In The Big Chair - Nicolas Huss of Hotelbeds

You joined Hotelbeds as CEO in the spring, how have the first six months gone? Any surprises?

We're seeing a gradual recovery. It’s going very well versus what we anticipated or feared with different waves of COVID but it’s still pretty erratic because it's not tourism rational, it's health rational and being driven by governments so you need to adapt to what is happening.

There were several questions I had when joining Hotelbeds. The first was around people and how enthusiastic and motivated they would be after a year-and-a-half of COVID.

The industry lost possibly 80% of its volume in a few months so it's almost a war effect. We also collectively had to adapt to the shortage of revenue and we all had to cut our cost base pretty aggressively so I was wondering what the mindset of teams would be.

I have been pleased to see that teams were very postive, committed, dynamic and appreciated the company's focus and attention in these months.

Also, maybe because they are young, the average is around 35, they were very keen to come back to work, do their job and interact with clients so that was very positive.

A second comment would be about our ability to go back to normal. It's like intensive sport, you're used to training a lot, you run every day and, all of a sudden, you're locked down and unable to do your training.

How fast would you be able to recover and be up to speed? I was wondering if we, as a company, would be able to get back on track. The reality is that the summer helped me realize we could do it.

Looking forward, what are the priorities of Hotelbeds in the next 18 months?

We need to do well by country, we need to do well by the traveler and by our clients. What we see is that markets are very fast moving and we see massive change in booking patterns.

You have domestic versus long-haul or regional travel. You have last-minute booking, which is happening more than before, so all of this has changed massively.

When you think about people in the hospitality industry access to staff has also changed quite a lot, you have a lot of shortages from a hotel perspective.

How do I translate that, I translate that into opportunities which means we need to make our processes as efficient as possible, we need to digitalize, we need to automate and we need to provide flexibility in the access to a broader range of hotels so that you can move from one country to another if a country is being closed at the last minute. All of these are opportunities.

What do you bring to Hotelbeds, and to travel more widely, from your time at Visa?

There are a couple of of things which are obvious to me. The first one is the opportunity for us as an ecosystem to create much more of a frictionless travel experience.

We did that in the payment industry, I was part of the team that launched contactless everywhere in Europe. I tested, piloted and experienced the Transport for London contactless scheme before it became possible and we were obsessed with making the journey easy from a consumer perspective.

I'm one of the few still traveling a lot and my life as a traveler is a nightmare. I've been in four countries in the past eight days. You can't imagine the number of papers, documents, friction.

No country has organized or standardized the approach. When I was in payments, we were obsessed with standardization.

Here, if you're in France, you probably have to show proof of vaccination or a test certificate in a restaurant but when I go to Spain no one asks for it. It's not well done from a consumer perspective and it's quite blunt and doesn't work well.

When I landed in Slovenia and had a dinner, at 10pm we were asked to leave because there is a curfew so that's an example to make us think what we need to do as an ecosystem.

We need to make sure we provide visibility on the measures wherever I go as tourist or business traveler. We need to ensure more of a digital journey.

Why should someone grab my passport physically when they have my COVID test digitally?  Can't I be face recognized to avoid touch points or friction? Why do I have to wait 15 minutes in a narrow corridor just in front of the plane with no social distancing being respected.

My view is that we have a big change in patterns, we have long-term evolution and we have great opportunity because the volumes are going to go up. If we are more flexible, more adaptable and we bring value, then we should collectively be able to make it easier and benefit from it.

Are there elements from your role at Visa that you can bring to bear to do some of those things?

When I look at the frictionless travel approach I mentioned, and try to translate it to what we do at Hotelbeds, the first thing we try to do is provide trustworthy, up-to-date, government measures. It seems easy but when you cover so many countries in the world, making sure you're up to date and providing good information is not easy.

We try to work with hoteliers to make sure we have not only a digital journey but also a good experience for travelers, but also as a company.

The value add is that we try to bring true automation, technological flexibility and a broad offering to be able to make it possible for tour operators and travel agencies to be able to adapt when there are forced changes in security measures and countries being locked down.

We are seeing a lot of trends when it comes to fintech in travel - you have OTAs launching fintech units and fintech companies getting into travel. What’s your view on these trends?

There are some convergence points I see happening between the two worlds. We see connectivity and mobile devices are expanding the value chain not just from a B2B but also from a B2B2C perspective. This is something that happened in payments some years ago.

For instance, in my world we had to build in-app which now seems something that is fully assimilated but back then, working with Uber for example, we had to create the in-app applications.

When I think about these sort of things being applied to the travel and tourism industry, what I see is that the market speed, the continuous technological developments that players are accelerating, are being used to unlock new value opportunities both for partners and translating into some sort of value creation internally. You see it a lot in the U.S. You see new ways of booking, new ways of approaching the industry, which are incredibly interesting.

I also think there are some implications from a financial services perspective. Think about payments, foreign exchange, cashflow management in the OTA space as well as other players. For them, this is something they need to offer to partners and clients and if they don't do it well they will be impacted in their ability to keep developing their businesses.

Historically, a lot of this has been done with one or multiple relationships with providers and payment specialists from the financial sector. The difficulty in payments is that every single industry and segment is being verticalized so the way you would offer payment at a table in a typical restaurant versus a fast-food restaurant would be very different.

Therefore, there are implications for travel and tourism and what I see happening is some players bringing those financial capabilities in house because they feel they would be better placed to offer a service.

However, having worked on the other side I know that it's not that easy. But this is where I’m convinced that a different play, offering one-stop shop, a specialized frictionless approach, would make a lot of sense.

Do you think the pandemic exposed weaknesses in the hotel distribution landscape?

The pandemic has exposed multiple weaknesses in much more than the hotel chain. Think about healthcare, think about the adaptability from governments, think about working and the office and transport issues.

Personally, even from the outside I was surprised by the resilience of hotels because it's a fixed-cost play and all of a sudden all your clients are disappear. Many are alive and have been able to recover gradually.

I'm not an expert yet but I have this sensation, intuition or conviction that the market is going to mature much quicker post COVID because the pace of change is very different. Before we could predict the market, we collectively had time to adapt, there was no urgency. Now everyone is so eager that things are going to happen.

Are there trends that came to the fore during the pandemic that will remain longer term?

The digital nomad trend is something I believe is going to remain. Many of my friends and peers of independent or listed companies are all doing a two days at work, three days at home kind of pattern.

We also see that when we scrutinize two years of COVID our employee base has moved quite a lot. People who were supposed to be working from the U.K. but end up being based in Portugal or Spain. This is a theoretical example but it creates other friction points from an employer perspective, sometimes ones you didn't even realize.

The volatility in demand is going to stay for some time. What really struck me is that the day the U.K. government opened Portugal, the flow of U.K. tourists was huge. The day the U.S. reopened, it was just brutal from one day to another. Before we knew where we were traveling, today we're opportunistic travelers and therefore our loyalty will decrease.

Governments should be understanding the long-term implications from these changes because it means some travelers will end up going to some other place.

Direct bookings became a trend because consumers wanted to reassure themselves, is that a trend that will go back in favor of online intermediaries?

Too much control from one intermediary is not good for the industry and what I hear from hoteliers is they want to go back to balanced distribution. B2C is fine when it's local but how do you get to these long-haul travelers that are spending much more per night on average and that you don't reach easily? You probably need B2B.

Does travel ever go back to the way it was?

Two or three trends are important - volume, ways of traveling and environmental, social and governance.

Volume is on the recovery trend, it's erratic, it's a government driven trend but now we have proven appetite to travel which means, as we gradually reopen, recovery will be there.

We've discussed the way of travel - nomadic, digital journey, frictionless travel, opportunistic travelers - these are new characters and profiles and these will remain.

And then, going green, being socially responsible is becoming a non-negotiable and this is where I was impressed by how Hotelbeds was positioning itself. We try to promote green hotels. We're helping to promote responsible travel. There are many examples of things we concretely do to travel differently and this is important but it's going to become a must in the years to come.

How big a deal is your recent partnership with Accor?

This is a really significant deal for us and we’re delighted to be the first strategic global partner chosen to connect to Accor’s new distribution platform. It’s significant because it demonstrates how we are committed to finding ways to work with our chains to help them ensure they have a more balanced distribution map, as well as working together with our partners to maximize the simplicity and efficiency of working together. It’s a win-win for efficiency on both sides.

What are your views on subscription models in travel?

There are many subscription models out there, and some are viewed as potentially negative, bringing concerns around rate parity. Some subscription models are actually providing valuable long lead, high transaction value bookings to hotels, as we as introducing their consumers to destination experiences and hotels that would not normally have been promoted in the current transaction landscape.

These subscription models we believe should be fostered to help hotels in building out their base business, allowing them to then yield up their rates as lead times reduce.

What are your thoughts on digital acceleration in the hotel space?

One of the trends that I am sure is here to stay is how serious digitalization and automation has become for the travel industry and for hoteliers in particular.

What we see is a real difference in approach and capabilities with some of the larger chains already using artificial intelligence and robotics to create a more contactless, frictionless service while some of the smaller independent hotels are struggling with digitalization and will need support in order to make sure they are able to fully harness the recovery opportunities.

The value of data, machine learning, automation and AI to improve service and product offerings to customers and partners is increasing in importance and it’s an area which we have continued to develop during COVID and this is helping us rebound with the travel industry as a whole.