COVID-19: Redefining travel in a world of social distancing
Amadeus shares an interesting post written by Wolfgang Krips, Senior Vice President, Corporate Strategy of the technology company where he expresses his valuable vision on the reopening of tourism
By Wolfgang Krips, Senior Vice President, Corporate Strategy, Amadeus
Predicting the future, as well as the opportunities and challenges it will bring, is at the heart of any strategist's job.
It is an exercise that includes gathering all available information, studying all the data, reviewing the assets and capabilities of the company, and identifying emerging trends to adapt the strategy as necessary. Speed is everything to make sure companies take advantage of those opportunities as soon as possible.
When it comes to traveling, the past decade has been a busy one for strategists in itself as we have witnessed a rapid transformation in the industry. Companies had to quickly include mobile, digitization and personalization services in their offerings. We anticipated and responded to these trends quickly, but all of that was not enough to prepare the industry for the impact of the COVID-19 pandemic on our industry.
Fortunately, we are beginning to see the first signs of recovery. In this blog, I want to share the short and medium term drivers that we will be able to see in the industry and how we are preparing to help our clients take advantage of them.
From local to regional to global
Although it is still early to talk about the recovery in travel, we are seeing some encouraging signs in the market. April was an unprecedented month in the industry, as all regions of the world were hit (to varying degrees) by the virus. Since then, as I write this, the health crisis appears to be gradually improving, however, not unanimously, from country to country, east to west, and we are beginning to see early signs of recovery led by domestic travel in certain countries.
As for the airlines, in recent days we have seen announcements from various airlines, both full service and low cost, reporting that they are increasing their capacity before the summer season. According to OAG figures, the programming capacity of the airline industry in general has returned to 35% per year, as of June 1.
That said, the situation is still far from a full recovery. IATA has revised its forecast and now believes it will take 2-3 years to return to pre-COVID volumes, and we must expect different impacts and realities for each segment of the trip.
Domestic travel will certainly be a main theme for this summer season in the northern hemisphere, mainly because it is easier to follow the health requirements of governments and because car transportation is easier, it limits contact with other travelers. But we also expect to see a recovery in regional travel, particularly in Europe and in specific areas or “circles” (China and South Korea, southern and central Europe, Australia and New Zealand) and between countries with similar restrictions or impacts due to the COVID-19.
Our Hospitality business, which has a large customer base in the United States, is a good example of this trend. There, more than 75% of reservations come from domestic travelers and we are seeing an increase in this volume. This preference for local travel is clear in Asia as well, where we see an increase in domestic bookings.
Adapting to new realities
Our clients in all segments, whether they are airlines, travel agencies, airports, destinations, etc., should consider these traveler behaviors to adapt their offers accordingly. Furthermore, for these early signs to become appropriate seeds for recovery, industry players will need to adapt and prepare for the new expectations of travelers.
Fortunately, technology is here to help you through this process. We see that focusing on the traveler will be key in this new normality and to face recovery. Whether it's with improved passenger identification, self-service options for boarding airplanes and checking in at hotels, the easier it is to limit human contact, the sooner we'll see a faster recovery as an industry.
We know that people long to travel. We are already seeing it with domestic travel, but we also know that they want to feel as safe as possible when they travel again. The fear of a new outbreak of the virus is still very present. That is why travel companies must establish clear practices and protocols to guarantee hygiene, social distancing and compliance with the regulations of each country.
Amadeus has been working on the technologies that will facilitate these non-contact trips, and we are certainly prioritizing them now. Just to mention a few examples, we have launched biometric pilots to improve boarding on airlines; We have self-service kiosks for airports that facilitate the delivery of luggage; And our hospitality solutions help hotels organize cleaning and support to ensure they are following the latest hygiene and sanitation protocols.
We are already working with our clients to help them adapt their current infrastructures and processes to the norms and expectations of the new normal. The good news is that the industry was already studying these technologies, we just have to accept them and accelerate their adoption.
In addition, and as already mentioned, the situation changes very quickly, so companies must be able to adapt as quickly as possible. It is not always easy as some travel providers still work on legacy systems and some systems are more flexible than others. And again, this is not a new trend. In the past two years, we have seen the benefits of open systems and cloud increase in combination with a use-based business model that enables companies to address new customer demands and technologies with easy adoption of our solutions and an acceleration of the time to value.
At Amadeus, we have been out of mainframes since 2017. Many of our solutions, like our Hospitality platform, are cloud-native, making them more agile and flexible to adapt to infrastructure changes, new trends, or different demands of travelers. Making the ecosystem the core of our business, combined with a well thought-out platform, will allow us to respond more quickly to the needs of our customers and help us to work with other industry players with ease. This means, for example, that if our customers need or want to work with another provider to adapt to the new behaviors and expectations of travelers, they can connect directly to our systems.
Traveler care, technologies based on SaaS (Software as a Service) and ecosystems were already emerging trends in the tourism industry. Amadeus is committed to helping our customers adapt to them so that we as an industry can move forward and begin the long road to recovery. Our goal is to support them to understand the new expectations of travelers and to be part of their future success.
This is a difficult time for our industry, but if we all work together, we can overcome it. Most importantly, we have the opportunity to redefine travel and make ourselves and the industry better for the future.