Hotel beds It said on Wednesday it had appointed new CEO Nicholas Huss to lead the travel technology business.
Huss took the reins as Joan Wiley stepped down from his role as executive chairman. Wiley has led the Spanish company Palma since its creation in 2001, and has grown into a market leader among wholesalers of hotel room listings.
Hotel bed control investors Synven, Canada Pension Plan Investment Board and IQT, have hired an outsider as CEO of the company. Hussein, the former CEO of Ingenico and Visa Europe, is now facing the task of accelerating the company’s digitization.
There is no CEO before HotelBeds. It has an Executive Chairperson and Managing Directors. Huss’s team includes Chief Operating Officer Carlos Munoz and Chief Financial Officer Andres Garcia-Tenorio.
“Coming from a digital background, I really believe that this is an industry that makes good use of the benefits of artificial intelligence, machine learning and automation,” Huss said. “If we can become more conflict-free – and add value by providing more data granularity to our partners and therefore their end customers – we will recover even faster.”
The pandemic illuminates the story of the company’s year-on-year growth.
In December, HotelBeds received an injection of $ 210 million (5,175 million) in cash through current supporters, giving it more time to revolve around its credit metrics before future debt refinancing. The move is their second investment since supporters set up a $ 480 million ($ 400 million) term loan facility in April 2020 to help manage the company through the epidemic.
For the six months ended September 30, 2020, HotelBeds’ total transaction value was just $ 40,540 million (1,451 million). This is part of the $ 3.4 billion reported during the pre-epidemic period. The company suffered net losses and significant operating cash burns. Rating agency S&P has a “CCC +” rating on hotel beds, I.e. the company believes that “business, financial and economic conditions are favorable to meet its financial commitments”.
Prior to the crisis, 80 percent of hotel bed volume was based on international travel, including border travel in Europe, and 20 percent domestically. So the disruption to international travel hurt the company. Hotelbeds are responding by adding about 10,000 assets in the markets, much to meet the sudden domestic demand.
“We’re great domestically,” Wiley said. “We recaptured domestic 2019 volumes very quickly in China, and last time in Mexico and Dubai. Most countries in Europe already have the same level of domestic business as we used to in 2019, but we already have a lot of markets, we are doing better than that.”
But hotel beds need to recoup long-distance travel demand to get to Breakven. About 40 percent of the pre-crisis volume was driven by intercontinental travel. Yet 2019 levels for the continent may not recover until 2023.
Hotel Beds executives expect to return to operating profitability by 2022. With so many travelers booking even at the last minute, the historic business of hotel beds is largely in making advance reservations – it adds a headwind.
Table of Contents
- 1 Learning from digitization in payments
- 2 Learning from mass dissolution
- 3 Market opportunity
- 4 Looking back and Joan Wiley’s greatest legacy is the beginning of e-commerce with the strategic insight to consolidate and make the bedbank sector more efficient. He has a digital nature and strategic understanding from the early days. Wiley started in the field in 1989 when he joined the Barcelona Travel Group. After purchasing the unit through First Choice Holidays, he rose to become a strategic leader. In 2007, First Choice merged with TUI AG’s tourism division. In 2016, hotel beds carved out $ 1.165 billion from the TUI Group and increased in size from acquisitions. Wiley remains non-executive director. “I’m going back out of my daily business,” Wiley said. Corporate governance pundits argue that it would not be appropriate for former executives to step on board within three years of departure, as they could stand in the way of change. But Wiley remains an important shareholder in Hotelbeds, so bringing his extensive knowledge as well as having a board role is an asset. Hotelbeds new CEO looks ahead
Learning from digitization in payments
Huss argued in an interview that the payments sector has followed the path of digitization, which also requires hotel wholesale distribution to follow.
“Technological trends and fintech players have created the need and willingness of consumers to control their own destiny when it comes to payment,” Huss said. “The sector is pursuing conflict-free and almost non-contact processes.”
“Demand from tourists is evolving very quickly,” Huss said. “Appetite is growing to build tours and experiences differently.”
Can Hotelbeds fund its ongoing digital transformation on an ongoing basis in recovery?
“Yes,” Huss and Wiley said.
At the end of March, the group had a cash balance of approximately $ 450 million ($ 6,376 million).
Learning from mass dissolution
Last March and April, when many people around the world bore home-based restrictions, the massive cancellation of hotel bookings created a backlog of customer service issues for hotel beds and many other companies. Some critics say the problem with hotel beds is that it has too many manual processes.
But officials at the company disagreed.
“A lot of the problems are because most of the hotel employees have disappeared due to furloughs and disappearances, so our customer service representatives have no one to talk to to fix the problems,” Wiley said. “We accepted the cancellations and we refunded our customers. We did not keep the funds as many other travel companies did. So even though it was a huge crisis for six weeks, we managed it very well. The hotel companies said we were not their big problem.”
Although Hussein and Wiley could improve the process and make it more automated, additional digitization would require the cooperation of its supply and demand partners to be fully operational.
“To go back to my analogy with payments, the payment ecosystem collectively has reached a point where almost everything is automated,” Huss said, stressing that industry cooperation is important.
Hotelbeds estimates that bedbanks account for about 10 percent of all travel (non-pandemic) sales each year.
“We do market analysis every year, and the Bedbank market has grown at a pace similar to the overall accommodation market,” Wiley said. “Not fast, but not slow.”
Other players focused on the market.
In February, Peter Kern, Vice Chairman and CEO of Expedia Group Comments during revenue call He ated backed the expansion of hotel wholesale sales from company business to business.
In October 2019, Expedia Group has become a dedicated distributor of Marriott International Wholesale And promotional room rates.
“The way I look at it is that Marriott wanted to pay a lower commission to Expedia,” Wiley said. “Marriott we lost millions in the business we diverted to other hotel chains. In my opinion, this is more of a financial move than a strategic move. I do not know of any other hotel chain idea about such a move.”
“What hotels like about us is that we don’t compete with them,” Wiley said. “We do not have a customer-facing brand, and we do not force them to spend more on Google advertising to sell their brand. We are also better at providing advance or pre-bookings than OTAs. [online travel agencies] They cannot afford to spend on their own from international markets. ”
Prior to the epidemic, there were rumors that hotel beds could be bought from a large travel technology company or that it would continue its acquisition by acquiring smaller rivals such as HotelsPro or Travico. Its second biggest rival Webbeds, A subsidiary of the website, and executives at the website found the idea of selling webbeds to anonymous potential buyers before the epidemic, in revenue calls.
Huss believes he understands the field of travel well. He served for four years as Non-Executive Independent Board Director for Amadeus IT Group, the world’s largest travel technology company.
Sinwen was a major shareholder in Madrid-based Amadeus with BC partners between 2005 and 2011.
Hussein’s business partners at Ingenico and Visa are business partners for many hotel beds.
When asked about certain programs for cooperation, for payment technology in hotel beds New Technology Standards Developed by the Next Generation of Nonprofit Hospitality Technology (HTNG), Huss said he started the job and was too quick to comment.
Speaking of the innovation of payments in general, Huss said he was interested in staying in hotel beds.
“I had some thoughts in my mind, even though it was the early days,” Huss said. “But finding solutions that bring something different to our clients, which no one else does today and eliminates conflict, is my ambition.”
“My track record is in organic growth and digital transformation, as well as some experience in high-transaction businesses such as the fintech sector,” Huss said. “Let’s hope this helps hotel beds in the new market reality.”
Photo credit: Two bedroom loft at Phuket, Angsana The Banyan Tree Group, which owns the Angsana brand, decided in April to distribute some of its hotel listings through hotelbeds. Banyan tree group