Interview: HRS CEO on the Problem With Hotels and Airbnb for Business Travel
Skift Take
Travel managers want more of their employees to book hotel rooms through approved channels — and they want those hotels to agree on reasonable rates. There's a good business opportunity for companies that can help them achieve those goals.
We recently launched our weekly Corporate Travel Innovation Report, a newsletter focused on the future of corporate travel, the big fault lines of disruption for the travel managers and buyers, the innovators emerging from the sector, and the changing business traveler habits that are upending how corporate travel is packaged, bought and sold.
As part of our increased attention to corporate travel, we're sitting down with a handful of industry leaders for our new Corporate Travel CEO Listening Series to discover what the people at the top are concerned with now and where they are looking for inspiration.
Hotels are often a major problem area for travel managers. According to a recent survey from hotel service provider HRS and the Association of Corporate Travel Executives, those who purchase travel for their companies say rising hotel prices, the time required to negotiate rates, slow response time from hotels, and a lack of standard bidding processes are major barriers to locking in target room rates.
HRS CEO Tobias Ragge sees opportunity there. The family-owned business that he runs has been expanding globally, opening an Americas office in New York a year ago. Headquartered in Germany, HRS grew its workforce by 15 percent last year and now has 26 offices around the world.
As a "hotel solutions provider," the company's services include working with corporate travel clients to access inventory at both chains and independent properties; process payments through a virtual credit card system and analyze spending data.
"We’re selling in an accommodation space which is quite complex, especially when you go outside the US. because of the fragmentation of the market, the complex value proposition," he said. "We sell a lot of service around it, from sourcing through the transaction through the payment, expense processes."
Skift spoke to Ragge about consolidation in the hotel world, the push for direct bookings, Airbnb as an option for business travelers, and the changing expectations of millennials.
Skift: Starwood and Marriott, obviously that’s been huge news. What do you see as the impact of that consolidation on travel managers and how they’re doing their job?
Ragge: Well number one, market structure. One-fourth is chains and you see in that one quarter more consolidation, Marriott-Starwood, Accor-Fairmont, Plateno-Jin Jiang in China. You will see more of it. So the one quarter will [even] more consolidate.
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