Consumer demand for travel hasn't slowed down yet. Numbers from the travel tech giant Amadeus underscore that momentum.
The non-air products that Amadeus offers are the closest to recovering to 2019 revenue levels.
Revenue last quarter for “hospitality and other” products was very close to meeting the level in 2019, at $202.7 million (€204.8 million) in revenue, led by hospitality products, according to an earnings report the Madrid-based travel technology group gave on Friday.
Amadeus had reported in September that global hotel occupancy exceeded pre-pandemic levels in July and August. On Friday it forecasted a strong fourth quarter.
“The quarter-on-quarter progress Amadeus had was enabled by consistently stronger revenue performance across our revenue lines, supported by volume growth, as well by new customer implementations across our portfolio of hospitality solutions,” said Luis Maroto, president and CEO of Amadeus.
The company signed Marriott International as its second large customer for its central reservation system earlier this year.
Maroto said the company continues to expand its portfolio worldwide, which now includes more than 700 hotels and resorts in more than 80 countries.
Total revenue for last quarter was $1.2 billion (€1.21 billion), a 13.2 percent decrease from 2019 but a 64.7 increase from 2021. North America was the best-performing region last quarter, Maroto said.
Even though none of the products have reached 2019 revenue levels, they all did considerably better than during the same period in 2021.
While the company’s flagship air distribution product is taking the longest to fully recover, it had the biggest increase in revenue of all products since 2021 — a 90.8 percent jump to $567.1 million (€573.1 million).
“Airlines are quite optimistic at this point, and the industry is optimistic,” Maroto said. “And this is mainly because we still have recovery — the airline capacity is not at the 2019 levels.”
He added that even though there is some variation each month, with some airline cancellations and less busy schedules than the industry had hoped, the general trend is headed upward.
“When you see the projections, everybody’s expecting to really increase capacity from now to the summer of next year,” he said. “When I talk to customers, they feel optimistic about capacity expansion and about hiring people.”
He believes that bookings in Asia, as it begins to reopen, will help drive the upward trend.
“Our financial performance and cash generations are getting stronger each quarter,” Maroto said. “We see the travel industry continuing to advance towards its recovery and, setting aside macro and geopolitical considerations in the short term, we are confident about our prospects for the future.”
Maroto said the company plans to continue evolving its hospitality platform and investing in airline IT offerings.
The company is also accelerating its shift to the cloud, he said. Amadeus is working on a multi-year plan to transfer to the cloud in partnership with Microsoft, expected to lead to computing savings.
But it will take time to see the full financial benefit of the Microsoft partnership, according to Till Streichert, chief financial officer for Amadeus.
“Things are on track, and we continue to work on this,” Streichert said. “This is a multiyear migration and, of course, you would actually expect to see the benefits actually more towards the end of the migration because, during the migration, you still carry, to some extent, the cost of both.”
Amadeus said earlier this year that it plugged its Cytric Travel & Expense platform directly into Microsoft 365, which Skift reported led to deals with Accenture and Melia Hotels International.
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Photo credit: Shown is a guest room at W London Leicester Square, owned by Marriott International, which is a client of the central reservation system owned by Amadeus.