The market of business travels has always been very dynamic. Nowhere else do the companies invest so much money into Google or TV ads such as in travel and hospitality. This is all about attracting customers. CEO HRS Tobias Ragge explains how the company has been a hospitality industry leader for 44 years thanks to instant innovation and focus on the needs of customers.
It all began in 1972, just after the Internet had appeared, so it must have had some influence. What were the origins of this idea?
The idea was born in Cologne, where people regularly lacked accommodation during fairs that were organized there. My father’s idea was to negotiate fixed room rates with hoteliers in exchange for providing them with guests and regular occupancy. This soon attracted hotels from the entire Germany. My father would get piles of mail delivered to his office from all over the country.
1995 – the first hotel base available online. 2009 – the first hotel booking website in AppStore. 2010 – the first application designed specifically to enable hotel booking via Facebook. HRS was often the first one to introduce new solutions in the travel industry. Do you still keep this pioneer’s position?
Yes, innovation is in our company’s DNA. Ma father always had new ideas and loved to mess in the industry. In 1985, HRS came up with its own hotel booking engine and four years later we developed the first BTX booking engine. We never stop and we keep on searching for solutions which will move our customers further. In our opinion, cooperation with companies is the future. We support our corporate clients by offering them a platform which enables them to negotiate rates with hotels, to check-out without an invoice etc. Also, we are the only company that offers privately-owned hotels for corporate travels – this done through a booking engine that connects individual hoteliers who manage their properties on their own with corporate clients.
Thanks to the technology developed by Conichi, a startup that we support since 2015, our clients can check in, check out and even open their room using a smartphone. We are on the move all the time.
More than 300,000 hotels in 190 countries. Which one was the most difficult?
Certainly, each country has its own challenges. We were very excited when we opened our first office in Shanghai in 2002. This is because the Chinese culture is so much different from ours. Today, this is routine. We have 28 offices worldwide, hence our considerable experience in the industry.
People say that models such as Sharing Economy (such as Airbnb) change the industry. Did they change your company and your activities?
Airbnb brings new value to the market and this makes the market more competitive. This does not mean that more people will start traveling. It is mostly about competition in pricing and this has the biggest influence on room rates.
We will see if Airbnb becomes the key player in this industry. We expect that the influence on the target group of HRS, i.e. business travelers, will not be that large. This is because Airbnb is mostly about holiday accommodation. In this domain we operate with HRS Holidays, which is doing really well. Our site offers 400,000 properties in Europe which makes it one of the larger players on the market.
How much have our traveling habits changed?
First, we have differentiate between various target groups. People traveling privately need clear information: pricing overview, photos, descriptions and user reviews, because these are the decisive criteria for hotel selection and booking. Business clients, in turn, consider a range of other aspects. Professionals who are in charge of managing business travels mostly look for ways to optimize the process. Thanks to our services, companies which organize a lot of travels can save time and money. This means they can find the right hotel quickly and book it easily. They do not need to worry about paying onsite or to settling all the travel costs first off, which is normally really irritating.
What are the biggest challenges of your company?
Definitely, our competition is a challenge. The market of business travels has always been very dynamic. Nowhere else do the companies invest so much money into Google or TV ads such as in travel and hospitality. This is all about attracting customers. We are well-prepared, because we are oriented at adjusting to the clients’ and the market needs – and not at increasing the size of our company.
Another challenge is finding the right employees. We really lack highly qualified IT specialists, especially those based in Germany. This is the role of politics – to ensure that Germany can keep up with the international competition.
In which country do you have the biggest number of clients? Why is it so?
Most of our clients come from German-speaking areas and the remainder of Europe, because we have been here for the last 44 years and we are still the leader of this market. We develop our company all the time and the HRS Group is based on three foundations. This first one is HRS End Consumer Solutions which gathers different hotel websites for business and private trips (including the HRS website, HOTEL DE, HRS Holidays, and the Apline site Tiscover). The second foundation is HRS Destination Solutions – the technological partner of the travel industry where we also sell holiday accommodation. On a global scale, we focus on cooperating with large companies. This is done via HRS Global Hotel Solutions, which is the third foundation. We grow really fast in Asia and America, so we are able to reach out to more global clients. Giants such as Google, Siemens, China Mobile, Hitachi, World Bank or Alibaba use our services and solutions to manage their business travels effectively.
What is the recipe for the success of your website?
It is quite easy: from the very beginning of our company we have focused on the needs of our customers. We always undermine processes and solutions and we are never satisfied with the status quo. Positive reactions on the market together with the global clients that we acquire show us that this is the right course of action. Thanks to this we can still develop our leading position on the market of business travels.
How do you see HRS in five years? Do you have any long-term goals?
Of course, we have goals, but we do not want to reveal the details. All I can say is that we still want to develop in the global business with corporate clients and we want to be number one in the domain of business travels. Our growth now is so positive that we already have more bookings from corporate clients than from private users. This means that we are on the right way to achieve this goal.
Tobias Ragge studied international economics at the European Business School in Oestrich-Winkel. After his successful graduation in 2002 he started his career at Europe’s leading airline Deutsche Lufthansa AG. In 2004 Tobias Ragge started working as a management assistant at HRS and one year later he took over the marketing management. Since March 2008 he is leading the family business. He pushes forward the internationalization of HRS corporate group successively and expands continuously the range of services for corporate customers on its way to become global leaders. It is a recognized speaker at global conferences and was named in September 2012 by the prestigious Travel Industry Club for „Travel Industry Manager 2012”.
Author: Zofia Wawrzyniak