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eTravel Europe 2016 - Corporate Travel: more than the sum of its parts - Philip Kramer - HRS

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The world of corporate travel is uniquely complex, with numerous players, interdependent relationships, various content and channel options – and countless ways in which a business traveler can get from A to B and book the steps in between. From a corporate perspective it is all about finding the right balance: Cost reduction and traveler satisfaction, freedom of choice and negotiated deals. This necessitates a holistic approach, which considers the processes within business travel end-to-end, from sourcing, over the booking and payment technology to ongoing optimization through data.

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eTravel Europe 2016 - Corporate Travel: more than the sum of its parts - Philip Kramer - HRS

  1. 1. The evolution of business travel – an industry perspective eTravel Europe Amsterdam, October 04, 2016 Philip Kramer, Head of Growth Markets
  2. 2. 2Confidential – not to be distributed © A brand of HRS Group Growth in business travel will driven by new global growth champions like India and China Top 10 Markets in bn USD Business Travel Spend Source: GBTA 2015, China Industry News 2014 • China will surpass the US in 2017 as biggest Business Travel market Growth 2014 - 2019 26 31 32 32 36 44 58 62 Germany Japan UK S. Korea Brazil Italy France 262 US China 288 India +61% +51% World in bn USD 2014 1,600 2019 +37% 1,170
  3. 3. 3Confidential – not to be distributed © A brand of HRS Group Business travel management takes evolutionary steps and will reach Managed Travel 4.0 soon Procurement => Cost saving Duty of Care => Risk Management Managed Travel 4.0 => Consumerization • Sourcing • People locator • Personal (Recommendation) • Mobile ubiquidity • Hassle-free travel (Payment & Expense Management) • Bleisure Travel managers Traveller Yesterday Tomorrow 2.0 3.0 4.0 Shift of power Traditional Travel Management • Introduction of corporate travel mgmt. • Centralized responsibility and guidelines • Selection of professional travel mgmt. service providers 1.0
  4. 4. 4Confidential – not to be distributed © A brand of HRS Group Today, markets are in different stages of the corporate travel evolution Procurement => Cost saving Duty of Care => Risk Management Managed Travel 4.0 => Consumerization 2.0 3.0 4.0 Traditional Travel Management 1.0 Spain Brazil Italy Australia Switzerland US Germany Japan UK France India Russia Source: Euromonitor 2015, Worldbank, Country Expert Interviews Travel Evolution Horizon Basic Advanced
  5. 5. 5Confidential – not to be distributed © A brand of HRS GroupConfidential – not to be distributed Travel industry – market share 2015, Retail Value in € Lodging takes a considerate stake in the travel business – and is shifting to online and mobile Source: Euromonitor 2015 Note: Travel industry includes transport and lodging (online and offline) 35% Lodging 65% Rest travel industry Trends • By 2017 every 2nd hotel booking will be made on mobile devices 20152014 Mobile hotel sales + 40%
  6. 6. 6Confidential – not to be distributed © A brand of HRS Group Corporations face 4 major challenges regarding hotel program management Source: HRS Global Survey, 2014 (n = 250) Content supply Costs Process compliance Fragmentation challenge Sourcing a global program Leakage due to channel fragmentation Traveler satisfaction Consumerization challenge
  7. 7. 7Confidential – not to be distributed © A brand of HRS Group Content supply: Fragmentation of the industry makes it difficult to manage a large portfolio Share of chain and independent hotels around the world Percentage Source: Euromonitor 2014, Smith Travel Research 2012 48 Chain hotelsIndependent hotels 91 Asia Pacific 100% Middle/East / Africa 80 20 South America 9 North America 48 52 Europe 86 14 China 70 30 2377
  8. 8. 8Confidential – not to be distributed © A brand of HRS Group Europe 42.762 27% 156.000 101.000 North America 35.245 50% 70.000 48.000 5.607 5% 112.000 67.000 China + Brazil 2.500 12% 21.600 14.600 Asia Pacific 7% 13.464 180.000 107.000 Comparison of hotel portfolio 2015, HRS vs. Global Hotel Supply HRS Total hotels x% GDS Content Coverage GDS Source: September 2015, Euromonitor, Reuters Therefore the GDS historically only covered a small fraction of the global hotel supply
  9. 9. 9Confidential – not to be distributed © A brand of HRS Group Outsourcing hotel procurement can save 9% direct costs – but only 14% of firms do it Source: HRS Global Survey 2014 and 2015 / GBTA / American Express On average, savings add up to 9% This represents a global annual savings potential of = 29 billion US$ Huge savings potential… … but few firms leverage it 14% 71% 14% Outsource negotiations to a service provider Negotiate rates by themselves Use a tool to support with negotiations
  10. 10. 10Confidential – not to be distributed © A brand of HRS Group There are several challenges connected with sourcing a global hotel program Source: HRS Global Survey, 2015 Most challenges are connected to rising prices or lack of market transparency 26% 32% 37% 39% 39% 46% 48% Lack of local market know-how Lack of benchmark information Non-transparent booking and billing data Fragmented hotel market High expenditure of time and resources Need to consider various/different interests Increasing hotel prices Rising Costs Lack of market transparency
  11. 11. 11Confidential – not to be distributed © A brand of HRS Group Big data put into action – For HRS customers, big data saves millions of EUR in hotel sourcing 450,000 Rates 10 Mio. Room- nights Room nights $ # ### Rate $$$ Renegotiating rates Bundling room nights Replacing hotels BIG DATA BIG INSIGHTS BIG ACTIONS 40,000 corporates Booking patterns
  12. 12. 12Confidential – not to be distributed © A brand of HRS Group Leakage can be fought by mandating booking channels & an effort by all players in the value chain HRS‘ multi-channel approach 100.000 150.000 Traveler Chain Independent hotel 100.000 200.000 TMCGDS OBT HRS for Corporates
  13. 13. 13Confidential – not to be distributed © A brand of HRS Group Traveler satisfaction will require full content with customized recommendations irrespective of channel HRS Recommendation Engine Travel policy Corporate Location Hotel Program Reviews Preferences Customer A Customer B
  14. 14. 14Confidential – not to be distributed © A brand of HRS Group Customized mobile apps for large corporations are one answer to the consumerization trend
  15. 15. Thank you! philip.Kramer@hrs.com

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