Amadeus begins shaping hotel platform with first big name
Amadeus has sealed its yearned for deal to develop a reservation system for a large hotel group – in this case InterContinental Hotels.
The global distribution giant has been making moves on the hospitality sector in recent years and its ambitions in the sector are no secret.
In late 2013 it acquired Newmarket International, a specialist in group and event technology, for $500 million with Amadeus saying it would bring hospitality expertise and key customer relationships to the business.
Analysts speculated at the time that Amadeus would get its launch partner for the hotel IT platform in 2015 and thereafter seek to monetise it through the addition of mid-sized players.
The GDS also provided insight into its thinking on hospitality around the time of the deal, hinting at being a “viable competitor” to Micros (bought by Oracle last June for $5.3 billion) and the desire to offer a broad menu of services to hotels based on a fee per usage model.
Putting the ‘next-generation’ and ‘revolutionise’ hyperbole aside, the IHG announcement is interesting in light of the ‘community model’ being talked about, which Amadeus likens to what it has in place for airlines.
Amadeus describes it as:
“…a system being shared by a number of companies with a percentage of the transaction fee allocated to fund the continual development of the infrastructure.”
The hope is that it will put Amadeus right at the heart of hospitality distribution and that on top of IHG’s 4,800-strong property portfolio, it will attract other large hotel players to come on board.
Among benefits for participants, the GDS talks about a “feature-rich and flexible” Guest Reservation System which will run in line with a hotel’s other systems “creating a competitive advantage” and being part of a community of travel suppliers.
It also talks about the ability to drive the direction of the technology, benefits in terms of scale and cost sharing and the ongoing investment and development of the system.
IHG says that being the initial partner will mean it will have input into the design and shaping the user experience hopefully giving it a step up from other community members.
The GRS will be rolled out in phases in 2017 and replace IHG’s existing Holidex system. It can also run alongside the existing system which is important in terms of reducing risk.
Amadeus will build, maintain and own the cloud-based system with members paying a transaction fee, a model which could be attractive to hotel owners concerned about distribution costs, big part of the outlay after employees.
Questions remain over who might join IHG in the community. Marriott International, for example, has had its Marsha system in place since the 1980s.
Whether it can work in hospitality in the same way as for airlines is also unclear.
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