Can you imagine a world in which all travel service providers are connected together? A world that would enable you to not only offer your employees a better travel experience, but also to receive the important data needed to create a more transparent travel pro-gram?

If this idea is ever going to go from fantasy to reality, a network must be created in the travel segment whe-re all digital borders dovetail with one another — a network with both horizontal and vertical connections thatis capable of generating benefits on every level, across every travel category.

Dirk Gerdom, long-serving president of the German Business Travel Association, VDR agrees that it‘s time for this to happen: “Travel management’s success is becoming increasingly dependent on seamless pro-cesses, data transparency, demand management and predictive analytics – as well as cross-departmental optimization measures. The relevance of interfaces is constantly growing, whether they are internal ones to other departments, or interfaces to external partners.”

For this reason, HRS Group chose “Connect” as the theme of the 2019 Corporate Lodging Forum. The key question being asked at the conference was: What are the inherent challenges and expectations in the envi-

sioned network of the business travel world? Internal and external, political and economic, technological and human alike.

This whitepaper provides a summary of the key con-tent that emerged from this year‘s CLF in Berlin. Have any questions, or looking to have a more in-depth discussion? Then please contact me or one of my colleagues. Tobias Ragge CEO HRS

CONNECT!

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Transformation is all around: The travel sector is not the only area in a state of upheaval. As the keynote speaker at this year’s Corporate Lodging Forum, for-mer German Vice-Chancellor and Foreign Minister Sigmar Gabriel urged attendees not to be apathetic in regard to the current geopolitical and economic shifts underway around the globe.

Our response cannot be “Keep it up,” Not in an era of nationalist movements on the one hand and global economic disruption on the other. Not in an era of a power struggle between the People’s Republic of Chi-na and the United States of America; in an era when the EU is threatening to fall apart, when millions of people are migrating and digitalization is growing at an exponential rate. So what can be done in light of these geopolitical challenges?

GEOPOLITICAL CHALLENGES

► “That will be pretty challenging for us”

To answer this question, HRS Group invited Sigmar Gabriel, who admitted in his opening remarks: “That will be pretty challenging for us.”

Challenging, because the old explanations no longer apply in this new world characterized by speed and asynchronicity. “Our grandparents don’t know what the world is coming to,” Gabriel said. And to ensure that the same thing does not happen to us, we should prepare to cope with “several major transformation processes in our lives” at once.

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► “Since Obama, we have been experiencing a disconnect”

Gabriel said in this new age of digitalization, the product is no longer the focus of attention, but rather the platform — and that changes the value chain. He said he sees the shift happening in his own family with his daughter, who isn‘t interested in the one thing he always wanted as a teenager: a car. “No, my daughter wants a different type of mobility at the weekend than from Monday to Friday, and a different one in summer than in winter.”

But what would happen, asked Gabriel, “if our industrial model turned into a commodity?” After all, every social security system is connected to wages: “So what if no one had a job any more? That will put our system under

immense pressure.”

► “Digitalization is a mind-bog-gling challenge for Europe as an industrialized country”

The developments on the international stage are also creating demand for adjustments on the part of Germans and Europeans: “Since Obama, we have been experiencing a disconnect,” the former Foreign Minister said, outlining the gradual withdrawal of the world power out of the cooperation-based post-war order: “There is no longer a G8 or G25, just G2 and ot-her attempts at free trade agreements.” United States President Donald Trump is currently demonstrating where this development can lead, Gabriel said: Instead of pursuing cooperation and continuity, Trump is pur-suing duels and sees the world as a “bilateral arena”, he said.

And what about Europe? Gabriel places the Europe of the EU helpless, as it were, on the fringe of this global trade arena, particularly in the duel between the Uni-ted States and China. But at another level, too, the EU member states are currently in the process of gam-bling away their sustainability, he said. Now that the United States has withdrawn as the great guarantor of security, if the United Kingdom leaves the European Union, too, while Germany refuses to enter into joint collaboration with France — the last remaining nuclear power — then the EU will be merely a toothless tiger. Harmless and without any course of action. The for-mer Vice-Chancellor warned: “The EU, NATO… all that is now in doubt.”

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CHALLENGES IN TRAVEL MANAGEMENT

HRS Group has developed an end-to-end solution for the managed corporate travel segment that takes the needs of companies into account just as much as tho-se of their travelers. But, according to HRS CEO Tobias Ragge, that alone will no longer be enough in an age of new business models, industry players and needs. And for this reason, Ragge is calling for a partnership bet-ween corporates, online travel agencies and the hotel industry.

Do you know your “weaker self”? The part of you that is hell-bent on protecting your comfort zone? This is precisely what Ragge has set his sights on. For decades, he says, our weaker selves have led us to believe that we are operating in an ideal travel world. With travelers still booking outside of designated corporate channels 60 percent of the time, and the demands and desires for personalization growing, the industry can‘t continue to tell itself that everything is OK. Something must be wrong with the old-established world of travel management company and global distribution systems alliances.

GDS as an ideal world and owner of all content just does not exist anymore,” he said. “That is a world full of legacies that is based on a technology from 50 years ago.”

He pointed out that in the world of TMCs and GDSs, penalty charges are still imposed for bookings made outside the GDS. “That is our version of tariffs,” Ragge said, alluding to the destructive tariff war between Trump and Xi. His conclusion: “Our sector has not kept up with the supply that today’s users have in their daily lives.” Add to the pile the increasingly strong diversification and fragmentation of travel supply by new players like Airbnb and Uber.

► “Transformation is the new normal”

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► “High time to leave the old world behind us.”

For this reason, said Ragge, the inevitable question is: “Can ONE player still do everything? Or do we need experts who work together instead?”

“Our sector is in the eye of the storm, and we will ex-perience major upheavals,” Ragge warned. It‘s time to push ourselves out of our comfort zone as an industry

But what forces exist to drive the envisioned transfor-mation forward? “Suppliers like Lufthansa have begun to break free of the commodity trap and are using ‘direct connect’ to offer more value adds for trave-lers,” Ragge said. Corporates like Siemens and VW are the ones who are immediately taking ownership of this value add, he said. They are becoming “the clear pace-setters for the entire ecosystem.”

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Other pace-setters include the so-called “new entrants”, mea-ning players like Uber and Airbnb, Ragge said. However, he sees the travelers as the greatest agents of change, particular-ly Millennials, who will account for 52 percent of all expendi-ture in corporate travel from 2020. “They want simple, digital processes and no restrictions.” And only those who can offer

them precisely this as a means for simplicity, integration and automation, will no longer have to worry about leakage, he said. “Today, travelers still have to accept what‘s stipulated for them,” said Ragge, “but that won’t work much longer.” In order to successfully leave the old world behind, “the customer has to be at the center of everything... We need a reset in our mindset.”

Ragge said this can be achieved through a holistic approach in which horizontal processes and vertical expertise are connected with one another via interfaces. This guarantees not only better travel experiences, he said, but also greater compliance and leaner processes. “In two to three years,“ he said, “we will be talking about costs gain, and no longer about traveler centricity.”

► “Be travel CEOs and take ownership of the strategic agenda.” So what is the way forward? For Ragge, it‘s obvious: Get out of your comfort zone and move into the brave new world of transformations. “Transformation is the new normal,” he said. “Be travel CEOs. Take ownership of the strategic agenda. Control the traveler experien-ce and manage the networked ecosystem.”

► “The customer must be at the center of everything.”

Ragge closed by providing the blueprint for “vertical accommodation” expertise as modeled by the HRS end-to-end system, and promised: “We make things simple because we use data to optimize the entire process and only measure ourselves by customer suc-cess.” Against this backdrop, he advocates a trilateral win-win-win partnership between corporates, OTAs and the hotel industry.

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THE CHALLENGE OF THE “TRILATERAL PARTNERSHIP”

The trend analysis institute Zukunftsinstitut believes connectivity is “the most powerful megatrend of our time.” Ragge believes that networking, enabled by API interfaces, is the basic prerequisite for successful tra-vel management. But: Who should be the one in char-ge? High-level decision makers from companies and service providers discussed this at the 2019 Corporate Lodging Forum.

The objective has been formulated clearly: In order to simplify processes and access to services for both companies and their travelers, a link-up is required between horizontal processes and vertical expertise. To put this more simply: various service providers

must be interconnected using API technology. “It’s ab-out seamless experiences for travelers and real-time data reporting in a single tool,” HRS Chief Marketing Officer Alexandra Barth explained in her introduction.

In the case of Steffi Kirchberger, CEO at JARO Services GmbH, she was preaching to the converted: To cope with the completely different needs of today’s busi-ness travelers, seamless travel and integrated proces-ses are required, said Kirchberger, head of a company that specializes in digitalization and achieving cor-porate sustainability. At the same time, she warned against relinquishing control of the process. “We can’t leave everything to the suppliers. Write a guideline and orchestrate it!”

► CONNECT!

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James Küng basically saw that the same way. “We want ONE interface! We want a one-stop shop!” said the Head of Global Travel Management at Siemens AG. As a major customer, he nevertheless feels no desi-re to have to move his service providers to do their jobs first. “We customers have to push you suppliers, because you are all at a different stage,” he said in-dignantly. “But we customers should not have to push you suppliers to make you link up.” That’s your job!

However, the representative of SAP Concur, General Manager EMEA Pierre-Emmanuel Tetaz, appeared to accept that as obvious: “We have 200 partners, and it is up to us to make sure we stay ahead,” Tetaz emphasized. And not just that: His target is 500 partners and more, he said.

Christoph Carnier, Global Travel Buyer at Merck Group, was moved to ask the question of whether companies like his will then need an algorithm officer in the future. However, he immediately withdrew the question and emphasized: “I too want to take the final decision and decide what we REALLY need.” Above and beyond this, he does not want to let control of the process be taken out of his hands. Carnier: “Process efficiency is very important to us.”

► “We customers should not have to push you suppliers to make you link up”

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Arlene Coyle, Senior Vice President Global Commer-cials at Amadeus, immediately countered: “Technology is the least of our worries,” she emphasized. It isn’t about access at all, she said. “But is it about content? Is it about data? Is it about analytics?” No, Coyle belie-

ves none of those are the issue; her company could manage all of that, she said. But, she said, turning to the travel management gathering: “We cannot solve all the problems. You corporates really have to commit to what is particularly important”

“Admittedly, everyone has a different set-up,” Car-nier subsequently conceded. However, the discussion cannot be centered around efficiency alone, but also about the needs of travelers and their companies, he said.

At this point, colleague Küng rushed to support the designated VDR president. He did not see why 500 partners should be linked in, said the Siemens mana-ger. He named Siemens partner HRS as an example: “If I only have one partner who can tell me where my people will sleep, that will make my life easier.”

Because simplification was the order of the day, Ama-deus manager Coyle followed Küng’s example to make a retort: It would greatly simplify her life if travel management were to incorporate all decision makers when creating the future link: CFO, IT, Accounting, etc.

That is exactly in the spirit of what the hosts of the Corporate Lodging Forum had in mind.

► “You corporates really have to commit!”

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According to Matthias Horx, founder of the renowned Zukunftsinstitut, the principle of networking will do-minate “social change and open up a new chapter in social evolution. Digital communication technologies will fundamentally transform our lives, re-program socio-cultural codes and cause new lifestyles and be-havior patterns to emerge. If they are to move with this fundamental upheaval successfully, companies and individuals will need new network competencies and a holistic and systemic understanding of the digi-tal transformation.”

The podium discussion with the decision makers on the topic of linkage itself demonstrated impressive-ly that this is easier said than done. Because, as the future trend researcher pointed out during the Corpo-rate Lodging Forum, digitalization – especially in the travel sector – is driven by human trust. “The more digitalization we have, the more our need grows to know who our counterpart is.”

► Where to now?

To illustrate this, Horx stated a forecast made by his institute at the turn of the millennium. Back then, people were convinced that video conferences would reduce travel volume by 50 percent by 2020. A falla-cy, as it soon turned out. The motivation behind the travel figures, which are, on the contrary, still rising sharply? “Human trust.”

Against this backdrop, Matthias Horx defined mobi-lity in the digital age as a “social skill”, but he noted that mobility means a lot more than merely physical movement.

On that note: Let us be mobile!

ì www.corporate-travel-forum.com

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