Once travelers have decided to book a trip, they don't want to jump through hoops to pay for it. Travel companies should prioritize ways to making paying as easy as possible.
Travelers across the board want a future where technology makes payments easy and seamless.
In fact, that’s their top expectation of the travel industry in the next 10 years, according to a new survey commissioned by Amadeus. Specifically, they are open to paying for travel with cryptocurrency, in a virtual reality, or via facial recognition.
The topic itself is not a surprise, but seeing it highlighted as the top tech interest for travelers was enlightening, said Decius Valmorbida, president of travel for Amadeus, which offers a global distribution system and other tech services for the travel industry. That type of insight is what helps inform Amadeus on future investment.
“The topics are not new in itself — but when you go to the detail of the application of how this is going to shape and manifest itself in the near future and how people expect to use that technology in the future, you have nuances that can provide insight on how to prioritize investments and where you should be focusing that adoption,” Valmorbida said.
The company’s latest such study — Traveler Tribes 2033 — shows that consumers are increasingly expecting that new technology will be a natural part of various aspects of travel. The study categorizes people in four categories, based on how they expect to use technology when traveling. The data is based on an online survey of more than 10,000 travelers from 15 countries conducted by Northstar Research Partners in August 2022.
With emerging technologies — like biometrics, artificial intelligence, and virtual reality including the metaverse — combined with changes post-pandemic, Amadeus wanted to better understand how travel patterns are changing, Valmorbida said.
As far as the interest in payments, Valmorbida is happy to see it.
“Because we’re now making moves and long-term investments towards the payments business,” he said.
Outpayce, an Amadeus subsidiary, is expected to be awarded an eMoney license, meaning Amadeus can be directly involved with financial transactions, and it will be easier to partner with financial institutions to offer better services.
Other Tech Investment
Aside from being open to emerging technologies, the report highlighted that travelers want sustainable options and are more concerned about data privacy and cybersecurity. The privacy issue is especially important for emerging tech like biometrics, which are reportedly expanding throughout airports in the country this year.
“Even though biometrics is, across the board, something that people are willing to adopt, you have to tackle the concerns as well. Otherwise, you’re not going to have full adoption and therefore the full return on the investment you’re doing,” said Paco Pérez-Lozao Rüter, president of hospitality for Amadeus.
With hotels, Amadeus is continuing to work on tech to create operational efficiency as well as helping them differentiate themselves and foster repeat business. The company last fall reported that it continues to expand its portfolio worldwide, which now includes more than 700 hotels and resorts in more than 80 countries.
One of the ways hotels want to differentiate themselves is by offering more local experiences.
“We are also trying to invest and put a little bit of money and see how we can help create that environment,” Rüter said. “People are looking for more experience and less transactional travel now.”
Any of these enhanced tech services could come from Amadeus strengthening its own technology, partnering with other companies, or making additional acquisitions.
“Wherever we see an opportunity that makes sense, we would go for it, for sure. That remains unchanged,” Rüter said.
Much of their sentiment about tech investment was in line with the company’s venture capital arm, which late last year highlighted some immediate focuses on sustainability, flexible booking, and automation.
It’s all part of what Rüter said is the company’s highly focused ultimate goal of connecting different pieces of the ecosystem, from one company’s inventory to another, to create a seamless end-to-end travel experience. That vision is far away industry-wide, though. First, the travel industry needs to catch up with the rest of the industries.
“Hopefully, maybe one day, you can service a customer in an individualized way across the whole portfolio,” Rüter said.
“Today, most of them really work in silos from a technology point of view. Stitching that together so that you can serve complex cases, such as travel disruption, requires that the systems talk in real time to each other.”
Amadeus, like the other major global distribution system companies, is not yet fully recovered from the pandemic. Amadeus reported that revenue in the third quarter of 2022 was $1.2 billion (€1.21 billion), a 13.2 percent decrease from 2019 but a 64.7 increase from 2021.
Felix Dannegger, a consultant for the airline industry, previously said that he questioned whether business travel, for example, will ever return to where it had been. And with talk in Europe, especially, of doing away with flights between destinations that could easily be reached by train, that could also prevent a full recovery.
He expects the companies will have to focus on other areas of the business to see a full revenue recovery in the long run.
Unlike Travelport, Amadeus has a growing area of business that provides technology to the hotel industry. Revenue in the third quarter of 2022 for “hospitality and other” products was very close to meeting the level in 2019, at $202.7 million (€204.8 million), led by hospitality products.
Amadeus and other established companies in the industry do often receive criticism, particularly from startup founders who envision a new way of doing things. Valmorbida points to the partnership with Microsoft on several projects, including the full transfer to the cloud by 2025.
“If we’re really going to measure tech by tech, tech companies like Microsoft, most of the airlines, and the largest and most successful brands in hospitality have chosen us to decide to revamp their technology,” Valmorbida said.
“I think there are lots of people that see the travel distribution business as something that is primed for disruption, and they would love to have the possibility of shifting volumes from what today is on the GDS to alternative ways of distribution. Being the incumbent, we feel very at ease with that situation because I think year after year, we have shown growth on that business line, we have seen more adoption, more users, more transactions.”
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Photo credit: Marriott International is contracted with Amadeus to use its central reservation system. Pictured: Marriott Marquis Chicago. InvadingInvader / Wikimedia