HRS has acquired hotel invoice management specialist Itelya, taking full control of the Germany-based company whose services comprise a key link in HRS's end-to-end hotel service model—and in which HRS already owned a minority interest. Financial terms of the deal were not disclosed.
HRS since 2014 has licensed Itelya's invoice collection and data management capabilities to power for clients such post-checkout functions as expense reconciliation and auditing, payment to suppliers and value-added tax reclamation. Itelya's service also plays a key role within the context of HRS's virtual card-based Invisible Pay platform, powering the invoice auditing and reconciliation aspect of that service. In 2016, HRS acquired a 25 percent stake in Itelya via an equity investment.
"They built out the most sophisticated solution in invoice management," said HRS CEO Tobias Ragge, citing that capability as a "core component" of HRS's vision for an "end-to-end value proposition" that serves the full range of clients' hotel needs. Ragge noted in particular Itelya's ability to quickly retrieve invoices containing Level 3 data within the "very fragmented lodging market" outside the United States.
The decision to acquire Itelya outright largely was driven by the potential to more closely integrate the company's services into HRS's platform and guide future innovation, according to Ragge.
"When you have full control over [a company] you can obviously direct the focus of product development toward what you see as core priorities," the HRS head noted. "We want to be in control of our own capability to innovate."
Previously, data security laws often prevented full-scale sharing of data between HRS and Itelya as separate entities—a hinderance to innovation opportunities that will be obviated under the newly unified corporate ownership, Ragge added. "We will probably do much more bespoke development now, together, in order to retrieve richer data from the hotel back-end systems," he said.
The acquisition also brings with it Itelya's client and partner list, which includes booking content sources, such as Travelport and BCD Travel, as well as a number of direct corporate customers and payment brands including American Express, Visa and AirPlus, which use Itelya's services to provide enriched credit card statement data.
Those clients and partners will be supported and able to use Itelya's services on a standalone basis, without needing to adopt any additional HRS services, Ragge said.
Ultimately, the Itelya acquisition helps HRS further strengthen its value proposition of being an end-to-end, one-stop-shop lodging solution from procurement through payment and reimbursement that integrates into a corporation's larger travel-to-expense landscape, Ragge said. The eventual goal is to use all the data insights the company collects to automate and optimize the set-up through machine learning, AI and smarter use of data, he continued.
"The industry in the past was static, with once-a-year optimization, then half a year, quarterly, but that doesn't reflect today's capability of technology. We said that we need to be in control of our own destiny by owning the technology and the data, because this is what I think makes successful companies in the future," he noted.
Ragge said "there is a natural breaking point" for companies that "serve the customer but don't own the technology."
"You need to develop the technology with the customer in mind, and the people who need to develop it also need to own the customer interface," he continued. "Because if Apple would outsource their technology development, I think their products would not be as sleek as they are. This is what we have been going after."