WASHINGTON -- Amadeus launched a new pricing plan for North
American agents that eliminates productivity pricing for firms that
forego a signing bonus in their GDS contract.
In addition, agents will be paid monthly under the plan.
Agencies that sign contracts under the ProfitChoice program will
be paid per booked segment. The total automatically will be
reconciled monthly by Amadeus, which will retain the amount needed
to cover the agency's monthly GDS expenses.
For agencies that decided to forego a signing bonus, the rest
will be returned to the agency each month as pure profit.
Kay Urban, Amadeus, North America executive vice president and
chief operating officer, touted the program this way:
"The more agencies book, the more they earn. The less their
expenses, the more they earn."
Amadeus tested the waters for a couple of months by showing the
program to some agencies before the official unveiling and already
has signed ProfitChoice contracts with a "handful" of agencies.
Amadeus said one leisure firm, which it did not name, produces
55,000 segments annually. Under productivity pricing, Amadeus said,
it would be paid $30,600 a year, or $2,550 a month.
Under ProfitChoice, Amadeus said, it will make $76,500 a year,
or $6,375 a month. ProfitChoice offers an agency three options.
Under the first, which provides the highest per-segment
payments, the agency gets no money up front and there is no segment
goal.
That's the choice taken by the agency Amadeus used in its
example.
Under the second, which lowers an agency's per-segment payments
somewhat, Amadeus pays a cash advance that the agency repays over
time. It also has no segment goal.
Under the third, the agency receives a signing bonus, but it has
a segment goal and runs the risk of penalties. The per-segment
payments are the lowest of the three options.
Because accounts are reconciled monthly -- rather than by
quarter or year -- the agency must meet its segment goal monthly.
That means it doesn't have the rest of the quarter or year to make
up for a soft month.
On the other hand, the agency doesn't run the risk of a penalty
for an entire quarter or year when it can't regain the ground it
lost in bad months.
ProfitChoice contracts, which range from three- to five-year
terms, are being offered to new customers and renewals, but Amadeus
said it is willing to talk to existing customers in mid-term.
Amadeus will continue to offers its EasyAccess product, which is
targeted to smaller agencies booking fewer than 7,500 segments a
year. EasyAccess offers free entry to the basic Amadeus system plus
Amadeus Cruise and Consolidator Shopper, with no booking minimums.
Sabre's Simplicity Plan and Galileo Select and Connect offer a
similar plan for small agencies.
Travel attorney and Travel Weekly.com columnist Mark Pestronk
said ProfitChoice sounds evolutionary rather than revolutionary but
called it a "superb" offer that should be welcomed by agencies. He
noted it also will free them to do Web bookings without creating
GDS segment shortfalls and penalties.
"All four [GDS] vendors are getting easier when it comes to
quotas and more generous when it comes to bonuses," Pestronk said.
The reason for that may expand beyond smart business to smart
politics, he added, as the Transportation Department is considering
GDS rule changes that would reduce or eliminate productivity
pricing.
Amadeus' Urban said the GDS began developing Profit-Choice and
its other new programs well before the DOT's proposed
rulemaking.
Amadeus unveiled Profit-Choice concurrently with a new program
it said will help agencies lower their expenses.
Under the program, called Amadeus Workplace Solutions, Amadeus
will consult with, visit and observe an agency to tailor each offer
specifically for that agency, in terms of what Amadeus services and
equipment it needs.
Amadeus touted it as a better option than giving an agency a
choice of a few pre-packaged options.
For example, Central Travel has nine locations in northwest
Ohio, but president and CEO Jani Miller told Travel Weekly.com she
opted to get a ticket printer for only her corporate location
because Central books more international travel there.
Central also opted to use its existing laser printers, not the
Amadeus invoice printers, and to do the Internet connection itself
because it could get a better deal.
"We could determine what we needed and didn't need," said
Miller, whose agency does more than $30 million in business a year,
employs 65 people and purchased 60 Amadeus workstations.
Pestronk said the concept is good but not unique. Sabre, for
example, provides agencies three pages listing equipment they can
choose to lease, he said.
Amadeus also unveiled an upgrade of its graphical, browser-based
front-office booking system.
Vista 2.0's features include one designed to make it easy for
agents to switch between the graphical user interface and the
code-loaded command screens. It also includes a "Quick PNR"
mode.