BTN's annual answer book for business travel managers.
Max Waldmann talks:
hotel solutions tech startup Conichi hit the corporate travel scene big in 2016,
earning BTN's Innovator of the Year Award and other industry honors in Europe and
the U.S. But Conichi—which pitched itself as an agnostic layer of technology
that integrates with various hotel systems to deliver such capabilities as
mobile check-in and check-out, beacon messaging and virtual card payment—was
also a difficult company to pin down. Was it selling to hotels? Was it selling
to corporates? The play-to-both-sides model was reminiscent of another German
company, HRS, which itself invested early in Conichi. But after the first
quarter of 2017, Conichi turned its full attention to the corporate market and
put down firmer roots in North America, opening an office in San Francisco. BTN
lodging editor Julie Sickel spoke to CEO Max Waldmann about the pivot and where
Conichi is finding its greatest tether to corporate travel.
BTN: What led you to tweak your
the hotel market from the hotel side is almost impossible. It's not a fast-adopting
or -adapting market. It's a market which is doing very, very well, and so there's
not a lot of drive to try to change. At the same time, customer and guest
frustration are rising. On a daily basis, we're getting e-mails saying, "Oh
my God, this is really solving one of my core pain points." And the more
digitization is becoming the norm, the more people are questioning why the
process in hotels is such an archaic process. But getting hotels to adapt to a
new process is not as speedy as we expected. I've worked in other industries
before; I thought it would be a lot faster. At the same time, we saw huge speed
on the business travel side. Many industry experts will say not a lot has
changed: Everyone's talking and not everyone's walking. But from an outside-in
perspective, being in the market for not too long, every single event you go
to, every conference you go to, every global travel manager you speak to,
digitization is so hard on their agenda. They're actually seeing CEO pressure
that travel and the travel program needs to change, and it makes some sense
because at the end of the day travel is the glue that keeps the organization
changed since you decided to go all in on corporate travel?
Waldmann: Last year,
we really made the major decision of saying, "We'll put all our resources
and our entire focus on business travel, and we will steer everything from the
business side." Our core focus is making sure that we optimize the
corporate program and the corporates. On the other side, [corporates] are the
ones which have now been actively pushing our smart hotel solution into hotels.
In the course of the last year, we've seen Fortune 500 and Germany 30 companies
with RFPs requesting smart hotel functionality. We're really seeing an
extremely steep increase in traffic, in check-ins, in number of hotels and
number of corporates because now the entire spiel is not "We're selling to
hotels" but [rather] corporates are selling to a property or high-volume
portfolio. We've also pulled together travel managers from leading corporates
which are sitting on [our] board and helping us to make the right decisions in
the business space.
BTN: Are you
gaining traction with independents, or also with chains?
Waldmann: Chains are
opening up and speaking to us and actually piloting and rolling out and working
with us. A lot of this halt over the last year of people saying, "We're a
chain; we're not looking at any sort of outside technology"—that's really
loosening up because corporate [travel programs are] behind this, bringing
significant volume and immediate adoption.
BTN: How is your
work on payments going?
Waldmann: Now we can
really offer a complete, easy, end-to-end payment process. We started this a
couple years back. People now refer to it as blockchain. We're allowing
payments to run through in an end-to-end fashion. You hand over credit cards at
the hotel and the credit card is limited or it's a virtual card and it's limited
to an amount that's just, say, 150 euros. But the medium itself is just stupid;
it's unintelligent. Despite the fact that your room rate is only 120 euros, you
have to have a buffer on top of that, and that buffer is oftentimes used and
misused for overpaying rates but also for paying auxiliaries, etc. We can
actually drive and steer the right payment and control the wrong payments. We
can say, "The negotiated [average daily rate] is 110 euros, and you can
only pay 110 euros, but you [also] can pay 5 euros for Internet,"
or, "You can pay nothing for Internet because Internet is negotiated in [your
rate]." We're able to extract a lot of data on what's actually happening
"We're not looking to do any [initial coin offerings], we're not having our own cryptocurrency. What we're looking at is: How do we send data in a fast and easy and cheap way from A to B?"
BTN: And how are
you using the check-in data?
Waldmann: Once we've
actually generated that data, you can optimize the sourcing process and you can
really create a traveler-centric sourcing process. That's something we've been
doing with HRS. We can take those [check-in] data points and see: What are they
paying? Are they overpaying? What are travelers actually paying for? All those
data points are combined with traveler satisfaction because sourcing oftentimes
is based on prices but the actual real-time traveler satisfaction says, "There's
a construction site on the other side of the road," or "The property
is old and rusty." We're taking all of this into consideration and
providing it to partners like HRS, like CWT.
BTN: Are HRS and Carlson
Wagonlit Travel your main partners at this point?
Waldmann: We're essentially
working with everyone. And this is not us being opportunistic. It's a very
clear company strategy of providing this technology bridge between corporates
and hotels. This bridge should be available to everyone. The first big partners
who have been putting this live have been HRS, CWT and [Amadeus'] Cytric. Other
guys like Roadmap and the Tourist Mobile app have been leveraging the technology,
too, and Hyatt is piloting it.
Microsoft stirred up some controversy in April with the release of its Travel Manifesto, calling for...
Airbnb's presence—and acceptance—continues to grow in the corporate travel space. Its business travel...
XL Airways CEO Laurent Magnin sees the heated competition among low-cost carriers on transatlantic...