Traditional travel agents in India face an uncertain future due to the growth of online travel and the rise of low-cost carriers (LCCs) that pay agents little or no commission. To fight back against these trends, Amadeus, the Madrid-based global distribution system (GDS) company, developed a new web-based system that lets agents do far more than just book seats.

But the company knew it faced a tough sell getting the technology adopted in India. The Indian travel industry is highly fragmented with 20,000 agents accounting for over 80 per cent of the business. The vast majority are small businesses and, like small businesses elsewhere, they have a healthy suspicion of vendors trying to sell them the latest and greatest technology.

The agents reasoned that their existing ”green screen” booking terminals, which had changed little in the past decade, were adequate for the job of booking seats and checking schedules.

In addition, being a European company, Amadeus was aware of cultural challenges, and the perception that it was trying to tell agents in India how they should run their business.

”At the beginning, the agents were reluctant to upgrade their old legacy systems,” says Alain Simon, director of network services at Amadeus. “But once we showed them the advantages that the new system offered in terms of cost and functionality, they were hooked.”

The company decided cost savings would be a key factor in winning over the agents, as in recent years the travel business has become much more competitive in India. Online travel agencies are making big inroads into the market and so are proprietary websites operated by LCCs, traditional airlines and other travel providers. Even Indian Railways, once a byword for bureaucracy, now accepts bookings on its website.

For traditional travel agents, this has led to a massive loss of business. According to a recent industry report, their share of the Indian tourism market is predicted to drop from 32 per cent in 2005 to a mere 10 per cent in 2008.

In addition, the juicy commissions that airlines traditionally paid to ”incentivise” travel agents have steadily fallen from about 10 per cent of the ticket price in the mid-1990s to zero in many markets. Some airlines have even begun to charge agents for bookings made through a GDS such as Amadeus.

Amadeus’s new internet-based system is designed to help agents deal with these tougher market conditions. For example, there is a new web-based ”service fee manager” module that lets agents explicitly charge clients for each service they provide rather than, as happened in the past, claw back the cost through commissions.

The most obvious benefit, however, of using the new system is that it cuts the agents’ monthly telecoms bill. Amadeus previously connected its travel agents in India to its mainframe system through a proprietary network with local access via costly leased lines.

But by switching to a new web-based software, Amadeus hoped to wave good-bye to the proprietary network and its headaches. Its new network is, like the web itself, based on internet protocol, and is designed to offer high-speed access at a low-cost using ADSL technology.

India’s telecoms sector has developed rapidly in recent years. Nevertheless, in 2004, when the project began, there were still some areas of the country that did not have ADSL access. So, about 20 agents in out-of-the-way localities had to connect to the Amadeus IP network via small satellite dishes (although they too are now about to migrate to ADSL).

Having convinced the agents with the promise of cost savings, Amadeus had to find a technology partner to ensure that the implementation of the new system went flawlessly. Amadeus previously used Sita, the specialist network operator for the airline sector, to run its network in India. But for its new IP-based network, Amadeus opted to bring in an outsider, BT Global Services.

”BT Global Services convinced us they could do what we wanted. Sita was very good at talking to the established telecoms industry in India, but we didn’t feel they could deal with the new service providers,” says Mr Simon. ”BT Global Services was prepared to talk to anyone and everyone.”

BT realised that the project’s success depended on close collaboration with all the interested parties. It visited the Amadeus data centre in Germany to better understand the applications, and held face-to-face meetings with suppliers, partners and the travel agents themselves.

Mr Simon says Amadeus was particularly impressed with BT spending a lot of time investigating the applications and finding out how the local agencies worked.

BT had to deal with four different providers of ADSL in India. That slowed things down and led to a three-month delay in getting all the travel agents online. Apart from this, the project went smoothly and three years on, Amadeus can offer multimedia and communications applications that would have been unthinkable with the old ”green screens”.

For example, Amadeus will soon offer its Indian travel agents a ”virtual call centre” capability similar to the ”screen pop” used in a traditional call centre. When an existing customer calls, the system will automatically ”pop” the travel history of the caller on the computer screen, saving the agent time and giving clients more personalised attention.

In the battle to win back clients from online travel sites, internet technology could paradoxically be the biggest ally of traditional travel agents.