Three-figure increase in online bookings
Nowadays, practically everything to do with travel can be arranged on the Internet. Travellers can search for the cheapest flights, check hotels and perhaps book a hire car.
The Amadeus system currently has a number of travel agencies which only exist online, using the Internet as their single sales channel. The online segment has grown rapidly, now making up around 15 percent of all Amadeus bookings in the Scandinavian market.
“It really took off three years ago,” explains Joachim Kihlström, Key Account Manager at Amadeus Scandinavia. “Without any exaggeration, we’ve seen a percentage increase in three figures since then. But now, things have stabilised and the rise is no longer as meteoric.”
Once Amadeus had had online travel agencies in the system for a few years, it became clear that there were major differences between traditional travel booking and online bookings. The biggest difference was the considerably larger number of enquiries about price and availability. In 2003, Amadeus had around 20 million such enquiries a month through online travel agencies, but now that figure is up to 280 million a month.
The huge increase in the frequency of enquiries caused problems for the airlines, who were receiving many more enquiries through their booking systems but relatively few actual bookings. In some cases, the airline’s booking systems have not been adapted to this enormous increase in enquiries.
“We understood that purchasing behaviour would be different on the Internet, but we had no idea just how different. After a little investigation, we found that customers often submitted the same types of enquiry about the same destination. It was more or less always about how many holidays were still available at a particular point in time at the lowest possible price,” explains Kihlström.
The solution to the problem was what Amadeus now calls “Master Pricer”, a price-based search tool for online travel agencies. Since many enquiries about a destination appeared repeatedly, a system was created which could remember all enquiries made in relation to a holiday booking. When an enquiry was then repeated, the earlier search result could be retrieved from the memory of the Master Pricer tool. This meant that not all the enquiries needed to go through the airlines’ booking systems.
“Master Pricer became an efficient solution both for online travel agencies and airlines. It is an advanced setup with almost full reliability. It significantly cuts the number of transactions dealt with by the airlines, while at the same time, the travel agencies note a higher frequency of bookings,” comments Kihlström.
Amadeus currently has around 80 percent of the market for online travel via travel agencies in Scandinavia. The segment is still growing more than any other, and Kihlström believes this growth will continue, although not at the same rate as before. He forecasts that in five years, the segment will account for around 30-35 percent of all Amadeus bookings.
“In the long term, the trend will be for the large traditional agencies to move online to a greater extent and capture a further share of online bookings,” concludes Kihlström.
