03 | 2016

The Hotel ExpertTHE MAGAZINE FOR TRAVEL MANAGEMENT AND HOTEL PROCUREMENT

MICE: Short work Strategic MICE procurement without media discontinuity

Touring Seoul

Success story: Meetago

MICE location check Kraków

Dear Readers,

We focus on two major groups of topics in this issue of The Hotel Expert, and in both cases, the core

theme is consolidation. Our point of departure in the first story is the discount and rate campaign that

the international hotel chains have launched in the wake of consolidation. What does the increased clout

that the participating players can exert in negotiations mean for you as travel managers? Whether this

development is an opportunity or a danger for corporates will be decided in part by how flexible you

are in putting together your hotel programme. We took a look at the widely discussed topic of dynamic

rates and asked travel managers about their experiences. You can read the results from page 24 and 36.

Alongside this, we put the spotlight on the complex topic of "event planning", and consequently also its

consolidation. For a long time, it was believed that the process chain in the MICE segment could not be

standardised and automated, because all attempts to unravel its complexity had failed.

But now a new era is dawning in the MICE segment. Admittedly, there is still a long way to go to reach

the comprehensive visibility of "total cost of event". However, the first steps have been taken, the ini-

tial course has been set (from page 8), and very soon you will have the same integrated overview for

your MICE processes as you have long been accustomed to having in other areas.

HRS will be your partner and support you on this journey. To this end, we are systematically working

to further develop our solutions: for a fully integrated end-to-end process, both in the transient sector

as well as in the MICE segment. Let's talk about this and take the next step together.

I hope you enjoy reading this issue of our magazine.

Best regards,

Tobias Ragge,

HRS CEO

Tobias Ragge,

HRS CEO

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EDITORIAL

MICE Kraków 28

Issue 03 | 2016

CHECK-IN.

News

Reports from the industry. 4

COVER STORY.

Short work 8

Booking conferences online? This capability has been

around for more than 10 years. Yet offline bookings

still predominate, and companies have difficulty get-

ting an overview of the actual costs that are incurred

in the events area. The reason: the sheer complexity

of MICE and all that goes with it. But that is about to

change now.

"Communication is the most important thing" 13

Interview with Oliver May, Global Lead MICE at HRS.

BUSINESS TRAVEL

Steep ascent 18

In the 1960s and 1970s, the Republic of Korea in the

south of the Korean Peninsula was considered to be

one of the poorest regions in the world. Not any more!

Almost unnoticed, the Asian Tiger worked its way up

into the league of the world's leading economies and

export nations.

Seoul: Facts & Figures 23

TRAVEL MANAGEMENT

Grab that black box! 16

For a long time, Andreas Konkel wouldn’t go near the topic

of “events” – the maze that had grown up over the years

seemed to him to be too impenetrable. Using Meetago, he

now believes that he holds the tools in his hands to shed

light on the murky area of expenditure in record time.

Dynamic rates 24

The floating-rate trap

MEETINGS & GROUPS

Secret capital 28

Kraków, Poland’s second-largest city, developed into a

leading meeting destination in eastern Europe in just a

short time – with an inspiring combination of historic

charm and post-modernist infrastructure.

CHECK-OUT

Expand your hunting grounds! 36

The acquisitions of recent months have been concen-

trated particularly in the hotel chain segment. In light

of the record figures achieved in these deals, experts

are forecasting a rise in accommodation costs and at

the same time a decrease in services in the near fu-

ture. What is the best way to react to this? An inter-

view with HRS CEO Tobias Ragge.

IMPRINT

Publisher: HRS Hotel Reservation Service Robert Ragge GmbH, Blaubach 32, 50676 Cologne Responsible for the content: Anja Turner, Head of Marketing HRS Global Hotel Solutions | Rainer Puster, phone +49 221 2077-5108 | der-hotelexperte@HRS.com Coordination, editorial work and layout: publish! Medienkonzepte GmbH, Hanover Editor in Chief: Anke Pedersen Authors: Stefanie Bisping, Johannes Kühner, Mathis Paus and Rainer PusterPhotographers: Anna-Kristina Bauer, Cornelis Gollhardt, Andreas Graf, Jun Michael Park and other sources as listedDesign: Kirsten Semmler Copyright: HRS 2016

18Touring Seoul

Consolidation 36

MICE: Short work 8

3

Contents

Hotel apps: Highs and lowsThe majority of hotel apps fail to satisfy business travellers: In a sur-

vey conducted by mobile specialist Qikserve, more than 80 percent of

all users stated that the hotel apps they were familiar with were either

outdated or lacked key functions. Worse still: The business travellers

surveyed frequently did not even know that many apps existed. It

appears that HRS is better at this: Just like in the previous year, the

company was once again the only hotel portal to achieve first place

with its app at the Business Traveller Awards – directly behind airlines'

mobile applications.

Good marks for business trips

Most business travellers give a favour-

able assessment of their business trips: 73

percent are satisfied with their business

trip experiences in the past three months.

Thus this proportion has increased by two

percentage points from 2015, as the Global

Business Travel Association (GBTA) has

determined in its latest study, the "Business

Traveler Sentiment Index Global Report".

Further survey results: 77 percent of re-

spondents stated they had achieved their

goals on business trips. However, there is

dissatisfaction about poor Wi-Fi (46 %),

too little time with customers (40 %) and

unclear targets before departure.

So how does actually that work with robots? Can they have

relatives? In any case, Japan Airlines has started using a

robot at Tokyo Haneda Airport – and it is a cognate of the

technological marvel that Hilton Worldwide had previously

tested as a concierge in one of its hotels. The 58-centime-

tre-high humanoid called NAO was capable of answering

passengers' questions in three languages, could provide in-

formation about the airport and about flights, and exchange

information with airline employees. KLM has already test-

ed a robot too: Spencer. His job is to conduct passengers at

Amsterdam's Schiphol Airport to their connecting flights.

Well then: Here's to understanding among nations.

Konichiwa

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CHECK-IN

Airlines: Free Wi-Fi is a scarce commodityTwo-thirds of European airlines still don't

offer any Wi-Fi on board, a study conducted

by comparison website Check 24 revealed.

Out of a total of 57 airlines surveyed, only

18 enabled their passengers to go online on

board the aircraft. However, there is more

to the prices than meets the eye, and some

of them vary considerably: To get 40 mega-

bytes of data volume, passengers flying

with Tap Portugal pay €30. At Air France,

passengers have to pay €10.95 for 60 min-

utes of internet access. For 50 megabytes

and an hour's surfing, Air Berlin demands

€8.90. The only airline to offer free internet

during the entire flight time is Norwegian

Air.

GBTA: Minimal increase in travel costs in 2017Additional services driving the cost of flights, mega-mergers in the hotel busi-

ness have yet to have any effect: In its "2017 Global Travel Price Outlook", the

GBTA Foundation risks a look at the coming year. The conclusion: Although the

cost of business trips will rise overall, the increase will be minimal. Take the

example of flights: Rising costs for additional services will be offset by lower oil

prices and taxes and could thus lead to a price increase of 2.5 percent. Take the

example of the hotel industry: According to the study, the Marriott and Starwood

mergers and other chains will start having effects on room prices in 2018 at the

earliest. Thus, in Eastern Europe, the price of a room will be 2.4 percent lower

next year, and in Western Europe 1.8 percent higher. However, this prediction is

by no means certain: There could be shifts because of turbulence on the financial

markets, the effects of Brexit, which cannot be foreseen, and geopolitical risks.

117 million overnight stays

One in every three overnight stays in Germany is related to con-

ferences, meetings, seminars or incentives: Business travellers and

event participants clocked up 117 million overnight

stays in hotels in the year just past. This was the

figure documented by management consultants

GHH Consult in its 2016 Hotel Market Report.

Together, these business travellers generated

turnover of €82 billion - 10 percent more than in

2014. It was not just cities like Berlin that profited

from the boom, which exceeded the 30 million overnight

stay mark for the first time in 2015. Hotels in medium-sized and

small cities also managed to fill their beds.

Belt-tightening

More and more business travel-

lers have to make do with econ-

omy class on flights, because ex-

penditure for work-related trips

rose by more than €1.5 billion in

2015, VDR, the German Business

Travel Association, determined in

its latest analysis. Overall Ger-

man companies spent around

€50.9    billion last year. Thus

travel managers are obliged to

compensate for the rise in travel

costs by making savings in flight

ticket prices.

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News

Credit card settlement provider AirPlus has identified the six major trends in

business travel in 2016 in the latest edition of its "International Travel Man-

agement Study", which it publishes yearly. According to the study, the areas of

social media, big data, sharing economy, globalisation, data security and envi-

ronmentally friendly travel will continue to gain in importance. The respondents

comprised 847 travel managers and 1,158 business travellers.

Young business travellers are way ahead of

their older colleagues when it comes to using

digital technologies: 48 percent of all Millen-

nials use social media to reach business part-

ners and colleagues more efficiently, while

the average for all age groups is only 36 per-

cent. The 18- to 34-year-old age group are

also among the pioneers in process optimi-

sation: They turn to their smartphones more

frequently than their older colleagues to keep

an eye on both personal and business costs

as well as to digitise charging and settlement.

This analysis comes from the GBTA Global

Business Travel Sentiment Index, which was

prepared in collaboration with American Ex-

press.

ACTE Global Summit

26–28/10/2016 | Amsterdam

The changes occurring in travel

management is the topic of sever-

al breakout sessions at the Glob-

al Summit – whether in relation

to risk management, virtual pay-

ment or traveller centricity. On

the podium, the heads of Amster-

dam Schiphol, KLM, Aeroflot and

other airlines will recount how

they intend to react to business

travellers' new requirements.

www.acte.org

51. BME Symposium

Procurement and Logistics

9/–11/11/2016 | Berlin

Trade conference, panel discus-

sions and exhibition on all as-

pects of controlling and re-

porting, risk management in

procurement and future trends.

www.bme.de

VDR & GBTA Conference

14–16/11/2016 | Frankfurt

Europe's largest business travel

event subdivides its programme

into the areas of technology,

traveller management and trav-

el management. Here is an ex-

cerpt: Which method of deal-

ing with which global dangers is

recommended by experts, which

opportunities does the mobile

market offer in the meantime,

and what helps companies posi-

tion themselves successfully in

travel management?

www.vdr-service.de

Business Trip Forum

22/11/2016 | Düsseldorf

The "Business Trip Practice Day"

is now called the "Business Trip

Forum". The sharing economy,

OBE in small and medium-sized

businesses, as well as duty of

care and data protection are

among the topics that will be

portrayed in presentations that

concentrate on practical use.

www.vdr-service.de

Dates.

Millennials: Smart users

Trends in travel management:From data security to big data

SOURCE: AIR PLUS

A divergence from 100 percent arises

when not all participants answered the

question.

Future trend

Constant trend

Declining trend/no trend

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Travel management Business travellers

6

CHECK-IN

Data security

Social media

Globalisation

Sharing economy

Big Data

Environmentally friendly trips

88 % 54 % 34 %

7 %

87 % 50 %

8 %

37 %

60 % 31 % 29 %

15 %

59 % 33 % 26 %

10 %

85 % 44 % 41 %

7 %

77 % 48 % 29 %

15 %

88 % 42 % 46 %

11 %

88 % 34 % 54 %

11 %

92 % 40 % 52 %

7 %

85 % 45 % 40 %

12 %

80 % 36 % 44 %

14 %

45 % 82 % 37 %

10 %

Higher taxes for parking spaces

Federal Supreme Finance Court ruling: From a taxation point of view,

free parking spaces are not fringe benefits to an overnight stay in a

hotel and must therefore be taxed at the full rate of 19 percent, in-

stead of 7 percent. This is based on a taxable value of €1.50 for each

parking space. This has no consequences for business travellers: The

use of a parking space can "be part of an all-inclusive price for addi-

tional services, for example in a business package," the Lower Saxony

branch of DEHOGA, the German Hotel and Catering Association, an-

nounced. "Because the use of a hotel parking space is business-related

in the case of business travellers, these costs can be offset against

taxes by their employer as incidental travel expenses."

Now it’s official: China superseded the United States as the larg-

est business travel market in 2015. Companies from the People's

Republic of China invested more than €263.4 billion in travel last

year, around €1 billion more than in the United States, according

to Global Business Travel Association calculations. A HRS data anal-

ysis shows that China's rise to the top of the list had been on the

cards for years: According to the analysis, Chinese corporations'

bookings increased fivefold to Germany alone from 2010 to 2015.

And Germany itself is also among the upward climbers: Germany

(€57.5  billion/+ 9.8 %) dislodged Japan (€56.2  billion) from third

place among the world's largest business travel markets, followed

by the UK, France, South Korea, Italy, Brazil and India. Business

travel volume worldwide: around €1.08 trillion.

Eyes on growth

Multi-billion dollar deal: The AccorHo-

tels group has now also formalised its

takeover of the FRHI Hotels & Resorts

hotel group and its Fairmont, Raffles

and Swissôtel brands. The purchase

will allow the company to further ex-

pand its role in the luxury hotel seg-

ments to currently 155  hotels and

resorts. In total, the acquisition of the

French group will cost the Canadian

holding company around US$2.9 bil-

lion. "The takeover opens up enormous

growth prospects for us, raises our

international presence to unexpected

levels and generates long-term value

creation," Sébastien Bazin, Accor Chair-

man and CEO, sums up the acquisition.

China ranks above the USA

and Germany

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News

The relief was almost palpable. HRS had

hardly announced its shareholding in MICE

experts Meetago when hundreds of travel

managers felt that the 2015 ITB had been

salvaged. "Now there will finally be a MICE stan-

dard," they cheered optimistically. At last there

will be an end to the "event segment black box"!

But wait: Costs in the flight, train travel and car

rental segment have been consolidated for some

time now, and they are well on their way in the

hotel segment too, but when it comes to the MICE

segment, people are still shrugging their shoul-

ders? Even though this segment in particular does

not just account for an estimated one in every

three overnight stays, but also considerable ad-

ditional costs?

Standardisation through automation

And indeed, travel managers had expected to get

some transparency regarding the costs for all as-

Short work

TEXT: ANKE PEDERSEN

Booking conferences online? This capability has been around for

more than 10 years. Yet offline bookings still predominate, and

companies have difficulty getting an overview of the actual costs

that are incurred in the events area. The reason: the sheer

complexity of MICE and all that goes with it. This likely to change

now, however.

8

COVER STORY

pects of events given the fact that conferences

have been bookable online for ten years. In real-

ity, however, more than 80 percent of all confer-

ences are still organised offline – and thus cannot

be tracked, let alone controlled. The reason: the

sheer level of resignation when faced with an area

where travel managers have to keep track of the

expenditure of different travellers from different

departments in different cities for different event

formats with varying delegate rates. Against this

backdrop, it comes as no surprise that the pros-

pect of standardisation through automation trig-

gered a certain level of enthusiasm.

The magic word in this respect is "real-time book-

ing", and means nothing other than when they

ask various (conference) hotels for offers, plan-

ners no longer have to compare them them-

selves: From now on, this work is handled by the

instant booking system in question. It does this

completely automatically by listing the offers of

9

Total cost of event

all those hotels that correspond to the planner's

query or criteria, as the case may be. And only

those which are available as requested. Because

with this system, the planner only has to decide

and book – done!

However, the simple automation/digitisation of

the planning and booking process on the portals'

side alone will not suffice to significantly increase

the online share – and thus the trackable booking

volume – in a company. Because initially it must

be clarified which type of events should be tar-

geted at all.

Particularly the large conventions and conferences

from 250 people upwards that are time-consuming

to plan? Or the standard conferences with up to 30

participants? Although the first category accounts

for 45 percent of total turnover, according to HRS

CEO Tobias Ragge, they only account for around

3 percent of all hotel events, he says. Add to this

the fact that organising and running them is almost

always handed over to specialist event plan-

ners and agencies. On the other hand, the

smaller standard events comprise train-

ing courses, further training or recruit-

ment meetings, the majority of which

are handled by secretaries and as-

sistants – particularly in smaller and

medium-sized companies.

If we put the priority of process

standardisation above the priority of

cost-cutting – the one will follow from

another as a matter of course anyway –

then the latest GHH Consult study on the 2015/16

conference and convention market points in a

clear direction. Because according to the study, it

is the standard events that dominate day-to-day

MICE business: "Events which fewer than 30 peo-

ple attend comprise almost 75 percent of the to-

tal market," according to the calculations of the

management consultancy company with respect

to the conference market in Germany. "One in

nine events lie in the 31 to 50 people category,

and only 5 percent of all events invite between 51

and 100 participants." These figures are probably

similar in other countries, according to the study.

Against this backdrop, it makes sense to do what

Tobias Ragge already called for during the Corpo-

rate Travel Forum 2015 (CTF) that HRS organised

in Germany: "Preferably, we should standardise

the cookie-cutter events first and then proceed,

step by step."

Admittedly, this step alone has the potential of

turning the entire event market on its head. "Di-

rect booking is faster than the conventional, un-

structured query process by email and telephone

by a factor of 10," Expedia MICE head Felix Un-

deutsch states. And if this assessment is even just

remotely accurate, more than 75 percent of all pro-

cesses in the MICE segment could be reduced by

a factor of 10 in future; simply because time-con-

suming searches and comparisons will no longer

be necessary. These savings, Undeutsch says crisp-

ly, "will help the entire sector: agencies, planners

and hotels."

Degrees of consolidation

against a lack of transparency: Now the MICE segment is being tracked too

100 %

100 %

96 %

48 %

0 %

Well on their way

Travel management consol-

idated the flight, train trav-

el and car rental segment

some time ago, and they

are well on their way in

the hotel business too. But

the MICE segment, which

accounts for one in every

three overnight stays?

MICE "is the biggest topic

in travel management that

hasn't been covered yet,"

says Dirk Gerdom, Presi-

dent of VDR, the German

Business Travel Association.

That has to change.

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Marina Christensen, Best West-

ern: Authorisation limits

too low.

10

COVER STORY

Bye-bye, maverick buyer?!

However, it would not just be the process times

and the associated indirect costs generated in

the events area that would be drastically cur-

tailed. The ease of use of real-time booking could

also herald the end of the era of maverick buy-

ing. Even the secretary or assistant, who is often

reassigned part-time in the role of planner, would

no longer have any reason at all to arrange an

event of any kind anywhere other than where it

is most convenient for him/her, because it is eas-

iest for him/her.

At least theoretically, because after all, the topic is

often extremely emotionally charged. For exam-

ple, when Greta Jesinghaus, Strategic Buyer at in-

surer Münchener Rück, was asked at the CTF 2015

what her greatest challenge to the reorganisation

of her events area was, this is what she replied:

"The real problem was an emotional one, meaning

an internal one. You have to sell a change like this

in-house, and that is a process that takes years –

and is possibly even more difficult than interna-

tionalisation.«

"Visible at a glance for the first time:

the 'total cost of event'"

Oliver May, Global Lead MICE at HRS, is nonethe-

less totally convinced that the benefits of online

booking, instant bookings and integrated pro-

cesses will be embraced very quickly. Above and

beyond this, he is persuaded that it won't be lim-

ited to smaller events. Of course, he says, these

will initially be the ones to be tested. "But then,

when the users see that it works, larger ones will

soon be booked as well."

May does not go on to dispute the fact that as the

size increases, the number of requirement crite-

ria rises with it. On the one hand, Meetago is cur-

rently working on a booking screen that is – "even

simpler than it already is today anyway" – where

the two worlds of "instant" and "RFP query" can

be replicated together. Remember the catchword:

Usability. On the other hand – and May is particu-

larly proud of this – since recently, Meetago has

also been able to handle RFP queries through its

in-house online booking tools (OBT) like Onesto

and Cytric – further integrations are set to follow

soon, he says. "We are the only ones doing this, no

one else can do it." Even participant management,

which is an absolute must for many companies,

takes place just as easily as a meeting invitation

via Outlook, he says. Remember the catchword:

Process integration

Put another way, this means: Even more complex

RFP queries will be so easy to handle in the fu-

ture that professionals will no longer be absolutely

necessary. "Transparency is generated when you

get EVERYONE on board," the expert explains, and

this is precisely what has been achieved with this

self-service tool. On the bottom line, this allows

"total cost visibility of direct and indirect costs for

the first time – the' total cost of event'."

Nevertheless, we still some way to travel before

we reach a world of short processes and total

"Direct booking is faster than the conventional, unstructured query process by email and telephone by a factor of 10."

11

Total cost of event

transparency. Because although the technology

might have already got there: The participating

players are still at the starting point. Take the ex-

ample of the hotel industry. When it comes to

the authorisation of certain availabilities required

for a real-time booking, fears of a loss of control

still dominate. After all, the argument goes, an in-

stant booking could collide with a query that ar-

rives at the same time through another channel.

And there is another technological reason that is

preventing the hotel business from participating

in the one-stop-shop process immediately: the

lack of the requisite interfaces in their PMS sys-

tems up to now.

Continue developing in a triad!

For corporates, too, much needs to be clarified

first before implementation can occur. Because,

the hotel industry complains, it's often the case

that the authorisation limit for an assistant is set

lower than would be necessary for a typical event.

Accordingly, established authorisation processes

must be adjusted to allow the real-time booking

of events. This is why Marina Christensen, Sales

and Marketing Director Business and Group Travel

at Best Western Hotels Central Europe, is demand-

ing: "Give us contacts who are above assistant lev-

el or have power of representation!"

It is likely that the way to the Garden of Eden of

strategic MICE procurement could only be cut short

if all participants were to sit down around one ta-

ble. Providers, suppliers, corporates. Just as HRS

CEO Tobias Ragge had already demanded during

the CTF 2015: "We all have to develop further in

a triad," he appealed back then," and faster as we

have before as well." Well, get going then!

Blind flight

Previous booking process for MICE

Conference in Berlin

Unstructured search

» Search engines

» Web portals

» Website providers/locations

Zero transparency

» Who books?

» Where?

» What?

» How much?

Surprise package

» Hotel invoice overnight stay

» Delegate rate

» Additional costs

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"You have to sell a change like this internally, and that is a process that takes years – and is possibly even more difficult than internationalisation."

12

COVER STORY

The MICE topic is an exceedingly com-

plex matter that travel managers had

been putting off tackling for many

years. What was, or rather is, the prob-

lem? Do companies know at all where

to start in the area of events?

Although companies do not know ex-

actly what expenditure they have in

the MICE area, because so many pro-

cesses are transacted offline, but they

are in no doubt about where they have

to start. And that is with all depart-

ments that carry out training courses

– and these are generally located ei-

ther in Human Resources or in Sales

and in Marketing.

What is the best way to proceed?

It often makes sense to take a step back.

Many companies initially interview their

employees in order to get an idea be-

forehand of how much is going on at all

in the area of events. At VDR, we have

even developed interview guidelines for

this purpose. In this respect, personal in-

terviews are usually better for getting

an understanding of the status quo than

general surveys. As is almost always the

case when an existing process is about

to be tackled, the objective is to identify

where fears could potentially arise. Af-

ter all, employees frequently are afraid

that something is going to be take away

from them or they are going to be con-

trolled. What I mean by this is: Of course

it is about control – but in the interests

of the employees themselves. It is also

helps to protect them if they act in ac-

cordance with the guidelines. Because at

the moment, this is often not the case.

So the message is: Do it, but do it by the

company's rules!

Who should be involved at the start of

the project, and which groups can in-

fluence the decision?

Of course, you have to get all stakehold-

ers on board and involved right at the

start of a project so that they don't feel

Total overview

New booking process for MICE

Consolidated search

Defined access:

Designated event planners via

the predetermined booking channel

Automated,

integrated data transfer

Single sign-on

Total cost of event

Consolidated invoice

including travel costs and

cost centres

Holding a MICE tool like Meetago in your hands is one thing – using it successfully in your company

is something else entirely. In an interview with "The Hotel Expert", Oliver May, Global Lead MICE at

HRS and Deputy Head of the MICE Expert Committee at VDR, the German Business Travel Association,

explains what travel manager should be aware of during the implementation process.

"Communication is the most important thing"

13

Total cost of event

they have been steamrolled. The whole

thing doesn't make any sense unless all

participants play along.

Which stakeholders are you looking at

in this respect?

Those who plan, but also those who are

confronted with it, for example in the

accounts department. Without them it

will be difficult, because they general-

ly have very precise ideas about how

everything should run. That can turn

into a real obstacle course, if you want

credit notes for hotels, for instance, but

the boys in accounts say: Oh no, not like

that! You also have to get the people in

the auditing department on board, and

of course the data protection people

in IT/Security, and very important: the

works council. Without the green light

from the works council, a decision can

be delayed unnecessarily. What is im-

portant is to get all these stakeholders

on board at an early stage.

That sounds like quite a lot of people.

Yes, but you can't make the group too

big either, or everyone will want to

have a say. Then yet another person

in the group won't just want a partic-

ipant management system, but on top

of that this or that feature as well. A

lot of things are possible technological-

ly – ideally, however, you should pre-

pare the project schedule in such a way

that the participants then only have to

say yes or no.

The catchword is emotions: A common

argument when saying that the MICE

issue cannot be standardised is that

travel arrangers in particular fear they

will lose the smaller promotional gifts

they get from the hotel industry. Is

that still true in an era of compliance?

Any time I presented the concept to

secretaries who were responsible for

event decisions, the reaction was usu-

ally: "Great, when can we start?" "That is

exactly what I need, that will definitely

lighten my daily workload."

But of course that also depends on the

size of the company and its corporate

culture. In a corporation, of course, you

can simply stipulate: It has to be done

this way and that way now. Whether

this will then be observed is another

question entirely. At small companies,

you can get the show on the road if

you can convince the decision-makers.

And that includes regular communica-

tion. Communication is definitely the

most important thing of all – explain-

ing, allaying fears, convincing – perma-

nently. And you have to capture your

colleagues for long enough until they

have learnt and understood the pro-

cesses.

Thus the decision to use a MICE tool

like Meetago is merely the first step,

while the far greater time and effort lie

in convincing, project planning, succes-

sive implementation and so on. Do you

provide any support in this in the form

of supplementary advisory services?

"What is important is to get all stakeholders on board at an early stage."

One-stop shop

Strategic MICE procurement in SAP: simple and without media discontinuity

Query Shopping basket Approval &

contract closure

Data transfer & release Consolidated

invoice

Vect

or

data

: A

dobe S

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• C

orn

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Gollhard

t

Total cost of event

Meetago has developed a one-stop-shop solution specially for corporations via integration into SAP, which functions without any media discontinuity what-

soever. "You only have to transfer the Meetago shopping basket into SAP's internal shop process, where all authorisation processes are integrated, and then

everything else works automatically," MICE expert Oliver May explains. Even reminder emails to the people who are responsible for issuing the authorisa-

tions are included. "And in the end, the order comes back to Meetago in an audit-proof format with an order number. Done." Which means: The procurement

process is audit-proof and transparent, takes a company's security issues into consideration (duty of care) and: There is no more media discontinuity.

14

COVER STORY

Oliver May, HRS: Time and cost savings

Of course, at the product level, we gen-

erally find we can persuade our cus-

tomers very quickly. We achieve quite

brutal process efficiency, I don't really

have to say much more about it. What

is actually more important is to support

people on their journey. As a general

rule, it takes six months from the first

meeting to the point when everything

is set up and running. During this time,

you have interactions with the compa-

ny time and again. Of course, there has

to be someone in the company that

drives the topic forward. Because the

tool is not static, after all, but continues

to develop further, particularly through

the lessons learned over the course of

the project.

Where is the greatest need for sup-

port?

Initially, we develop a game plan to-

gether for how we can best get all

stakeholders on board. And if prob-

lems are expected in this area, we can

provide examples of how we were

able to solve similar problems in oth-

er companies. For example, if regional

decision-makers resist the changes. Of

course, they then find a thousand ex-

cuses for why the company should go

down a different path. In such cases,

we then try to meet at least 80 per-

cent of their requirements in order to

get them on board. That is all the more

important, because after all, these peo-

ple also have to convince their own em-

ployees in the end of the day.

Yippee!

Yes but in the end of course, every-

body wins: Procurement saves costs,

the planners in the specialist depart-

ments can work faster and have some

of the burden taken off them, and the

participating hotels also enjoy a ben-

efit from these bookings because we

achieve a very good conversion rate

for them.

And that means?

In the "unmanaged" segment, we tend to

see a type of "shopping" mentality. In-

itially, employees conduct some online

searches and then send off a non-bind-

ing enquiry to this place and that. How-

ever, our customers in the "managed"

segment don't want to shop. They want

to book, and to do this, they send re-

quests out to only four hotels on aver-

age, and then they book one of them.

Of course, the process is never totally

efficient until you succeed in mapping

the entire value chain. At what point

do you have to take the decision about

how the tool should be embedded into

your own IT landscape?

That is completely different in every

case and depends on companies' indi-

vidual suggestions and ideas for solu-

tions, which we often subsequently

develop further on-site. Currently, the

majority initially puts the tool onto their

intranet as an stand-alone solution. Then

the complete integration of the proces-

ses takes place on a gradual basis. Some

companies want to integrate the tool

into their ERP system. In that case, how-

ever, the people in the company who

are responsible for SAP, Oracle or simi-

lar systems have to be persuaded first.

Others would like to map the process-

es in their procurement system, and yet

another group say: Because of the duty

of care issue, connection to our OBT is

much more relevant than the link-up to

SAP. However, once the integration has

been completed, everyone recognises

the benefits of this holistic approach.

Mr May, thank you very much for the

interview.

15

Total cost of event

Mr Konkel, do you have a rough idea of how

many events the Diehl corporation holds every

year?

No, no idea. I know no more about that than I no

about the total costs of these events. But I made

a bet with my boss that we spend around €5 mil-

lion in this company every year.

And what did he say?

"Never!" So I went to the accounts department

and asked them to check the corresponding in-

voices to get some data that was at least reason-

ably useful. But that didn't help me any further.

So I asked my colleagues in our Human Resources

department to have a look and see what events

they had held.

And what happened?

The result was an Excel sheet that was as big as

a sheet of wallpaper and the realisation that we

reach a figure of €1 million in this area alone.

At that, my boss said that I should sort it out.

But that was easier said than done, because even

after a comprehensive market screening process,

we found nothing that would have really made us

happy – not a single provider worked with online

availabilities, and some of them made my toes

curl. So initially I just let the matter rest again.

It was only a year later, when a colleague from

the personnel department came to me and com-

plained about our participant management and

participant administration that I set out to find a

solution for this problem at the very least. And

that was when we came across one company, but

unfortunately its proposal was much too over-

sized for our purposes.

And that was that for the moment once again?

Not quite. A few days later, a man from Meetago

called on me and asked why we weren't actually

his customers yet. And as we continued to talk,

it turned out that participant management is not

just integrated into the Meetago MICE solution,

but that this participant management is addi-

tionally based on the respective company's own

technology.

And then the matter was settled?

Almost. We said that we would pilot our most

important event right now – the annual meeting

of the 260 people in the extended management

team, who were coming from around the world

– and if that worked, then we would roll out Mee-

tago.

Pretty brave.

I did have a few gripes in the pit of my stom-

ach. But the entire organisation of all aspects of

the meeting went absolutely perfectly and now

the HR heads in all our sub-groups want to get

Meetago too. For all further training, training

courses, seminars, conventions... In short: We are

starting with the group-wide rollout now, and in

six months I will likely know better whether my

€5 million was right. Then we will have complete

transparency for the first time.

I'm sure that Meetago did not win you over be-

cause of its participant management alone, or be-

cause the tool operates with online availabilities.

What was it exactly that convinced you?

Up to now, we always had to transfer our offer

results painstakingly into an Excel sheet in order

to be able to compare them at all. But that never

really worked. Even if individual chains, like for

example Accor, had standardised the way they

draw up an offer within the chain, different of-

fers came in time and again, because an addition-

al €6.50 was charged for Wi-Fi here and €5.00

TEXT: ANKE PEDERSEN

Grab that black box!For a long time, Andreas Konkel wouldn’t go near the topic

of “events” – the maze that had grown up over the years

at the Diehl group seemed to him to be too impenetrable.

At least up to now. Using Meetago, he now believes that

he holds the tools in his hands to shed light on the murky

area of expenditure in record time. Group-wide.

TRAVEL MANAGEMENT

16

extra for water there, and so on. Not to mention

the offers from the various individual hotels.

In contrast, Meetago is a procurement tool that

prepares the offers for me in the way that I

want them, and most importantly, in a way that

makes them comparable. Because the system

defines clearly what is included in the delegate

rate. Above and beyond this, and this is my pet

topic, the bookings are carried out based on my

T&Cs. In short, Meetago in my opinion is the most

advanced and: It is user-friendly. We have now

already begun to send queries for 2017 to the

hotel industry. But they start whining about: "So

here you come now with yet another tool!"

Is another tool really so bad?

Of course, the hotel industry is afraid of losing

the direct contact with the guest if conference

booking is taking a cue from room booking and

now being done via a portal. Above and beyond

this, the question of commission pops up time

and again too. But seriously: A reasonable com-

mission as an agency fee is completely accept-

able, after all. And when individual chains then

start to argue that they could

save the portal costs if we

booked with them directly, I

could just simply hit the roof.

Because that is not actually

true: They have distribution

costs without portals too.

That means that, in the end,

we corporates actually pay the

costs anyway.

To conclude, here's a totally different ques-

tion: Could you also imagine using instant book-

ing?

Apart from the fact that I initially thought this

was a new type of coffee: That is absolutely the

right way. It will come, and then it will be just

awesome.

Thank you very much for the interview, Mr Kon-

kel.

Andreas Konkel,

Diehl: "Offers that

are by nature

comparable."

Best practice

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The style of the speech is typically Asian:

tending towards shyness, quiet and ex-

tremely polite. But the message – that is

aimed at the world: "We want to be a re-

spected leader in the world," is the explanation

given by representatives of the South Korean air-

line Korean Air at the presentation of their new

Business class in late autumn 2015 at Frankfurt

Airport. A business class that is so generously pro-

portioned and extravagant, that every Middle East

carrier would be envious, and after investigat-

ing it, there would not be the tiniest doubt: They

mean business!

And it is not just South Korea's national carrier

that is aiming for world leadership. The ambition

to take over leadership is also germinating un-

der the surface in corporations like LG, Samsung,

Kia or Hyundai – in some sectors of technolo-

gy, they have even done it already. It may be be-

cause of the Asian reserve that this has occurred

largely unnoticed. Effectively, however, less than

30 years after the country became a democra-

cy in 1987, the South Koreans have managed to

rise to become the seventh largest export nation

in the world. The foundations of Korea's econom-

ic miracle lie as far back as the 1960s and 1970s,

and since the turn of the millennium, the econo-

my has been growing at an average rate of 5 per-

cent per year.

Within the region, however, the Koreans tend to

be regarded more as the Italians of Asia: It is not

just in business that the guiding principle here is

TEXT: ANKE PEDERSEN · PHOTOS: JUN MICHAEL PARK

Rapid ascentIn the 1960s and 1970s, the Republic of Korea in

the south of the Korean Peninsula was considered to

be one of the poorest regions in the world. Not any

more! Almost unnoticed, the Asian Tiger worked its

way up into the league of the world's leading econo-

mies and export nations.

Top meeting destination:"Conferences" and "Exhibitions" (COEX building) in clear sight.

BUSINESS TRAVEL

18

"Balli! Balli!" (Hurry, hurry!). When it comes to vir-

tues like precision, reliability and diligence, how-

ever, they tend to be pretty much on a par with

the Germans, and indeed may have passed them

out already: Berlin is spreading itself too thinly in

major projects like the airport? Not in South Ko-

rea! If the aim is to have the city's new landmark,

the Lotte World Tower shopping, office and hotel

complex, to open on 2 December 2016, then it

will open its doors on 2 December. And that's that!

By the way: The Koreans actually worship the

Germans to such an extent that even Goethe has

already become part of daily life. When he was

searching for a name for his new hotel company

in 1973, the founder, General Chairman Kyuk-ho

Shin, decided on a homage to Charlotte, known

as the heroine in Goethe's "The Sorrows of Young

Werther". The name of what is today Korea's larg-

est hotel chain: Lotte Hotels.

Its declared goal, to become established as a

"global hotel brand" with 50 hotels, has already

caused the daughter of the multinational Lotte

Group conglomerate to back up the words with

deeds: Under the umbrella of Leading Hotels,

she opened her first hotel outside Asia in Mos-

"Seoul is the hitherto undiscovered Capital of Cool."

19

Seoul

cow in 2010, to be followed by the takeover of

the renowned luxury hotel The New York Pal-

ace on Madison Avenue in 2015. In contrast,

Lotte's competitor inside Korea, Shilla Hotels,

which was established by the founder of Sam-

sung, concentrates only on the domestic market

for the present.

Capital of Cool

The fact that Seoul is gaining in appeal as a busi-

ness travel destination is not solely down to its

status as the country's political, economic and fi-

nancial centre or to the fact that the lion's share of

export goods like cars, ships, electronics, mobile

phones and steel are manufactured here. Within

Asia, South Korea is considered to be a trendset-

ter, according to Lubosh Barta, General Manager

at the Four Seasons, but Seoul is "the hitherto

undiscovered Capital of Cool."

Nevertheless: The city, in whose metropolitan

area a good half of South Korea's population of

50 million live, is not just totally safe. "Seoul is

cosmopolitan, sophisticated and technology-driv-

en, and the highly educated young people are ori-

ented heavily towards the West," Barta reveals.

Above and beyond that, the city has also mean-

while become famous worldwide for its Korean

pop, its independent designer scene, particularly

in the trendy Gangnam district, as well as, very

importantly, the excellent Korean cuisine.

"That is undoubtedly the main attraction," Lu-

bosh Barta laughs. And the announcement from

the makers of the Guide Michelin that they would

publish their gourmet bible for Seoul as well from

now on also proves that this appeal has long since

ceased to be limited to national dishes like Kore-

Gangnam style: much-sung business district.

Open to new things: Face-lift in the Cheonggyecheon

district.

Hot stuff: Seoul's cuisine is fresh

and modern.

20

an barbecue or bibimbap – a dish of rice, various

types of vegetable, beef and a fried or raw egg.

Admittedly, the business traveller will not really

need the culinary guide. The density of both ex-

cellent as well as affordable restaurants in Seoul

is almost as high as that of the coffee shops that

dispense the national hot drink every few me-

ters. This applies at least to the northern part of

the metropolis, which is divided by the Hangang

River: a district characterised by streets as wide

as boulevards, where the next temple or palace is

also only a stone's throw away.

In contrast, in the southern part of Seoul, skyscrap-

ers and commercial buildings dominate, as well as

Seoul's Event and Convention Centre and the con-

ference hotel industry. The hip district of Gangnam

is the exception here, with its tree-lined, winding

shopping and party streets reminding the visitor

more of Berlin or New York than an Asian mil-

lion-strong metropolis. However, when it comes

to opening hours – daily till 10 pm – Seoul is defi-

nitely bound 100 percent to its Asian tradition.

"Seoul is a shopping paradise," says Ritz-Carlton

General Manager Radu Cernia, "and the people are

very proud of it."

International hotel chains raising

hopes of higher rates

In light of the ongoing growth in its economic pow-

er and actual world dominance in some areas, the

significance of Seoul as a meeting and convention

destination is also increasingly becoming estab-

lished. And if the fast influx of international ho-

tel chains can be used as an indicator of the – not

just – economic rise of a destination, then Seoul

is also currently more than just "hot".

Top 3 business hotels Recommended by Nam Sik Hwang,

Hotel Sales Manager South Korea, HRS

Lotte Hotel Seoul

This five-star hotel run by Korea's largest hotel

company is situated at the heart of the Central

Business District, boasts more than 1,120 rooms,

a duty-free shop and the three-star Michelin res-

taurant Pierre Gagnaire. The Lotte team holds nu-

merous international events and cultural activi-

ties. Single room from €232.

The Shilla Seoul

Also located in the Central Business District, this

Shilla Group hotel combines traditional Korean

aesthetics with the modern comfort of a five-star

hotel. Anyone who would like to shop can do this

in the attached duty-free shopping centre or can

take one of the free shuttles to one of the shop-

ping districts like Myeongdong, Dongdaemun or

Gangnam. Single room from €241.

Hotel Peyto Samseong

This charming three-star boutique hotel is situat-

ed in Gangnam and only five minutes' walk away

from the closest subway station. Its 163 rooms of-

fer a panoramic view over the city; being a certi-

fied "Green Hotel", it is also committed to sustain-

ability. Single room from €109.

World Design Capital 2010: shimmering legacy of star

architect Zaha Hadid

21

Seoul

After the turn of the millennium, chains like Marri-

ott, Hyatt and Hilton had already begun to succes-

sively mark their territory with luxury brands like

JW Marriott, Ritz-Carlton, Park Hyatt and Grand

Hyatt, as well as Conrad (2012). Even Banyan Tree

has been here since 2010, and Marriott launched

a representative of its Autograph Collection at the

beginning of 2015 as well. Since autumn 2015,

however, Four Seasons has now also been holding

court in the pulsating district that centres around

the Deoksugung Temple with a 300-room hotel,

and this new addition is firing hopes in the sector

for rate levels that are at least approaching those

of of international metropolises like London, To-

kyo and other Asian capitals.

Admittedly, the Asian Tiger is still a long way away

from that. On the contrary: When it comes to price,

Seoul tends to be in the lower mid-range cate-

gory. There is a reason why consulting firm JLL

quotes the CEO of hotel operator Leo Mond from

Aju Hotels and Resorts in its South Korea report.

He hopes that the opening of new international

luxury hotels like the Four Seasons will contribute

to pushing up prices at the top end of the market.

These hopes are being supported by the growth

which is also being driven by international hotel

chains in the mid-range and budget segments as

well. In the past year alone, international brands

like Ibis Styles, Holiday Inn Express, Four Points by

Sheraton and Best Western have all opened new

hotels. For 2016, a Hyatt Place and the Courtyard

Seoul Namdaemun are in the works.

JLL’s Hotels & Hospitality Group has also deter-

mined the 2018 Winter Olympics as a key driv-

er for the growing hotel spectrum in South Korea.

Particularly the rising demand on the part of the

fast-growing middle classes in China, Southeast

Asia and India are providing sustained growth in

the tourism and hotel sector, he says.

Domestic hotel chains are benefiting in no small

way from this too. Thus the opening of the Lotte

World Tower in December can be considered to

be a type of statement: At 555 metres high, the

Lotte Tower will be the highest building in Asia.

Not quite top of the world – but still.

When it comes to price, Seoul tends to be in the lower mid-range category.

Two worlds:Traditional meets modern:

22

BUSINESS TRAVEL

Facts & Figures

EconomySouth Korea's good direct connections

reflect its position as an important ex-

porting country. The Republic of Korea

is ranked in seventh place among the

major exporting nations and in twelfth

place among the world's largest econ-

omies. Seventy-five global Korean

brands export high-tech products, in-

cluding Samsung, Hyundai, Kia and LG.

Travelling to SeoulThe international Incheon Airport is the main gateway to the

southern peninsula between the Sea of Japan and the Yellow Sea.

It is served not just by the national carrier Korean Air, which offers

daily 10-hour non-stop flights from Frankfurt (7:40 pm/12:55 pm),

but also by Asiana Airlines (7:00 pm/12:20 pm) and Lufthansa

(5:45 pm/11:00 am). In addition, Lufthansa also offers daily di-

rect flights from Munich (4:05 pm/9:30 am). Business travellers

from Germany do not need a visa.

Hotel prices 1st Half 2016Ø per night €123

Black-out datesAfter Christmas, the Harvest Festival

(14–16/9/2016; 3.–5/10/2017) is the

second most important public holiday in

the country. In 2017, the festivities will

coincide with Korea's National Founda-

tion Day (3 October), and each year on

9 October – Hangeul Day – Koreans cel-

ebrate the emergence of their alphabet.

Although the 2018 Winter Olympics (9–

25/2) and Paralympics (9/–18/3) will

be held in Pyeongchang, which lies 130

kilometres to the west of the capital, ex-

perience shows that the prices for trav-

el and accommodation tend to rise rap-

idly during this period.

Travelling in SeoulTravellers need to budget for around an hour for the trip from

Incheon International Airport to downtown Seoul. The non-stop

trip to "Seoul Station" on the AREX express train which runs all

day costs the equivalent of €6.50 (8,000 won) per journey. A sec-

ond train stops at every station along the way and costs around

€3.50 (4,250 won).

In addition, there are bus connections to all the major districts in

Seoul. These take between 60 and 90 minutes and cost between

€4.00 and €12.00 (5,000 to 15,000 won) depending on the length

of the journey.

An alternative which is affordable outside peak hours and is defi-

nitely the most convenient mode of transport inside the region of

25 million inhabitants is the taxi. Depending on the hotel destina-

tion, the trip from the airport costs hardly much more than €30

to €45. Almost all accept payment by credit card. More and more

Koreans speak English. Anyone who wants to make doubly sure

should order a taxi bearing the sign "international". These are a

little more expensive, but still affordable.

The underground network in Seoul is multi-branched, modern,

clean and safe in equal measure. Tickets priced from €1.00 up-

wards are available at the corresponding machines, all of which

also display a menu in English. Local travel information is provid-

ed by the "iTour Seoul App".

Seoul

Hotel business growing through the roof:Lotte World Tower

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TRAVEL MANAGEMENT

The floating- rate trapKeeping track of the fragmented hotel market is indeed

no easy task. However, when it comes to determining

the best rate models for your own particular company,

then the number of aspects that need to be taken into

consideration rises exponentially.

TEXT: HRS

Neuroscientists proved it long ago: If a person sees they are go-

ing to get a bargain, their brain is flooded with endorphins, or

"happy hormones". Whether that works with travel managers

too remains to be seen. However, the immense growth in the

range of "dynamic rates", "chain-wide discounts" and "floating rates" be-

ing offered by the hotel chain segment shows that it seems to be worth

a try. These offers tempt the travel manager to get a reward of a certain

discount on the daily rate for each booking – at least in all the hotels

under their umbrella – and that initially sounds incredibly appealing.

But are discounts like this really a silver bullet for savings without

time-consuming negotiations? Do travel managers use these discounts?

And if they do use them, then how? HRS wanted to find out more about

this and conducted interviews on this subject with travel managers in

ten internationally operating companies. The result: The dynamic rates

in three different areas turned out to be particularly critical:

Budget and planning: Will there still be planning security

after dynamic rates are introduced?

Handling dynamic rates is fundamentally regarded as a balancing act,

because they make planning and budgeting more complicated. If the

demand for rooms rises in a city, for example during a trade fair, this

leads to severe fluctuations in the daily rate in some instances. It is

obvious that a situation like this makes budget planning considerably

more difficult.

That is the reason why most companies are calling for a hybrid approach,

with negotiated fixed rates as a basis and dynamic rates as a supple-

25

Dynamic rates

ment. "We use these rates exclusively outside our top destinations. On

the other hand, in the places where we have the corresponding book-

ing volumes, it is worthwhile for us to have more detailed RFPs," is a

typical statement. However, there is a unanimous call for greater com-

mitment on the part of the hotel industry, for example with regard to

availabilities, as well as a long-term partnership instead of an approach

that is driven purely by supply and demand.

Rates and monitoring: Will it be ensured that the promised

savings will actually be achieved?

Dynamic rates are a discount on a daily rate which companies have

no way of influencing. In addition, even the daily rate is optimised in

such a way by the hotels' revenue management systems that the ho-

tels achieve as high a rate as possible. That means that travel managers

have to look very closely to be able to make a statement with regard

to savings – a disadvantage that is often mentioned: "I have to follow

the ups and downs of the market much more closely than with a fixed

rate – whenever processes become bloated, transparency is lost," is the

conclusion of a Business Travel Management and MICE manager. While

some of the larger corporations have established

measures for real-time rate monitoring, smaller

companies find themselves confronted with great-

er expenditure of time and effort.

Control and ranking: Will my employees

find the best hotel for their trip?

However, it is not just the travel managers them-

selves who lose the plot. Travellers frequently

stumble as well. For example, when a dynamic

rate hotel generally listed in the booking tool as

a "preferred partner" is in a relatively remote lo-

cation, or bookings on certain days are subject to

hefty price fluctuations. This frequently leads to

queries coming from the travellers. That is why

more than half the companies interviewed control their travellers us-

ing the search ranking lists in contract hotels with a fixed rate by giv-

ing these hotels a higher ranking – even in destinations where they

actually use dynamic rates.

If TMCs are involved in the booking, arrangements are made accord-

ingly: "That is a little more complicated. We have to use precise brief-

ings to ensure that both travel agents as well as our own employees

are informed about the limits," one travel manager explains. Others still

adapt their booking tool to such an extent that hotels above a certain

price limit are no longer displayed.

You can download the paper "Room Rates: Floating or Sinking?" that is

based on these interviews on the sourcing page on corporate.hrs.com

(section "Solutions"/"Intelligent Sourcing").

"I have to follow the ups and downs of the market much more closely than with a fixed rate – whenever processes become bloated, transparency is lost."

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TRAVEL MANAGEMENT

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On warm late summer evenings, the air in Kraków's

old town is humming. Students and strollers crowd

into bars, coffee shops and jazz bars. Workers meet

up for an after-work beer, visitors stand and stare.

The pastel-coloured façades, the gently rounded towers

and ornamented gables frame a unique open-air theatre:

Kraków's medieval market square. It is one of the largest

in Europe and has been the heart of the cultural metropolis

since time immemorial.

Like the rest of the country, this thousand-year-old city

with international charisma has gotten into a type of time

accelerator since the collapse of the Soviet Union. After a

somewhat bumpy transition from a command economy to

a market economy, Poland became an EU Member in 2004.

Economic growth has been consistently positive in the past

years, achieving 3.6 percent in 2015.

Kraków is one of the most economically successful cities in

this stable environment. The city owes this solid position

predominantly to the targeted establishment of branches

of international companies like Motorola and Philip Morris.

The tobacco corporation operates offices and factories at

four locations in Poland. Its central production and admin-

istrative headquarters are in Kraków. Carrefour, Tesco and

Ikea were also attracted by Kraków's central location, good

infrastructure and its young population who are both well

educated and highly motivated.

Kraków stands for a centuries-old tradition of encounter

and multinational dialogue. Currently, however, the country

is visibly split under the national conservative governing

party Law and Justice (PiS). Above all, its supporters fear

migration under the banner of the EU. The confederation

of states for its part sees its Polish partner's constitutional

direction endangered, for example by the attempt to replace

politically undesirable constitutional judges.

The conflict between the EU and Poland continues to fester,

but that is not doing any harm to Kraków's popularity: With

8 million visitors a year, the city on the Vistula Poland's

number 1 city break destination. Recently, it has additionally

Poland’s second-largest city is not just exceptionally

beautiful, it is also ambitious. In just a short time,

it developed into a leading meeting destination in

eastern Europe – with an inspiring combination

of historic charm and post-modernist infrastructure.

Secret capital

TEXT: STEFANIE BISPING · PHOTOS: ANNA-KRISTINA BAUER AND ANDREAS GRAF

28

MEETINGS & GROUPS

been establishing itself as a convention location. "Kraków

has probably the best cultural activities in Poland," Bogdan

Wieczorek, a specialist in business travel at Lufthansa City

Center in Warsaw, explains. "Add to this a broad spectrum of

modern hotels and conference facilities that are suitable for

ambitious events and still don't stretch the budget."

Inspiring backdrop: Post-modernism

meets Middle Ages

In 2014, the city invested in several ultra-modern conference

centres simultaneously. €85 million was the sum it forked

out for the ICE Kraków, a conference and event centre with

state-of-the-art technology with a façade designed in wave

form that is reminiscent of the nearby Vistula. Its centrepiece

is an auditorium with 2,100 seats which is also considered

to be one of Poland's best concert halls.

In the same year, it was joined by the International Exhibi-

tion and Convention Centre EXPO Kraków with two halls and

various conference rooms. The third new addition was the

Tauron Arena Kraków, which was launched – also in 2014 – as

Poland's largest sports facility and can seat 15,000 people.

As well as for sporting events and concerts, it is also used for

trade fairs and conventions. Thus this city of 760,000 inhab-

itants created a broad range of facilities for MICE planners

in the shortest possible time.

Further major location advantages include the wealth of

culture and the historical ambience of this old university city.

"The post-modernist New Age cityscape blends with the old

town's historical heritage to create a unique and inspiring

backdrop," says Aneta Ksiazek, a conference specialist at

the Polish Tourist Office. Kraków was one of the few cities

in Poland to survive World War II without any architectural

damage. Because of this, Unesco declared the old town with

its more than 120 churches and 5,000 historical houses a

world heritage site as early as 1978.

Event organisers will find a correspondingly broad choice

of original and historic conference locations – from the

Kraków Opera and Philharmonic auditoriums right up to

Gravitational centre: The market square has been a favourite meeting point since the Middle Ages.

29

MICE location check

Poland: Economic high-flyer

Since Poland joined the EU, its economic development

has been an uninterrupted success story. At 10 percent,

the unemployment rate is relatively low, and growth is

constant. The current PiS government is also investing

in developing tourism, and particularly in the area of

business travel. According to a study conducted by ho-

tel real estate specialists Christie & Co, Poland managed

to increase its supply of hotels by 79 percent since

2005. Kraków, which is currently the most competi-

tive hotel market in Poland after the capital, Warsaw,

reflects this development.

Good team: tradition outside, modern inside.

Box seat overlooking the Vistula: Roof terrace

in the Sheraton Grand.

Eating like the kings once did: Restaurant Wierzynek.

Good neighbourhood: New ICE Centre with hotels close by.

At the top:big, bigger, Tauron.

30

MEETINGS & GROUPS

Et ditatur, quam, utemo molut quodi inturi-bust, omnis ipidel idel min pa perro vel ium et quate sint diationseque porum laciliquisc

Et ditatur, quam, utemo molut quodi inturi-bust, omnis ipidel idel min pa perro vel ium et quate sint diationseque porum laciliquisc

the Wieliczka Salt Mine located outside the city. The salt

chambers with winding tunnels and bizarre salt caverns

are part of the Unesco world heritage site. At the same

time, they have rooms with conference facilities of various

sizes and all communication technology requirements –

underground.

In-between casks filled with wine for purely medicinal pur-

poses, conference participants can debate in the two halls

of the Museum of Pharmacy in the Jagiellonian University

Medical College. And in the Polish Aviation Museum, historic

aircraft provide a backdrop for unusual events.

Expanding range of hotels

The opening of new event locations has also promoted the

development of the hotel industry. Currently, Kraków has

more than 146 hotels with more than 8,000 rooms. After an

initial boost on its selection as "European Capital of Culture"

in 2000, the hotel industry in the city has seen rapid devel-

opment yet again in recent years. Thus it is not just all the

international chains that are represented in Kraków today.

Alongside 10 five-star hotels, a broad range of modern ho-

tels in the three- and four-star category is attracting tourists

and companies from abroad. The fact that the prices in all

categories are significantly lower than those in western Eu-

ropean cities is certainly more than marginally responsible

for their appeal.

In 2014, the Holiday Inn Kraków City Center opened its

doors. Last year, two new additions to the Hilton fleet gave

significant momentum: The four-star hotel Doubletree by

Hilton Hotel & Convention Centre and the three-star hotel

Hampton by Hilton are one single architectural entity, which

expands the city's portfolio by a total of 400 rooms as well

as 20 conference rooms for up to 2,000 people.

And the city has long been able to fulfil the MICE deci-

sion-makers' decisive criterion of accessibility. Lufthansa,

Eurowings and various low-cost carriers fly to Kraków from

several German airports. The city also has intercontinental

connections via Frankfurt and London. Aircraft land 11

kilometres to the west of the city centre in Kraków-Balice.

Most recently, Kraków demonstrated its events competence

in summer 2016 when the city bore the burden of hosting

World Youth Day with an impressive 600,000 participants.

However, the city always functioned as a setting for im-

portant meetings. In the legendary high-class Restaurant

Wierzynek, for example, five kings and nine princes from

across Europe banqueted here already when it opened

back in 1364 – for 20 days. The centuries flew by, and the

Wierzynek continued to attract leading figures, from Fidel

Castro to Charles de Gaulle. The food on the menu today is

still what Poland's monarchs prized back then. Time can be

made to stand still in Kraków too – and sometimes even be

turned back.

"The New Age cityscape blends with the historical old town to create a unique backdrop."

31

MICE location check

Hotels:

01 Doubletree by Hilton

Kraków Hotel & Convention Centre

The new addition in 2015 scores with

3,000 square metres of event area for up

to 2,000 participants, distributed across

16 conference rooms and one ballroom. It

has 232 rooms, an indoor pool, gym and

spa. Architecturally, the hotel and its neigh-

bour Hampton by Hilton form a single en-

tity. The complex is walking distance away

from the Tauron Arena, the Expo trade-fair

centre is also close.

Rooms from €99.

→ Dąbska 5, Kraków

02 Hampton by Hilton

The junior partner in the Hilton complex

has 161 rooms with workstations and er-

gonomic chairs as well as four conference

rooms which can be used flexibly. Business

centre, pool and gym ensure business trav-

ellers want for nothing.

Rooms from €68.

→ Dąbska 5, Kraków

03 Hotel Copernicus

The small, elegant five-star hotel with 29

rooms is located in a medieval city palace.

Roman Polanski and Morgan Freeman, Va-

clav Havel and Helmut Kohl were all guests

here. The library offers space for up to

25 participants as well as a screen, multi-

media projector, flip-chart and Wi-Fi. The

fireplace salon offers room for 25 people to

have an exclusives dinner.

Double room from €180.

→ Kanonicza 16, Kraków

04 Radisson Blu Hotel

This stylish five-star hotel with 196 rooms

and eight conference rooms is located in

the heart of the city. The 400 square me-

tres of event space can be used flexibly.

The in-house meeting specialist provides

assistance in preparing for the event, and

during the event the kitchen's "brain food"

concept lays the foundations for optimum

concentration. Business centre, gym and

two restaurants make life pleasant here.

Rooms from €121.

→ Straszewskiego 17, Kraków

05 Sheraton Grand

Apart from having a premium location on

the banks of the Vistula near the Cathedral,

this five-star hotel offers 232 rooms and

500 square metres of event space. The rooms

are equipped with state-of-the-art technolo-

gy, the conference rooms have audio and vid-

eo equipment, internet access and predom-

inantly have daylight. The lounge-bar and

viewing terrace on the fifth floor are an im-

pressive backdrop for special events. There is

also a pool, sauna and gym.

Rooms from €90.

→ Powiśle 7, Kraków

06 Best Western Efekt Express Hotel

This no-frills four-star business hotel with

179 rooms and six conference rooms offers

conference facilities and catering for up to

600 participants together with the neigh-

bouring Best Western Premier Kraków Ho-

tel. Its location in the north of the city not

far from the airport is convenient.

Rooms from €58.

→ Opolska 14, Kraków

07 Park Inn by Radisson

With 152 rooms and five conference rooms

covering 1,000 square metres this four-star

hotel, which was built in 2009, offers space

for large conferences. In addition, Kraków's

largest foyer can be used for events. In the

gym, guests can work off the gourmet bur-

gers and steaks they had in the "RBG Bar &

Grill" restaurant.

Rooms from €72.

→ Monte Cassino 2, Kraków

08 Andel’s by Vienna House

This four-star design hotel with 159 rooms,

which is situated near the main train sta-

tion, has a business centre and five con-

ference rooms with 400 square metres

of conference space. Four of these can

be connected together and turned into a

hall for 310 participants; additionally, the

149-square-metre foyer is suitable as an

event location. The rooms offer a fresh de-

sign, LCD TV, DVD and CD player.

Rooms from €98.

→ Pawia 3, Kraków

09 Novotel Centrum

Renovated in 2013, this four-star ho-

tel is located opposite Wawel Castle with-

in walking distance of the city centre. With

198 rooms, it is one of the largest hotels in

the city. It also has eight multi-functional

meeting and conference rooms with mod-

ern furnishings on 340 square metres of

event space for up to 180 participants. In-

door pool, sauna, gym and wellness centre

provide opportunities for relaxation.

Rooms from €112.

→ Tadeusza Kościuszki, Kraków

Events & Special Locations

10 ICE Kraków Congress Centre

The international convention centre has

36,000 square metres of event space. Apart

from the Auditorium Hall with space for

2,100 people, there is a Theatre Hall for

600 people, the Chamber Hall for up to

300 participants, a 500-square-metre mul-

ti-purpose room which can be combined with

the Foyer and the Chamber Hall into a larger

room, as well as 32 meeting rooms for 6 to 30

participants respectively.

→ Marii Konopnick-

iej 17, Kraków

www.icekrakow.

com

11 Internation-

al Exhibition and

Convention Cen-

tre Expo Kraków

Two 4,000- and

5,000-square-metre

halls, various seminar and

meeting rooms of different sizes, a foyer and

a restaurant combine to form 13,000 square

metres of event space. Apart from trade

fairs, they are also usable for conferenc-

es, banquets and corporate events. Parking

spaces for 700 cars and good transport con-

nections to the airport and the city centre.

→ Galicyjska 9, Kraków

www.expokrakow.com

12 Tauron Arena Kraków

Poland's largest and most modern sports

arena with 15,000 seats and an area of

5,100 square metres was opened in 2014.

It is the setting for sporting events and con-

certs, but also for trade fairs and corporate

events. Apart from the arena, it also has

two conference rooms, a smaller sports hall

as well as restaurants and bars.

→ Stanisława Lema 7, Kraków

www.tauronarenakrakow.pl

13 Kraków Opera

With 750 seats in the Auditorium with the

main stage, 180 in the Chamber Stage hall

The MICE hotspots in Kraków

32

MEETINGS & GROUPS

and 120 in front of the Rehearsal Stage, the

opera house, which was built in 1954, offers

many stylish backdrops for events. Audiovis-

ual and sound equipment that has been tried

and tested in performances is available, as is

a cabin for simultaneous translation. The mez-

zanine level can be used for banquets with up

to 700 participants, or as an exhibition area.

→ Lubicz 48, Kraków

www.opera.krakow.pl

14 Polish Aviation Museum

What was once a stage on the first Europe-

an airmail route and the site of Poland's first

airport is now home to a collection of more

than 200 aircraft. In addition, the museum of-

fers locations for events with up to 400 par-

ticipants. Event organisers can choose be-

tween the 2,000-square-metre main hangar, a

250-square-metre and a 400-square

metre-large hall as well as the cine-

ma room for 50 people.

→ Jana Pawła II 39, Kraków

www.muzeumlotnictwa.pl

15 "Wieliczka" Salt Mine

Twenty kilometres outside of Kraków, the

salt mine, which has been deemed a Unes-

co world heritage site, offers the possibility

to hold conferencesunderground. It can boast

a hall for up to 600 participants as well

as conference rooms with multi-me-

dia presentation facilities. Over-

night stays in a salt chamber

are popular as incentives. The

neighbouring Grand Sal Hotel

offers further accommodation

and conference facilities.

→ Daniłowicza 10, Wieliczka

www.wieliczka-saltmine.com/

www.grandsal.pl

MICE location check

08

06

07

02

01

04

03 05

14

10

09

12

13

11

15

Places mentioned in the main text

1 Medieval main market square

2 Kraków Philharmonic

3 Museum of Pharmacy

4 Holiday Inn Kraków City

2

3 1

4

33

34

Are you looking for a location that is perfect for your conference or event?

These hotels offer a wide variety and ideal settings – whether for a small

seminar or a major event.

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Rooms: 336 Wi-Fi: included

Conferences: 18 rooms | max. 500 people

Audio-visual conference equipment: available

Location: Centre 6 km | Main Train Station 5 km

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HOLIDAY INN BERLIN CITY-WEST

BERLIN

HOTEL IDINGSHOF

Rooms: 72 Wi-Fi: included

Conferences: 5 rooms | max. 150 people

Audio-visual conference equipment: available

Location: Centre 1,5 km | Main Train Station 3 km

Airport 45 km | Trade Fair - km

BRAMSCHE

TANNENHOF

Rooms: 50 Wi-Fi: included

Conferences: 3 rooms | max. 60 people

Audio-visual conference equipment: available

Location: Centre 3 km | Main Train Station 4 km

Airport 115 km | Trade Fair 7 km

HAIGER

Rooms: 50 Wi-Fi: included

Conferences: 1 room | max. 60 people

Audio-visual conference equipment: available

Location: Centre 15 km | Main Train Station 15 km

Airport 40 km | Trade Fair 5 km

ARCUS-HOTEL

WEISSENFELD

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35

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email us at tagung@hrs.de

Rooms: 253 Wi-Fi: included

Conferences: 10 rooms | max. 500 people

Audio-visual conference equipment: available

Location: Centre 5 km | Main Train Station 5 km

Airport 40 km | Trade Fair 5 km

GRAND HOTEL AMRÂTH KURHAUS

THE HAGUE | SCHEVENINGEN

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Rooms: 250 Wi-Fi: included

Conferences: 9 rooms | max. 600 people

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Location: Centre 3 km | Main Train Station 3 km

Airport 22 km | Trade Fair 3 km

SPLIT

BASRA INTERNATIONAL HOTEL

Rooms: 201 Wi-Fi: excluded

Conferences: 5 rooms | max. 500 people

Audio-visual conference equipment: available

Location: Centre 1 km | Main Train Station 7 km

Airport 20 km | Trade Fair 7 km

AL BASRAH

HOTEL MADERO

Rooms: 197 Wi-Fi: included

Tagungen: 11 rooms | max. 250 people

Audio-visual conference equipment: available

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Airport 32 km | Trade Fair 10 km

BUENOS AIRES

Mr Ragge, the international hotel in-

dustry is currently going through a

unique phase of consolidation. How

will that have an effect on work in the

travel management area?

For a start, the market structure is

changing. A quarter of the overall mar-

ket consists of chains, and that is pre-

cisely where the consolidation is in

full swing. So that apparently means

an increase in the market power of in-

dividual providers within this quarter.

In light of the high sums of money that

are being invested in these takeovers,

we can expect that costs will be cut

and synergies spurred on. On the one

hand. On the other hand, chains will

attempt to increase their turnover in

certain markets.

However, in order to be able to in-

crease the average daily rate, you

need to have a certain degree of mar-

ket power. Looking at the most recent

example, Marriott-Starwood, howev-

er, we have calculated that their mar-

ket power in major cities like Tokyo,

Shanghai, Paris, London is only a lit-

tle over 1 percent, so they are not

the driving force there. Unlike in cit-

ies like New York City, where the Mar-

riott-Starwood market share is around

10 percent and therefore of a size

that can be used to move the mar-

ket. In short: In cities with short sup-

ply and high demand, the effects will

be perceptible. From a worldwide per-

spective, the buyer will remain in the

stronger position.

The development in the hotel market

presents dangers and opportunities. It

also always depends on how flexible a

The acquisitions of recent months have been concentrated particularly in the hotel chain segment.

This did not just increase the clout that participating players can exert over travel management

in negotiations. In light of the record figures achieved in these deals, experts are forecasting a rise

in accommodation costs and at the same time a decrease in services in the near future. What is

the best way to react to this? An interview with HRS CEO Tobias Ragge.

Expand your hunting ground!

INTERVIEW: RAINER PUSTER

Illu

stra

tion: K

irst

en S

em

mle

r | V

ect

or

data

: A

dobe S

tock

• P

hoto

: Corn

elis

Gollhard

t

36

CHECK-OUT

company is with its hotel programme.

If I rely strongly on the dynamic rates

propagated by the chains, for example,

that also means that I have to expect

significantly higher rates in high sea-

son – like we are familiar with in the

leisure segment as well.

Do you expect that the progressive

consolidation will increase interest in

the private hotel segment?

Of course, outside the US market, in-

dependent hotels have long been part

of the day-to-day reality of business.

In Latin America, Europe and in Asia,

independent hotels dominate the mar-

ket, accounting for 80 or 90 percent.

However, whether this large majority

of the market is taken into consider-

ation by companies in their hotel pro-

gramme depends a lot on who is doing

the sourcing. Frequently, TMCs or con-

sultancy firms only speak with a few

of the big players to achieve high cov-

erage and reduce their own workload.

In doing that, however, they limit their

perspective from the outset, since an

individual hotel of identical or bet-

ter quality at a better rate would not

be taken into account in this instance.

There is a risk here that the employee

will potentially search for accommo-

dation outside the prescribed channels

because what the company has to offer

does not meet his requirements.

What strategy do you recommend to

travel managers?

Expand your hunting ground! Get the

entire market in your sights, instead of

concentrating on a quarter of it! Don't

put your trust in promises, but rath-

er base your decisions on comprehen-

sive benchmark data! And remember

that chains, unlike the individual hotel

industry, fundamentally calculate in a

fee of 10 to 15 percent on average to

cover the cost of their brand distribu-

tion! Thus an individual hotel can pro-

vide identical or better quality at lower

costs – a benefit for travel management

and for the traveller.

Particularly the international chains

are currently undertaking great efforts

to increase their share of direct book-

ings.

We are dealing with an industry here

that operates using an asset-light mod-

el. Today, no one owns their own real

estate any more. The owner and his em-

ployees in the hotel take care of busi-

ness operations, thus all that is left is

distribution. In order to be part of a

chain, the owner has to hand over up

to 50 percent of his turnover to this

chain. But if the majority of his book-

ings come from an OTA whose trans-

actions he has to pay for: What value

has this sort of distribution through the

chain any more then? Today's book-

ing behaviour is putting a big question

mark over the chains' business model,

that is why they are now running their

direct booking campaigns.

Looking at companies, yet another is-

sue can be seen: Business travellers and

companies are mindful of efficiency –

savings of a few euro are of little use if

an employee first has to invest a lot of

work time in research, price compari-

sons and booking. Travel management

cannot fulfil its obligations, for exam-

ple duty of care, if the whereabouts

of the employee are not known in the

event of an emergency. And after the

business trip too, travellers lose a lot of

time on a direct booking, because man-

ual travel expense reports are needed.

So with a direct booking, the compa-

ny loses control and transparency, ad-

ditionally weakens its own negotiating

position and forces its employees to

grapple with inefficient processes. For

these reasons it will be the innovative

end-to-end solutions that prevail among

travellers and in travel management.

Tobias Ragge: Savings potential in the

individual hotel business.

Hotel market

37

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Friday 8 a.m.–7 p.m., Saturday 9 a.m.–2 p.m.

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Phone +49 221 2077-5980

Christian.Temath@HRS.de

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Christopher Hecht

Phone +49 221 2077-1175

Christopher.Hecht@HRS.de

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Oliver May

Phone +49 221 2077-1076

Oliver.May@HRS.de

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• What are the assessments of travel managers

in international companies?

WHICH RATE IS WORTHWHILE FOR WHICH CUSTOMERS.

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