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With new investment, HRS amplifies its corporate travel push to outflank its rivals

05/26/2016| 6:18:39 PM| 中文

HRS, the giant of digital hotel distribution, has expanded into the Australian market by investing in The Lido Group, a corporate and government accommodation aggregator. The move underlines the company’s broader countermoves to its global online travel competitors.

HRS, the giant of digital hotel distribution, has expanded into the Australian market by investing in The Lido Group, a corporate and government accommodation aggregator. The move underlines the company’s broader countermoves to its global online travel competitors.

The famously private Cologne-based company has not disclosed the terms of the transaction.

Sydney-based Lido Group claims to have some 6,700 hotels in Australia in its network. It serves governmental bodies, state-owned enterprises, and global corporate travel management companies, such as American Express. HRS intends to expand The Lido Group’s reach.

Asia-Pacific has been on the mind of HRS bosses lately, even though it first opened its APAC office in Singapore as long ago as 2012.

HRS, which has an estimated 1,500 employees worldwide, has been trying to outmaneuver its arch-rival Booking.com, which has either equaled or overtaken HRS in market share in volume of online bookings made on its home turf of Germany — and where experts estimate a majority of HRS’s total revenues still originate.

Since Tobias Ragge stepped into the CEO role in 2008, the company has been trying to diversify into corporate travel.

During that time, HRS has opened offices in 25 countries to book hotels for large companies. For example, the company is in the process of opening its first office in India, located in Mumbai.

It has also been offering suites of services, such as virtual credit card payment tools, to companies like Alibaba, Google, and Siemens. It told newspaper Handelsblatt that in 2016 it expects to have more sales in the global commercial-client sector than in the private-customer sector.

The corporate travel moves have not gone unnoticed by other players. Most notably, Booking.com has increasingly made a push with its Booking.com for Business effort.

Booking.com has been actively recruiting for the so-called “closed user groups” that access its negotiated deeper discounts specifically for business travelers, whereby a hotel pays a standard commission and gives a typical 15% discount off of its rates.

The company is also said to be recruiting hotels to participate in a new sort order for those users.

These so-called closed user group clauses allow the OTAs and the hotels to have a group that gets privileged access, the way hotels can offer special rates for their loyalty program members, outside of other reciprocal agreements around pricing.

For Booking.com, it is still early days, and the number of participating hotels so far is still low.

HRS is farther along. It has said that it has persuaded about 40,000 hotels to offer business travelers discounts of up to 30% off refundable rates.

HRS may have an advantage in that it says a majority of its customers are traveling for business — the opposite of what’s true for rivals Booking.com and Expedia, which have large leisure traveler customer bases.

Yet it’s unclear how far any online hotel reservation company can go in pursuing such discounts. The world’s largest hotel chains are increasingly interested in comparable efforts for driving more direct bookings on their own.

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TAGS: HRS | corporate travel | The Lido Group | investment
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