Global hotel solutions provider, Hotel Reservation Service (HRS), recently set up its first office in India, the world’s 10th largest business travel market. Santosh Kumar, director of Corporate Solutions for HRS in India talks about the focus on servicing the Indian business community and multinational corporate customers By Sudipta Dev
What are the driving factors for establishing an office in India?
According to the Global Business Travel Association (GBTA), India is currently the 10th largest business travel market in the world. With double digit growth rates expected for business travel spend, India is placed very well in the sector and is likely to be amongst the top five business travel markets in the next 15 years. Corporate spending is also estimated to increase in the country, and this spells valuable opportunities for the sector. Research by East & Partners Asia’s Corporate T&E Index found that more than three quarters of Indian firms envisage a significant rise in their travel and expenditure budgets in 2016.
Beyond travel spends, the GBTA announced last month, the launch of GBTA India as part of its continuing global expansion – a strong indication that the market here has significant demand for education and quality research around business travel.
At present, hotel providers in the country have been relatively slow in jumping on the digital bandwagon, with a small percentage of total hotel inventory made available online – at 20 per cent according to a report by Google Travel Trends. This translates into huge growth potential for HRS as more hotel properties make the shift from offline to online.
What are your unique service offerings for corporate clientele?
Integration of independent hotels : The ongoing consolidation craze has led to multiple mega-hotel groups possessing the ability to bolster their competitive positioning and negotiation power, through size. However, as big as the new mega hotel groups are, there are many private brands and independent properties that fall outside their distribution systems.
In such an environment, HRS stays differentiated by working with corporate travel clients to access inventory from both chain and independent properties – taking the fuller market in account rather than individual hotel chains alone. The 180,000 independent hotels in HRS’ inventory include more than five million rooms across bed & breakfasts, hostels and apartments. In a market like India where hotel content is extremely fragmented, working with an existing base of over 4,000 major hotel chains and independent hotel properties in our inventory becomes a distinct competitive advantage.
Seamlessly integrated multi-channel booking: Beyond providing access to a wide range of hotels to optimise value, HRS’ content is made available across a wide range of channels via its corporate portal, 24/7 phone service center, and on mobile channels with HRS’ own mobile application. This streamlined booking process allows corporate clients to compare hotel rates and offers at ease before booking, minimising time and labor costs – and increasing contribution to the company overall.
How do you plan to leverage existing relationships with corporates for the India market?
HRS has opened 25 offices around the globe, with the latest two in New York and Mumbai. Relationships with corporates in these countries allow HRS to enter the India market with regional know-how and support, enabling us to service both global corporations headquartered in India, and big local companies alike.
By providing corporations with an end-to-end solution that combines online travel search and booking with services such as hotel sourcing, processing payment on-site and automated expense reporting, we aim to position ourselves as a trusted advisor, to corporates. When it comes to accommodation for corporations, we manage the entire process and have built cost-saving potentials – be it optimising commission collection, or by collecting hotel bills, breaking them down and giving corporates all the data required for tax redemption.
Do you have any targets for client acquisition in this market in the next two/ three years?
At HRS, one of our value propositions is providing corporations access to a wide range of hotels to optimise value. With a portfolio of 300,000 hotels globally, including 180,000 independent hotels, HRS has the scale to provide level and depth of content on properties, allowing customers to tap into more choice.
We are looking to go direct with corporate acquisitions, and to form effective strategic partnerships with the top-tier Travel Management Companies (TMCs), Online Booking Tools (OBTs) and Global Distribution Systems (GDSs) in India. By integrating our content into the systems of premium partners, we will be able to aid corporations here, in making better-informed decisions when selecting a hotel.
Any interesting new trend in terms of profile or preference of Indian business traveller?
India is sitting on the cusp of a huge digital revolution, with widespread smartphone usage and government policies in place to support the Digital India initiative. We are seeing this digital transformation extend to the business travel sector; Indian business travellers are expressing a strong preference for digital services, online and mobile booking tools.
This is further supported by research from the 2015 Asian Business Travelers survey which was commissioned by the Singapore Tourism Board (STB), which found that 85 per cent of Indian business travellers prefer digital processes for flight and 64 per cent preferred the same for hotels. Interestingly, the survey also revealed that although Indian business travellers are typically seen as budget conscious, they express the highest willingness to spend on ancillary services such as flight upgrades.
Another trend we’re seeing in India is how the rise of millennials has changed the face of business travel. This is, in large part, a result of the growing number of millennial business travellers – which comes as no surprise given that approximately half of India’s population is made up of individuals below the age of 26. In order to capture a greater share of the corporate travel market, businesses and travel managers alike will have to keep up with, and evolve alongside the preferences of millennials.
Hotels in India are already warming up to the growing number of younger guests who are more likely to combine business and travel, offering luxury services such as entries to night clubs and complementary extended hotel stays.
Your growth expectations from this market?
As mentioned earlier, India is projected to be amongst the top five business travel markets by the onset of the next decade, and we hope to build on that growth momentum and become the leading the hotel solutions provider in the market.
We are taking small, but significant steps to achieve this position. To begin with, we signed an exclusive partnership with The Oberoi Group alongside the launch of our office in Mumbai. One of India’s most prestigious hospitality groups, the Oberoi brand is synonymous with high-quality service, luxury and efficiency. This partnership is coherent with our business strategy of developing a quality network of hotels for our clients, and we look forward to similar partnerships to help deliver access to new markets and customers.
Any other significant factor you would like to highlight on.
Just like in any other country, the business travel requirements tend to evolve with the country’s economic shifts – it is never set in stone. When we look at corporate bookings, we see how varied company needs can be, from requests for luxury chain hotels to low-budget accommodation options. There are also companies in India that manage and utilise company-owned guesthouse and apartments, which form part of the independent properties that HRS manages.
Another broader challenge is that of payments. Apart from managing varied modes of payment ranging from company-centralised cards, to employee business cards, personal cards and Bill To Company arrangements, we need to factor in the option of local payment methods such as net-banking and e-wallets. To make this possible, HRS has to stay up-to-date with the varying local regulations tied to each of these payment methods.