Things are happening in the world of online booking tools
2016 has been a busy year in the relatively quiet world of online booking tools.
At the Business Travel Show in London earlier this year, Amadeus unveiled its new-look booking tool based on cytric, the tool it had acquired as part of its takeover of i:FAO in 2014.
In the intervening years the integration of cytric into Amadeus’ existing e-Travel Management (AeTM) booking tool was spearheaded by Florian Tinnus.
In April, Tinnus told us that cytric and e-Travel and AeTM would sit side by side for existing customers and that they would be migrated over the next 12 to 18 months. The two tools are used by more than 11,000 clients, with cytric particularly strong in Germany.
Two weeks ago, rival technology company Sabre announced it had appointed Tinnus as its new vice president of global sales and account leadership for Sabre Traveler Experience with a focus on “developing a global commercial strategy to drive and expand corporations’ adoption of Sabre’s integrated mobile solutions for booking, itinerary management, virtual payments and expense management”.
Fast forward to this week. On Tuesday, American Express Global Business Travel announced an agreement to buy travel technology provider KDS. The deal has been much touted and denied by executives on both sides but has now happened.
Announcing the deal, Amex GBT’s chief commercial and technology officer Philippe Chereque said: “We are bringing together an industry-leading online solution and travel management company to create the first seamless end-to-end experience centred on the modern business traveller. This will also enable us to provide GBT customers with a proprietary door-to-door online booking tool (OBT) supported by our new technology infrastructure.”
GBT’s Chereque added: “As a part of GBT, KDS will have access to a strong brand, significant resources, broad geographic reach and a large global customer base. This will open up new possibilities for both businesses, and allow us to provide KDS’ innovation to more companies than ever before.”
American Express Global Business Travel says it will continue to support other online booking tools across global marketplaces.
The transaction is expected to close in the fourth quarter of 2016.
So what is this transaction about? Our chart this week shows KDS’ financial results over the past four years (ending 31 March).
Continued after chart
It shows clearly that the investment in KDS is unlikely to be about adding to the bottom line – the margins are currently thin and it crept to a small loss last year despite improved revenues.
Our view is that the transaction is more about the increasingly central role played by technology in travel management. HRG recognised this with the spinout of its technology and expense management arm Spendvision into Fraedom last year.
The question is now where this leaves Carlson Wagonlit Travel (CWT), which new Amex GBT CEO Douglas Anderson left abruptly in April. CWT held a minority stake in KDS and Andrew Waller, the company’s VP for global business transformation, is on the technology company’s board. It will be interesting to see where this now goes.