, we invest in them and develop them.
I think that this gives us flexibility to adapt and even forecast future advances in the industry, while making sure we deliver on our customers’ needs.
And on that point - Amadeus has been very busy with acquisitions in recent years. Does one stand out as being critical to the wider strategy of the business over the coming years?
All our acquisitions are significant in some way or other and they’ve all allowed us to advance our business objectives.
Navitaire was obviously the biggest and was important in allowing us to address the low cost carrier segment.
And Newmarket was also clearly important as it opened new parts of the hospitality industry to us and enabled us to broaden our portfolio.
Talk to us about the evolution of your hospitality business. It's a fast-evolving segment of the industry, but does it have any inherent challenges as a result for a tech vendor and distributor such as Amadeus?
There are always challenges, as with any other business, but that is also what makes it so interesting.
The global hospitality sector is dominated by a few large global chains which have significant market share, and a long-tail of smaller providers.
This results in a fragmented market environment. And this is a challenge.
However, due to the structure of our business we are able to address these very different parts of the market as we have both local and global capabilities.
For us, it is really important to understand that the hospitality industry is completely different from the airlines one, and as such we have to adapt ourselves and deliver on the hoteliers’ specific needs.
I am confident that is exactly what we have done and are doing with our Hospitality Platform.
Our platform includes different modules, such as the Central Reservation System (CRS) or the Property Management System (PMS). Our customers can choose as many modules as needed and adapt them to their specific needs.
Also, as our modules perfectly integrate with each other, they help hoteliers overcome one of the main challenges of the industry: the fragmentation of content, which usually makes it very difficult for hoteliers to get a complete and comprehensive view of their businesses.
I think a lot of the discussion about IATA’s NDC at the beginning was quite binary. GDSs were positioned as "the enemy", airlines as somehow "the victims". This was never the case.
Also, as our modules are all cloud-native, they are more flexible and adapt quickly to any new technology or development.
And I am happy to say that this approach has already gained the support of important names within the hospitality industry. We are in fact launching the GRS with IHG. More recently, Premier Inn has signed up for the CRS and PMS.
Some questions about you: what has been your proudest professional achievement?
It is difficult to select one achievement or single milestone. But over the years I have been working as CEO, I feel very proud to see Amadeus hiring, developing keeping great people.
They’re very talented and committed and they give me great confidence in the future.
What do you like to do outside of work?
I have a family and am a father, and as such I spend most of my free time with them. As my children are growing up I have more time to enjoy other activities, like reading or exercise.
I do also enjoy escaping to the mountains and skiing. It provides me with the energy to then come back to the city and work.
What gaps would you admit to having in your overall knowledge of the industry?
I cannot obviously cover or know everything personally, which is why I have surrounded myself with the best team possible.
In Amadeus, we have a global team of 15,000 people who are experts in their respective fields, and together we can deliver on our customers’ expectations, achieve our business goals, and continue to innovate and improve.
At least this is our aspiration.
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