Travolution Innovation Report: Why travel needs to rebuild to focus on value

Travolution Innovation Report: Why travel needs to rebuild to focus on value

Amadeus’s Decius Valmorbida says innovation is key as travel unlocks its £5 coffee potential

As Travolution launches its 2021 Innovation Report at this week’s European Summit Decius Valmorbida, president of travel at report partner Amadeus, assesses the impact of COVID-19 and praises the sector’s resilience and inventiveness.

What are the key lessons Amadeus has learned during the pandemic about how the travel industry needs to Build Back Better after the pandemic and what role will investment in technology play in that?

Whichever way you look at it, COVID-19 meets the definition of a black swan event perfectly.

Unpredictable, infrequent and with significant impact, such events wreak havoc, but they can also lead to positive long-term change.

Naturally, everyone involved in the travel industry is asking when bookings will return to anything near what we might consider ‘normal’ levels.

I can’t answer this question with certainty as there are simply too many variables at play but in my opinion it’s not the only question travel companies should be considering.

Personally, I think the industry will shift the focus from volumes to value, as we look to rebuild travel.

Compared to other industries it’s remarkable how little value is attached to the travel product, despite most people agreeing that travel enriches their lives.

Coffee shops are experts at merchandising, so much so that it’s now accepted a cup of coffee can cost as much as £5.

The question for the travel industry is: how can we help travellers place a higher value on our product? So that as travel returns it is on a more sustainable long-term footing.

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Here the industry needs to look hard at the experience on offer. Was the experience of traveling in 2019 really that compelling, and where can we create additional value?

Individual actors in the industry have worked hard in their own silos, with airlines adding premium flat beds and airports introducing fast track services, but there’s never been a focus on the traveller’s entire trip.

Thinking beyond individual silos and taking the end-to-end view is travel’s chance to improve the experience and unlock that £5 coffee equivalent.

The pandemic has forced everyone in travel back to the drawing board, to pivot and to consider their role in the value chain as we rebuild the industry.

Specifically on the investment in technology, over the last few years, the industry has gone through a gradual evolution to meet the changing needs of savvy travellers and to leverage the latest technology and innovations that are transforming society as a whole.

Personalisation, mobile, frictionless technology, chatbots, artificial intelligence, and robotics are just some of the technology that relate to what is feeding this evolution of travel.

Since COVID-19, we’ve seen some of these trends accelerate so we can give travellers the confidence to travel in a new and better way.

What sorts of technologies is Amadeus planning to focus resources on developing in coming years, and has this changed as a result of the impact of COVID-19?

Despite the fact that we continue to navigate the impact of COVID-19, the travel industry is actually accelerating the pace at which it is digitally transforming.

Driven by the need to do things differently as a response to COVID-19, the acceleration of standards like NDC and OneOrder, and a convergence of technologies including public cloud, digital identity and open platforms, it’s becoming possible to deliver this end-to-end vision.

We’re not going to be talking about a premium offering that begins when you board the plane and ends when you disembark.

Instead, providers of travel will be more interconnected than ever before and will increasingly consider their role as part of the complete trip.

Let’s take each briefly in turn:

Digital identity – with permanent digital identities like Amadeus’ own Traveler ID solution, it’s possible to recognize the traveler at each stage of their trip like never before.

This is an exciting new foundation that allows each travel provider to deliver its part of an end-to-end service based on individual traveler needs.

Open platforms – our own open platform approach creates a true marketplace meaning airlines can connect to other travel providers (rail, ride hailing, hotels, airports, digital-first companies).

This makes the airline’s own processes available to partners so end-to-end services can be packaged, sold and serviced at scale for the first time.

This helps airlines to move from being order-centric providers to end-to-end retailers.

Public cloud – supports the hyper-scale flow of data between different travel providers. For example, it’s much easier to connect airlines to airports so they can collaborate on shared biometric identity infrastructure when it can be pre-integrated in the cloud.

Recently, Amadeus partnered with Microsoft to harness cloud technology and explore new products and solutions to create smoother travel experiences in the future.

NDC – helps airlines to retail more sophisticated offers, packaging products from other providers that make-up an end-to-end travel service.

NDC is one critical step towards enhanced travel retailing. Adoption of the standard is scaling rapidly and we expect all Amadeus travel sellers to be NDC-ready this year.

OneOrder – with OneOrder, standards are taking shape that deliver an Amazon-style shopping basket to which travellers can add not just airline products, but any third-party services.

Our analysis for the Innovation Report indicates that travel firms will continue to be more reliant on third party providers of technology and digital solutions than other business sectors. How do you think the pandemic changed the nature of partnerships between buyers of travel tech and suppliers?

Travel is an interconnected industry and has a strong record on collaboration. Airlines, airports, travel agents, hotels, rail companies and others need to exchange information with each other about the traveller.

After all, these different companies are all involved in delivering the end-to-end trip experience. Take aviation alliances working on safety for example. Collaboration is crucial.

The travel industry realised its interconnected nature many years ago and has embarked on ‘collaborative digital transformation’, where companies that compete with one another also cooperate to improve the digital infrastructure on which they all rely.

One of the industry’s initiatives right now, and an important area for collaborative innovation, is digital identity.

Being able to automatically identify the traveller using biometrics at each stage of the trip means travellers can check-in at the hotel or when hiring a car, not to mention navigating the airport or train station without the help of agents.

Amadeus Traveler ID provides travellers with a single, reusable, digital identity so they can identify themselves at the hotel, when hiring a car or at the airport, without relying on paper documents.

We’ve also added capabilities to provide a secure and frictionless way for passengers to show that they have the health documentation needed to travel in COVID-19 times.

This includes COVID-19 test results, vaccine certificates, immunology tests or recovery certificates.

This is going to be key in developing a safe travel ecosystem, and will be critical to unlocking travel further now and in the future.

What gives you confidence that the travel industry will bounce back strongly from the pandemic and do you think that the recovery and rebuild will happen more quickly than many people have predicted?

Despite all the uncertainties, we remain optimistic about the long-term future of travel.

Fundamental drivers behind travel – to see family and friends, to explore new cultures, to do business – remain.

Being at the heart of the travel ecosystem, we know how to harness the power of technology and the wisdom of our customers and partners to reignite the joy of travel.

Working together to rebuild, we can ensure that travel emerges as a global force for progress once again.

As in all sectors, the key factor is innovation. Among our families, friends, colleagues and customers, we have witnessed extraordinary resilience and inventiveness.

The travel sector – which had already undergone a gradual evolution in the preceding years, largely driven by technology – has reinvented itself in a matter of months.

While we will not be going back to ‘normal’, there is a new normal, adapting to fit the reality of the pandemic.