Platforms 4 Future
The role of data in the future of travel ecosystems
In our newest episode, we talked to Chritian Warneck — VP of Amadeus, the platform to connect the travel ecosystem about the challenges of market entry and intermediation when it comes to building a platform for the travel business.
Additionally, we learned a lot about the role of data and AI for todays and the future industry and why it is extremely important to keep innovating as a platform leader.
Amadeus is a platform acting as the heart of the travel ecosystem by connecting all players in the travel industry. This includes both travel suppliers like airlines, tour operators and hotels as well as travel sellers and buyers such as corporations and travel management companies.
As one of the top ten travel technology companies in the world Amadeus additionally offers IT solutions for airlines, an extensive hospitality portfolio aimed at the hotel industry and technology solutions for airports.
It was co-created in 1987 by four airlines companies: Air France, Lufthansa, Iberia and Scandinavian Airlines (SAS). Those four companies had a vision for an European and independent global distribution system which could counterweight the US airlines reservation system. Today, Amadeus engages around 18.000 employees from all over the world in more than 190 countries.
In the 1990s, when the internet developed massively, the travel market grew significantly. Many airlines were created and offered new routes, and technological platforms with powerful search tools became essential for finding and comparing travel offers.
Christian Warneck, VP & Head of Airlines Solutions Central & Eastern Europe at Amadeus, explains Amadeus had to face 3 main challenges to adapt to this market revolution: horizontal expansion complexity, a high barrier to entry and intermediation.
First, you need to consider the two sides of a platform business model with airlines and TAs setting very different requirements at the same time: airlines care about flight tickets sales, while travel agencies aim to offer a full journey package, including accommodation, transportation, insurance, etc. The latter has resulted in the challenge for Amadeus to expand horizontally.
Furthermore, the airline business comes from a long way: from paper tickets to a fully digitalized world with a complex setup which places the market entry barrier for new entrants very high.
And thirdly, Amadeus also needed to deal with very different levels of standardization in the travel ecosystem: this makes intermediation very complex as well.
Platforms create data
Christian mentions an interesting phenomenon: “platforms create data which wouldn’t exist if you did not have a platform.” Indeed, the data flowing through the Amadeus system enables them to create new data to improve efficiencies and create value for both sides of the market.
Continuing with the airline example, Amadeus can see where the demand is, regardless of which airlines are being searched, whereas airlines only see the demand for their own routes on their own website. However, they could benefit from the data registered by Amadeus to see, for instance, where they could open up new routes and better compete.
This is where data really brings value to both parties: the “travel researchers” and the providers.
Do you want to learn more about the role of data in the travel industry and hot to leverage data monetization? Check out the whole article or listen to our Platforms 4 Future podcast episode via your favorite streaming platform.
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