Three years after hotel solutions company HRS made a minority investment in The Lido Group, a hotel technology and payments provider in Australia and New Zealand, HRS has fully acquired the company. "We collaborated successfully for three years, and from our strategy to cover all the major markets globally with our own operations, we wanted to add the last missing piece in our portfolio, which is why we made this 100 percent equity investment," HRS CEO Tobias Ragge told BTN.
This month, more than 60 Lido employees and the small staff HRS already has in the region will move into a new HRS office in Sydney. Lido CEO Steve Mackenzie will retire upon completion of the merger. Ana Pedersen, who joined HRS in July as managing director of Australia and New Zealand, will head the new office. She previously was global director of sales and marketing for Australian travel management company QBT, and spent 14 years with BCD Travel, where she was VP of global hotel strategy.
Since HRS's 2016 investment in Lido, HRS clients have had access to Lido's 8,500 hotels, almost half of which do not appear on the global distribution system. What will change is that HRS will "connect its technology stacks where it adds incremental value and connect their payments solution to our overall payment stack," Ragge said. "This is something we said we wanted to do only if we would commit 100 percent. We believe it will create the next level of benefits we can generate."
For Australia and New Zealand travel buyers, that means HRS will bring a strong procurement proposition and a strong global tech stack, Ragge said, adding, "We are not limited to any [online booking engine], we have the content, we have new technologies like reshopping and multisource solutions in place and we have a global payment solution we are adding [to Lido's] local payment solution," which works well in Australia and New Zealand, Ragge said. "It will give our customers the possibility to cover the full Australian continent and all the opportunities there."
HRS is looking to see how it can scale Lido's payment solution in other parts of the world. "Usually, payment solutions don't work in a one-size-fits-all approach because payment markets are usually very locally regulated," Ragge said, "so you need to build a variety of solutions to have global coverage for all the markets available. That is what we are doing."
HRS has 11 offices in Asia/Pacific, including the expanded Sydney office, and has been in the region for nearly 20 years, but it was missing its own operations and team on the ground in Australia and New Zealand, which is a growing market. The Global Business Travel Association expects Australia hotel rates to rise nearly 5 percent next year and overall business travel spend in the country to grow more than 4 percent annually from $23.6 billion in 2018 to $28.9 billion in 2023. About 300 new properties, representing 45,000 rooms, are in the pipeline for Australia over the next five years.
As for the company's road map, it is focused on "anything which we would call corporate lodging and meetings. We see more and more convergence from transient and groups and meetings business," Ragge explained. "We're innovating on all fronts, from procurement through search technology to the payment component. For the payment piece, we are building some unique solutions, which we will talk about in the coming weeks and months, because that is where we see the biggest opportunity to drive down leakage, which is one of the biggest challenges facing managed corporate travel."