HRS expands its focus beyond hotel solutions

HRS CEO Tobias Rage discussed:

• Payment data value
• The future of hotel sustainability statements
• Balancing safety and security with savings and sustainability in hotel program decision-making

This month’s announcement that HRS has agreed to acquire expense management platform Paypense was another sign that the hotel solutions provider is expanding traditional value beyond connecting the dots for complex hotel programs. CEO Tobias Rage sat down with BTN Editorial Director Elizabeth West at the Global Business Travel Association convention in San Diego to discuss the evolution and impact of the current managed travel industry. Some of these trends have played directly into the company’s hotel program expertise, while others are pushing the company in new directions. Edited quotes follow.

BTN: You told me during the Business Travel Show Europe in June that HRS is realizing that the entry point for client companies is no longer the travel manager. Tell me more about this.

Tobias Rage: The question is, “What do you want to achieve, and who is the right stakeholder for this achievement?” That’s what it says. We tend to think of travel as a category from an operational perspective, which in the past was always handled through the travel manager. But travel has changed from a transaction-driven industry to a strategic conversation about booking travel and supplier relationships, how to digitize processes and broader frameworks beyond savings.

Pay is often a catalyst for digitization, but this extends to finance, accounting and treasury. So that’s why you can’t go to one party or another. When you look at the whole process map – and when we put our value proposition as buy-to-let – you look at the stakeholders in this process and often we notice that we have to bring them together for the client company because they are silenced internally. Does it include travel? yes. But it doesn’t just involve travel. If we really want to take travel as a solution to a completely different level, it will require different conversations.

BTN: Why do you consider payment as a catalyst for digitization?

Anger: Because it is the best source of information and can drive program adoption. of [managed travel] An industry is built around reservations. First through an offline agent, then it was replaced by an online booking tool, and then chatbots could help you as an evolution, but it was all the same idea. The biggest problem is that only 50 percent of any corporation’s volume goes through that booking channel. And it’s even worse if you go outside of major markets like the US and Europe. Payment can cover much more territory; You can cover up to 70% of the total amount being processed in the payment section. And if you do it right, you can have an invoicing machine that provides level 3 information [on this].

In the past, where you have booking tool A and booking tool B in different markets or working in different agencies in different markets, you’re getting data in different formats and try to match it, duplicates. You end up with 35 percent of what you can use.

BTN: What about the adoption or compliance side of the program?

Anger: Earlier when we tried to link cost management as a product to travel as a category, we solved it with travel policies. People would update their policies and say, “Okay, now we’re not spending €100 a night, we’re spending €95,” or whatever, there’s no business class, now it’s coach class. And people spend an endless amount of time defining these policies. … Then at some point, someone [configures it] They send notes about booking in and out of booking tools, which no one reads or bothers, if they are honest.

Payment is beyond the wallet. Basically, you can plan expense management rules and any expense you incur will be against these rules – and now it’s not just travel expenses like air and hotel. It’s everything you do when you travel – restaurants, taxis. It can engine rules in real time [trigger] For example, the allowance for breakfast. And you don’t need to collect anything [receipts]; Everything goes directly to the cost tool. So it takes a lot of hassles that can drive adoption and create best-in-class data.

BTN: Do you see travel managers becoming more involved in payments and understanding the role of cost management in strategic travel management?

Anger: It is clear that we are heading for a recession and that inflation will remain higher than we would like. I think the CEO cares about cost management – ​​and achieving compliant, manageable costs in real time and managing cash flow. The C-suite cares more about this than what’s happening with a travel booking tool. They’ve got forward-thinking travel managers, and they see that they need to drive another agenda. But now comes the challenge: How do we bring this together through finance, accounting and networking?

BTN: Another big concern for travel programs is sustainability. HRS is addressing this with its Green Stay initiative, which was widely praised when it was released but criticized for being available only to HRS customers. Have you ever opened that program?

Anger: With climate warming, you see all these dangers everywhere. And I think that’s high on the corporate agenda right now. and the Securities and Exchange Commission [has proposed] Who wants all this [reporting] From 2023. Therefore, hotel companies should provide clear information. In the corporate landscape, early travelers say, “If a hotel partner refuses to provide transparency, they’re probably not going to be in our program anymore.”

Part of our Green Stay Initiative is supporting the supply side to understand that this is now mainstream and bring all these data points together and help them distribute that information to their own sales channels. So we’re making it free for everyone to broadcast on their channels, and we’re also making it available to others. The industry is trying hard, but [hotel companies] Sometimes they face conflicts of interest when the property pays them a lot of money to be part of the franchise. So even if they are headed in the right direction, they may not be as clear as the corporate buyer wants. And we can help provide that.

Looking ahead, I’d say it’s a three-to-five-year issue that you’ll have to demonstrate with smart contracts every time: Have you improved this? can you confirm Because there is a lot of greenwashing going on today.

BTN: Traveler safety and security is another megatrend that will definitely affect travel managers. HRS announced a merger with Geosur this month. How are you enabling that and delivering value to the buyer?

Anger: We’re always looking at all kinds of data sets as layers of improvement to make better decisions, whether it’s for the shopper or the traveler. Geosure offers another important purchase criterion. We want to demonstrate to the buying process, if you are looking for hotel partners in Lagos, Nigeria, for example, that there are safer neighborhoods than others and you need to understand the risks when making hotel partner decisions. Maybe the hotel location is farther from the office, but you’re willing to pay that extra ground transportation cost because it’s safer.

What we are building on the procurement side is essentially a decision machine. We call it a developer where the decision maker can play around with the styles of things that are important to you and see all the rewards in terms of savings, satisfaction, safety, security and sustainability. Security is obviously part of the algorithm to drive that.

BTN: Let’s hit on remote work. I know you have introduced the concept of ‘long duration’ in your traditional tools. How are you thinking about the impact of a fragmented workforce—and does HRS have a plan to address the big picture?

Anger: There is no organization that does not work. [dealing with] Remote work, in the policies they perceive, “How do we organize this? What days do people have to come in? Who decides?” It starts here, but what are the consequences? Companies are getting rid of real estate, but what other opportunities are there for people who don’t want to work at home for five days, and what is relevant to this question? I think this is where travel and HR really start to mix.

But in the meantime, this is a great opportunity for hotels. Because what is a hotel? Square feet of infrastructure that provides space to sleep, eat, work and socialize. It’s all there. I think you’ll see, and this is what we’re all working on. [built] in one application. You have your classic meeting place. You have full workspaces. You can reserve a table on time. Let’s build a utility bill model and integrate it with a bill application. It is very reasonable [hotel bookings, remote work spaces, small meetings] They all come from the same source.

BTN: HRS is tapping into the larger travel industry to address housing needs during transportation disruptions, of which there are currently many. What needs have you identified and how will you fill them?

Anger: We’ve built these pay-as-you-go platforms for the corporate community, but eventually you’ll see that there are other communities that can use them. Through the pandemic, we’ve done a lot on the crisis management side of things because that’s the only business you can go on. So we thought about how industries normally deal with crises – and that’s when we came to the transportation industry, saying, “Well, there’s a lot of disruption in scheduling air, rail, and so on.” We have found that the segment is being served with vouchers etc. which is a very manual process in call centers that seem to be very offline. At the end of the day, they need a fully digitized procurement platform with a payment application. You hand this application to the crew and passengers and say, “Here, everything is paid.” No petty cash, no complicated process and, for customers, no queues with screaming children for vouchers. Everyone has access to their mobile devices.

At that point, the airline will say, “Hey, I’m sorry, but at least we’ve created a good experience with this here.” And we’re getting it. [Net Promoter] Scores go through the roof, and there’s even some praise from customers.

BTN: Who are your customers in this?

Anger: We started by train in Germany then went to Lufthansa and Norway. There is great demand. To be honest, if it wasn’t for the pandemic, we probably wouldn’t be watching it. But when we look at what HRS is and what we’re trying to do… we build platforms that buy to play. We are faced with fundamentally affecting infrastructure [around] Accommodation. Our job is to build and implement technology that digitizes these value chains end-to-end.

BTN: HRs take a step forward to see how they can apply their core skills to other problems. It amazes me that travel managers face off when asked to do the same.

Anger: All these megatrends are connected to travel. Travel managers need to be strategic and be part of these conversations and decide if they want to drive change for their organizations and raise their profile. They don’t do it on their own; They need to find the right partners. If they don’t move up, they are waiting for someone else to do what they need to do and stay in their role.