Amadeus
Luis Maroto's career at Amadeus spans 25 years and two IPOs. He joined the company in 2000 as director of marketing finance, became CFO in 2003 and was appointed president and CEO in 2011.
Amadeus acquired biometrics company Vision-Box and payments specialist Voxel in 2024, and reported €4.6 billion in group revenue for the first nine months of the year.
Global travel technology businesses, whether B2B, B2C or a bit of both, face many challenges right now.
There are the usual economic, political and regulatory headwinds and the pressure from partners as well as shareholders. And, now there's generative artificial intelligence to manage and build into the budget too.
In an interview with PhocusWire, Amadeus CEO Luis Maroto, who has lead the company since 2011 and overseen two IPOs, discussed the outlook for this year, the company's M&A strategy and the challenges of AI.
The interview, which was conducted in late November 2024, has been edited for clarity and brevity.
Let's start with the economic outlook, we are seeing some layoffs, how should we think abut these kind of signals in the market?
It is very difficult to reach a conclusion. We have enjoyed very strong growth in the last few years, and our assumption is that things will become more normal. Normal means not the kind of growth we have enjoyed in the last few years, but something that is more in line with what we had pre-pandemic. That's our base case for this year. This is based also on the projections of IATA and many sources. It’s really in line with what we have seen pre-pandemic so, not years of further rebound, rebound is mainly over, but healthy growth. Saying that, you can also have some adjustments here and there, for different reasons. But still, we are assuming this year will be a positive year, not as strong as we have seen in the last couple of years.
You talked a little bit in Q3 earnings about mergers and acquisitions. As you look at the two acquisitions you made, on the biometric side and the payments side, do you expect one to develop faster than the other?
Both areas are growing very healthily for us and at the industry level. Payments is becoming a very important piece of the whole value chain. In general there are a lot of alternatives of payments, therefore for us, it is a very strategic area where we are investing organically and also doing some acquisitions.
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Biometrics has huge potential as a technology. We are all using biometrics in our daily leaves. We feel the potential of extending biometrics in the industry, not just what Vision-Box is doing, which is more related to airports and border controls, but one day this can be extended to hotels, to airlines and across the travel industry. We feel biometrics as a technology is one of the areas we want to really master. But payments as a business overall is very complementary and very important within our scope of travel.
You mentioned further acquisitions in payments?
In all areas of the business. We have acquired many companies in the past 10 years. Some are more bolt-on acquisitions that complement our offering, some are more independent, more strategic, bigger size acquisitions. We are looking for mainly three things. They need to fit into our strategy as a technology company in travel and within that there are three characteristics. We may be looking for technology. Biometrics is a clear example of a technology that we had a small initiatives in but not big enough. The second one is customers. If a company, apart from developing technology, has a range of customers, it’s positive for us. And, the third piece is the people, the understanding of the industry, because every time you buy something you need to understand what you are buying, especially in areas where you’re not so much of an expert.
We are very strong in some areas where acquisitions are difficult because there are less companies but in other areas where we are developing our business, there are possibilities to really add customers, technology capabilities and people. Therefore, we are continuously looking for companies that are complementary to what we do. We cannot do everything organically, that’s not feasible. The travel industry is very big, so there are always companies that can accelerate our growth and we have the financial capability to do so with our current balance sheet.
The final point that we consider is can we justify the price, whether it’s value for the company.
What are the factors that will drive the growth of NDC this year?
It's more adoption. We need to keep investing and complementing our platform to really provide the retail space with the use cases it needs. We need to do it in a way that integrates the different sources of content including EDIFACT, NDC, hotel content, rail content and whatever is needed for the travel agency to operate. And, so they can also integrate it into their mid and back-office and cover whatever use cases are coming to the table, any disruption, interlining etc. This is what we are doing, we're trying to develop a solution which could be very effective, very efficient and in my view, will generate incremental growth.
Can we avoid the mistakes of the past 10 years as we move from legacy to offer and order?
When there is change in technology, there is always challenge because there is a transition. We are trying to be ahead of the curve. Offer and order is an initiative, originally from IATA on how it sees the future, integrating the merchandising piece and order piece. We are offering a solution that allows for a transition between the two systems.
There is always the need for transition because the travel industry is complex. We are moving people around the world, there are disruptions, there are changes, there are alliances. Not everyone is moving at the same speed. We will need to really operate NDC within two worlds, the current world and the future world. I’m a strong believer that collaboration is a must for these transitions so we are here to collaborate, and we play an important role in this industry. So, as far as we are all aligned about the benefits that this is bringing to the industry, I’m sure we can support the transition in a good way.
Saying that, transition takes time. To migrate from where we are today to something completely new, with all this complexity, will take years. Some airlines are more keen to jump into the pool, some will take a bit more time.
How do you think about what happened with American Airlines and what’s happening with Turkish Airlines?
Each airline has their own way of approaching the future. In my view, what is important is the traveler, who is the one that is finally paying for ticket. How do you want to distribute? How you want to approach your commercial strategies? Of course, we are respectful of that. The more they look into solutions that are in the interest of the end traveler and the more we can collaborate in the value chain, the better for everyone because at the end that's the way to really approach things. You can always say "this is my direction, this is my end game and I would like my partners to support me with that," and this is our approach. With American Airlines we still have a very constructive relationship and discussions as well as with Turkish. We are always engaged with customers, we try to convince them about what we feel is the best for the industry and themselves. Of course they might take their own views about how they want to sell and distribute their content.
Technologies are a means. The use of this technology and how we are able to adapt to the opportunities it is offering is how we make it disruptive.
Luis Maroto
How disruptive a technology do you think AI is in travel?
We have been using AI for the last 30 years, so this is not new to us.
All technologies are somehow disruptive — cloud is a big matter, AI is a big matter. Now we talk about generative AI and the jump this represents for the industry. I don’t think the technology itself is going to be disruptive. Technologies are a means. The use of this technology and how we are able to adapt to the opportunities it is offering is how we make it disruptive. How we integrate AI into our solutions, how this is going to impact the way we serve the traveler at the end. AI is going to be important, it is a technology that has a lot of potential but it is going to come with challenges.
We created an AI office in my CEO office that is ensuring we have an AI ethics framework in how we operate, make sure it is reliable, you know, the quality and the data privacy. We are also signed up to the EU AI pact.
There's a lot of talk about the potential for AI agents to disintermediate. It could be disintermediation of a travel management company, a leisure agent or even a GDS or another aggregator. What’s your view?
There is always a need for content aggregation which is the role we play and there is a need for a travel agency or adviser. You can use AI but, at the end you need to get to someone, at some point, in my personal view, who can help you with some of the decisions depending on the complexity of the travel. So, AI in my view is complementary and something that it going to give us opportunities to improve the way we manage travel. Saying that, the content aggregation, the comparison of offers and the people trying to look for alternative offers, is part of the role we have played and I believe it will be needed many years from now.
How has your management style changed over the years?
With age and experience over the years, it has evolved. There are things linked to the person, characteristics linked to us, which are related to what we value. I value transparency, leading by example and that people respect humans in general, especially in a company so global and so diverse. There are some things you learn. I believe I am less focused on myself than I was in the beginning, thinking I had to show and demonstrate because I was new and people were looking at me all the time. This is not the case any longer, so I’m more thinking about the organization and being sure that Amadeus is bigger than myself because one day I will not be here and many people in the management team will not be here. It's being sure that without us Amadeus is going to keep growing and being more effective.
Is there a piece of advice that someone gave you at some point that you still live by today?
We’re all influenced by family so probably my father influenced me a lot. He was tough, but he was some of the things I mentioned. You need to work hard, set an example and do your best and then things will result or not but at least you will have done your best. This is the way I try to operate.
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