In the middle of spring, CDS Groupe announced the acquisition of the “travel” branch of Rydoo. What are the reasons for this acquisition?
Ziad Minkara – When Rydoo Travel & Expense decided to separate from its travel part to stay focused on the expense, we entered into discussions, both convinced that we could create leaders in business travel, each in its business segment. CDS wanted to become the number one operator in France, which became the case in 2020, just before the pandemic. From there, the ambition was to develop ourselves in Europe, the problems on the main European markets resembling those we are experiencing in France. Indeed, all major accounts listed on the equivalent of the CAC are eligible for the establishment of a direct hotel booking platform. As for the large ETIs, they concentrate their hotel expenses with their partner agencies, with whom we wish to develop. The “travel” branch of Rydoo, with customers in Switzerland, Italy, Benelux and the United Kingdom, an R&D team based in Poland, immediately gave us this European dimension.
Developing in Europe and increasing distribution to travel agencies, are these the main objectives of this takeover?
ZM- In Spain, Italy or England, travel agencies are looking for an online booking tool independent of TMC, GDS or expense tools. The market is waiting for this type of agnostic solutions. Rydoo Travel, which we have just renamed Goelett, will be completely independent of CDS. For its part, CDS will remain the direct reference hotel booking tool for companies while distributing its content to travel agencies, whatever their online booking tool. Including, of course, that of Goelett.
Concretely, what new possibilities will you offer to travel agencies?
ZM- With the acquisition of Rydoo Travel, which works with Havas Voyages, Voyage Expert or FCM, in addition to CDS’s partnership with Selectour, for example, we have this coverage of agencies on a human scale that need technology and services. Our goal is to provide European travel agencies with the technology tobe competitive with new entrants such as Tripactions, Travel Perk, or Egencia, recently acquired by American Express. We will continue to invest so that agencies have an integrated online booking tool, a hotel booking tool and a payment tool. And this, so that they can win calls for tenders against leading TMCs and offer the best to their customers.
Our goal is to provide European travel agencies with the technology to be competitive with new entrants
The acquisition of Rydoo Travel’s online booking tool also shows the weaknesses of the online booking tools model?
ZM- An online booking tool, due to its economic model, with a very low cost per transaction, cannot be viable on its own. This is why Neo, from KDS, leaned on a TMC like American Express GBT, Cytric on a GDS like Amadeus, Concur on an expense tool like SAP. Similarly, Rydoo Travel is now supported by a hotel booking tool such as CDS. While CWT or BCD do not have their own online booking tool, the market is asking for solutions, because there are not many left available.
With the takeover of Rydoo Travel and, now, the launch of Goelett, your group’s place in the business travel ecosystem is all the stronger.
ZM- Our strategy is to be at the heart of business travel distribution. We don’t just offer content, as has been described, but a complete service to our corporate customers and to travel agencies. A service that includes hotel sourcing, integration into online booking tools, reporting and payment methods. We also felt from 2020 that this aspect was going to become essential. This is why we have accelerated the in-house development of CDS Smart Pay in order toinclude payment methods in our solutions. And this, with a technology that we own, without the obligation to look elsewhere, as Saber or HRS have recently done. At the same time, we have invested in digital and distribution to offer new solutions to travel agencies.
What are the next steps after the unveiling of Goelett?
ZM- The last quarter of 2022 will be devoted to the integration of CDS and Goelett to offer this online booking tool, first in Southern Europe, then in the United Kingdom, then in Germanic countries. In an increasingly complex market, our axis of development is to work on simplicity : simplicity of the interface, simplicity of use for the traveler, simplicity of implementation for corporate customers and integration with agencies.
In 20 years of existence, this is the strongest return that CDS has known in terms of flows, both on large accounts, ETIs and agency activity
In parallel with this takeover, how do you see the evolution of the business hotel industry?
ZM- For me, it emerges stronger from the crisis. The last summer season was very good, with the return of foreign leisure customers, especially Americans boosted by a strong dollar. But business travel has also restarted very strongly. ETIs have started again with renewed vigor and large groups, apart from internal and intercontinental meetings, are returning as before the crisis. We have talked a lot about “essential travel”, I believe that business travel is still essential to business growth.
Despite the pessimistic estimates of a full recovery in the sector, do you seem rather optimistic?
ZM- In 20 years of existence, it is the strongest return CDS has ever seen in terms of flows, both for large accounts, medium-sized companies and agency activity. In the last days of August, we already had as many orders for the month of September as last year for the whole month. Without September having even started and with a 20% increase in the average basket! It is considerable, in any case in France and on the heart of our business, that is to say business travel oriented on the mid-range.
However, this recovery is also marked by room prices well above 2019 levels. Will this rate growth continue?
ZM- With high occupancy rates, prices have logically increased according to demand. Unfortunately, today we have this accelerating factor linked to the geopolitical and energy crisis. Its impact has repercussions on the hotel industry, firstly through the high cost of energy, but also, in the face of inflation, through an increase in salaries. All this means that today, we are on a price increase close to 20% in France, a price surge which can also be seen in the United Kingdom or in Spain.
In this context of crisis, isn’t this a brake on business travel in the months to come?
ZM- It’s obvious. Already because the energy crisis will slow down the economy, since we are talking about a recession. And, consequently, fewer professional trips in the long term. Especially since we should also consume less and therefore travel less, especially by plane. In this context, like a large part of the train + hotel CDS business, the combination that emerged victorious from the crisis, we should be less impacted. In the end, we learned to live with recurring crises. Our customers now have agile tools and can adapt their travel policy in real time. It is a strength.
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From Rydoo Travel to Goelett: interview with Ziad Minkara (CDS Groupe)