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Despite stalled growth in China, Brazil and Russia, a wave of newly middle-class travelers from the BRICs and beyond will start visiting international destinations in the coming decades — dwarfing the numbers we’ve seen thus far.
Amadeus is the “brand behind the brand” for companies ranging from Hipmunk to NCL and Lufthansa. The article downplays the pivotal role that Amadeus plays with global airlines, including being the Star Alliance’s official IT platform.
Participating in the annual corporate run in downtown Miami more than a decade ago, Tom Cates realized how under-the-radar his corporation really was.
The announcer welcomed groups from company after well-known company in Miami. Then he got to the 50-member group from Amadeus, where Cates is chief commercial officer for the North America region.
“He goes, ‘What’s an Amadeus?’ “ Cates recalled during an interview recently at the company’s Doral office.
The travel technology corporation, which has global corporate headquarters in Madrid, is accustomed to operating behind the scenes. While well known within the industry as a link between travel providers, sellers and buyers as well as a group that develops new technology and consults with companies for custom products, Amadeus has little name recognition with consumers.
“We always say we’re the brand behind the brand,” Cates said.
They could also be described as the brand between the brands, distributing data for airlines, hotels, rail companies, rental cars and other suppliers to travel agents, online travel sites and travel buyers. In addition to distribution, Amadeus also provides information technology services to airlines, hotels, cruise lines and others that include reservation systems, inventory or property management, search functions, bookings and a variety of other services.
Amadeus said it processes 40 percent of all air travel agency bookings worldwide; even more travelers encounter the company when they pay for checked luggage online, rent a car or book a hotel.
“You may not realize that you’re using Amadeus, but it’s getting you to where you want to go or where you want to stay,” said Maria Morato, the company’s head of internal communications for the United States and Canada.
Because the services provided by the company are so broad, Amadeus says it competes with a host of companies, including other distribution systems such as Sabre and Travelport as well as Google and Microsoft.
Henry Harteveldt, travel industry analyst for Hudson Crossing, said Amadeus is well-regarded, with a reputation as a technology innovator.
“Companies like Amadeus are the little blue crystals, if you will, in the detergent of travel e-commerce,” he said. “They help to create a better planning and shopping experience for us as consumers.”
Harteveldt pointed out that the travel industry has been dealing in e-commerce for more than 50 years, since American Airlines and IBM developed the system known as Sabre.
“Amadeus has really taken this airline distribution capability to new levels,” he said. “They’ve been a pioneer in terms of web, they’ve been a pioneer in terms of helping airlines do a better job of selling optional products to us. They had a very global perspective.”
The company was formed in 1987 as a global distribution system for four airlines: Air France, Lufthansa, Iberia and SAS. Amadeus used SystemOne, a computer reservations system founded by Eastern Airlines in Miami, to build the global distribution system starting in 1995 and then fully acquired SystemOne in 1998. That put Amadeus on the map in North America; several of the employees who work for the company in Doral today came from Eastern Airlines and SystemOne.
Nearly two years ago, the regional office moved from its previous Doral location to sleek new headquarters designed as a location where the company could showcase Amadeus’ offerings to customers from around the globe.
Amadeus started branching out into IT services about 13 years ago, and today has more than 11,800 employees worldwide and 73 offices around the world. While global corporate and marketing headquarters are in Madrid, the main site for product and development is in Nice, France, and operations and data processing are headquartered in Erding, Germany. Doral is one of four regional offices around the globe and the largest office in North America.
The company’s global distribution system was used for 477 million travel bookings last year, and more than 92,000 travel agency customers use the system. A publicly traded company that is listed on stock exchanges in Spain, Amadeus reports earnings in euros. In U.S. dollars, the company reported $2.1 billion in revenues for the first half of the year and $466 million in adjusted profits, both year-over-year increases.
About half of the 350 employees based in Doral work in IT, either on projects or in related services and support.
The location is also one of three that monitors the entire company’s systems in a “follow the sun” approach. During business hours in the Americas, employees keep track of real-time transactions and IT operations to make sure everything is running smoothly and to flag or troubleshoot issues that come up.
In recent years, the company has been focusing on helping travel sellers comb through data and present it in a unique way.
“Airlines told us and competitors years ago: ‘You provide great technology, but you don’t do a very good job at helping us differentiate ourselves,’ ” Cates said.
One new initiative that Amadeus has been working on, called Amadeus Featured Results, allows data to be curated to show the cheapest, fastest, most popular and sponsored travel options rather than just lists organized by price or time. The international travel site Vayama is the first to use the product, according to Amadeus.
“It’s one thing to take the providers’ technology and extend it,” said Roberto Nassiff, Amadeus North America’s director of technology services and solution center. “It’s another thing to become the technology provider for those companies.”
Alexandra “Alix” Arguelles, the company’s vice president for online account management and consulting services in North America, said many clients who come to Amadeus have a good idea but no idea how to turn that into a user-friendly site or app.
“We really want to build an infrastructure at Amadeus where if you’re starting out in the travel industry, you have a friend in Amadeus,” Arguelles said.
Adam Goldstein, co-founder and CEO of travel site Hipmunk, was in that situation. The company, which grew out of Goldstein’s own frustration with travel, started in 2010 with the goal of helping users find the best flights and hotels quickly. Options are sorted by “agony” and allow users to customize searches based on the most important factors.
“We didn’t really know what we were doing, and I think that was obvious to everyone we talked to,” Goldstein said.
After spending time in conversation with Amadeus at a travel industry conference, PhoCusWright, Hipmunk decided to use the company as its flight-data provider.
“Amadeus was just great to work with, very easygoing, very understanding of our technology needs, flexible as we were kind of learning things ourselves,” Goldstein said.
In addition to startups, Amadeus is helping established companies innovate as well.
While Norwegian Cruise Line sells cruises through Amadeus, the cruise operator also books airfare for passengers through the company. The two businesses are working together on a project to give Norwegian access in real time to a wider variety of airfare options rather than just using contract rates.
“They have been helping us through the brainstorming, the setup, they’ve made a lot of suggestions,” said Crane Gladding, the cruise line’s senior vice president of revenue management and passenger services.
The project is not simple: Already in the works for a year, it’s expected to launch in 2014.
“When you’re integrating thousands and thousands of flight options along with cruise bookings and redistributing those, it’s a complicated technology,” Gladding said.
With both Norwegian and Amadeus located in Doral, Gladding said the proximity made coordination easier.
“I have a feeling it wouldn’t have really mattered,” he said. “Our main contacts are traveling very frequently. They really don’t hesitate to get on a plane.”
Cates, who said he travels “all the time,” pointed out another unique aspect of working at a company with offices in multiple time zones: “What’s really interesting is when you have to have a global conference call.” ___