Rufino Perez
NH Hotel Group, Europe's
third-largest hotel chain, on Feb. 3 announced further expansion with the
acquisition of the 20-hotel Hoteles Royal group in Latin America. NH Hotel
Group, based in Spain, also announced it disposed of 30 "non-strategic"
properties in 2014 but added nine new ones, leaving the company with around 400
hotels in Europe, the Middle East, Africa and the Americas. Revenue per
available room in 2014 grew 3 percent year over year and CEO Federico Gonzalez forecast
2015 RevPAR growth of 5 percent. Against this background, chief commercial
officer Rufino Perez spoke to BTN
contributing editor Amon Cohen about developments in the company's relationship
with the corporate market.
How is the corporate market looking for 2015?
The GBTA Foundation's forecast fits very closely with our own insights. Although not as fast as [in] North America, we expect growth in Western Europe, and we already are noticing an improvement in Germany, Benelux and even Spain. Latin America is strong too. We expect rates to grow.
How much of your business is accounted for by the corporate market?
Transient business and meetings and events are about 50 percent of our revenue. That share is growing because demand is recovering and our proposition for this market is stronger than before.
Why is it stronger?
We are spending €220 million on refurbishing most of our hotels between 2014 and 2016. We already have replaced 25,000 mattresses and 27,000 showers. It has improved our average score on TripAdvisor from 8 to 8.25, which is hard to achieve.
What trends are you seeing in meetings and events?
We are seeing more companies trying to consolidate their meetings and events spend. They are also increasingly using technology providers like StarCite and Cvent for their sourcing.
How do you feel about them using that route for their requests for proposals?
We are happy about it. It gives us more visibility. Before, it was hard to know who was the right person at the client to approach, and it's a win-win because it makes it easier for the customer to consolidate. We have a specific team to deal with the RFPs coming through these systems.
In the past some hoteliers have complained that online RFPs lead to clients issuing tenders to large numbers of hotels without qualifying them properly first. What has been your experience?
It's true that in the past there were too many hotels being asked, and it wasn't productive for anyone involved, including low conversion rates for us. Maybe customers thought a longer list of suppliers would lead to lower rates, but now they are realizing they need to get the right product, and the RFPs are becoming more and more qualified as they get to know the systems better.
What about distribution to the transient market? Are you seeing a shift away from the global distribution systems?
Some corporate customers in the small and medium segment are using online travel agents more, but the GDSs are still strong. We do not think this will change dramatically.
Are you interested in signing up to Concur's TripLink open booking platform, as some other hotel groups have done?
Not for the time being, but we are prepared to discuss it in the future. As of today, it is not our main priority.
What about technology inside your hotels? What are your latest innovations there?
We have introduced 3D holographic projection technology. It allows CEOs to attend meetings without having to travel there, which saves a lot of time. It is also good for events and presentations. We already have it in our hotels in Madrid and Berlin, and we will soon have it in other cities, including Frankfurt, Amsterdam and Barcelona. We have also introduced free Wi-Fi in our hotels, and given guests pretty good bandwidth and a simple way to log in.
Wasn't that an expensive decision to take?
It costs money, of course, because it's not like installing domestic Wi-Fi: it needs to be secure and robust. But we felt we needed to provide Wi-Fi for free because guests consider it a must.
Have you gained additional corporate business as a result?
I would say we were at risk of losing business if we didn't do it. Accounts have confirmed they are staying with us because of the wireless connection.
Tell us more about your growth plans.
Last week we announced the acquisition of Hoteles Royal, which gives us 20 properties and 2,400 rooms in very good locations, mainly in Colombia. One of our targets is to grow in Latin America, and we now have 60 hotels there. Our other target is Europe, where we are looking to expand in the key cities.