Big Interview: Amadeus poised to open API as part of three-pronged external approach to innovation

Within months the European Global Distribution System and technology giant says it will have completed a period of beta testing with third party developers on open API technology links. Continue reading →

Amadeus is poised to add the third a final strand to its global innovation programme which it hopes will see its ambitions to shape the future of travel and technology realised.

Within months the European Global Distribution System and technology giant says it will have completed a period of beta testing with third party developers on open API technology links.

Although by no means the first in its sector to adopt such an approach, Katherine Grass, head of innovation and ventures, said she expects Amadeus for Developers to be a game changer.

“Open APIs allow us to open up certain data and see what goes,” she said. “The programme is going to be as rich and as innovative as possible so developers can really see and understand travel.

“Independent developers may have great ideas and understand development but do not necessarily understand the travel sector.

“We are on a roadmap of discovery to understand what the uptake will be. We think we have a clear idea of what type of data will be interesting to third party developers to launch ideas on.

“The other part of this for us is about discovery, about ways of combing data on air, hotel, airport location, lounge pass to make something new that we have never thought of.”

Structured approach

Amadeus for Developers is part of the three-pronged external approach to innovation at Amadeus that also includes a venture fund investing in start-ups and a strategic partnership programme.

Grass said the firm takes a structured approach to innovation that is focused on delivering real value for its airline, supplier and trade distribution customers.

“At Amadeus it’s about a practical approach to take ideas and be able to deliver value for our customers,” she said.

“We’ve approached this in a very structured and impactful way firstly with our the global innovation programmes and with six strategic themes we think will most impact the travel industry.”

Those six key themes are:

• Blockchain – Amadeus is working on a number of discreet use cases for blockchain including payments solutions, loyalty and baggage tracking in partnership with Accenture;
• Messaging platforms like chatbots – Amadeus is developing its own chatbot technology to reflect the fact that customers are increasingly looking for more human interactions with brands;
• Improved conversions – technology that can help firms sell more by attracting eyeballs and driving loyalty;
• Operational performance – this covers a broad range of back office functionality like cyber security and disruption management;
• Extended content – how the GDS can distribute a wider range of travel product like in-destination experiences, transfers and insurance through its platform;
• New disruptive models – Amadeus will look at new models both suppliers and consumers are adopting in the market and how it can accommodate these to remain relevant.

Grass said it was important for a large corporate like Amadeus to learn how to move quickly when looking to innovate.

She said one of the goals of Amadeus’s innovation programme is instilling internally the sort of agile ethos third party partners tend to adopt.

“We need to be more agile, we need to change our processes and we are absolutely trying to make that happen.”

Ideas and concepts, whether external or developed internally, can be quickly adopted and exposed to real-life testing by key Amadeus clients the firm will use as sounding boards.

“We need feedback from customers, and to extend our reach we need to be working with ideas external to Amadeus but also internal to Amadeus,” said Grass.

Moving quickly

As a global entity Amadeus sees its local offices as its eyes and ears on the ground looking for opportunities that will then be evaluated against its six key global innovation themes.

“First and foremost we will look at whether it’s in our strategic interest. This is the first important step and probably the hardest. Ninety nine times out of 100 it will be no because we need to focus.

“We will look at the use cases we are prioritising and if it’s a no we will give pretty concrete feedback as to why. If it’s a yes we can then move quite quickly.”

Grass said a start-up investment can be concluded in a matter of a few months, a partnership could be agreed within weeks after which a project plan is worked on together.

The run rate for strategic third party partnerships has the potential to be much higher than start-ups, but Grass said it is still early days.

As much more of a self-service model, open API developer partnerships will eventually outnumber partnerships and start-up investments.

Amadeus has made just eight investments in start-ups in the three years it has been operating Ventures, from over 1,200 that it has come across, and is in the process of closing two more.

Amadeus operates very much like a financial investor, and is often in competition with other venture capitalists.

The firms it invests do not have to relocate or agree exclusivity terms. Grass said: “We don’t insist on any heavy-handed terms and conditions. They operate their model and what we help with is reach.”

Grass said Amadeus aims to complete three to five deals a year and although it originally expected each to be worth around €3 million the average has been €500,000 to €1 million.

“We have found ourselves investing at a much earlier stage of companies’ development, usually at seed or Series A funding, hence the deal sizes have been lower,” She said.

Start-ups Amadeus has invested in include Bluesmart, a smart luggage firm, FLYR, a predictive analytics specialist based in San Francisco, and Cabify, dubbed the Uber of Latin America.

Senior level buy-in

In terms of what firms are looking for from innovation there are differences between the leisure travel sector and corporate travel.

Grass said partners in the former tends to want to discuss conversions and personalisation as well as upselling and add-ons.

The latter’s focus tends to be disruption management, extending content and ways to optimise the value of the business trip for the corporate.

Grass said, vitally, the innovation and ventures division at Amadeus has committed chief executive-level sponsorship.

“For our CEO and executive committee, innovation is one of the strategic priorities. It’s absolutely supported at the top by the CEO.

“To be able to survive in the future you need to be able to focus on innovation. But innovation for us is about being practical.

“If you start trying to find that idea that’s going to change the world in 10 years you are going to get side tracked. In the future we are clearly going to have a much more diverse portfolio of offerings.”