"Other companies might take this from 0 to 1, but HeyTrip does it from 0.5 to 1."

The name HeyTrip might ring a bell for many, but its founder and CEO, Huang Lihuan, has been immersed in the travel and hospitality industry for nearly 20 years. He has a deep foundation in the hotel distribution sector, and now HeyTrip has successfully amassed resources of over 1 million hotels worldwide, covering more than 80 countries/regions, and achieving annual sales of more than 12 million room nights. In an interview with Hotel Experts, Huang mentioned that, based on a solid foundation in the B2B hotel distribution field, HeyTrip launched its business travel services at the end of 2023, making significant strides in bridging hotels with TMCs.

Discussing the reasons for stepping out of the business comfort zone at this time, Huang believes that although the business travel market in China has matured, pain points still exist in collaborations between hotels and TMCs. Moreover, HeyTrip's capabilities can meet the customized needs of TMCs serving corporate clients and also find new distribution channels for hotels."

Trillion-Dollar Business Travel Blue Ocean: Numerous Participants, Low Concentration

The resurgence of the business travel sector is evident to the naked eye. A report by the Global Business Travel Association (GBTA) indicates that global business travel spending is expected to reach $1.4 trillion in 2024, surpassing the levels of 2019, with spending approaching $1.8 trillion by 2027; meanwhile, China's travel expenditure made a strong comeback in 2023, with annual travel spending possibly reaching $360.7 billion, a 39% increase year-over-year.

Transportation and accommodation are the two major expenses in corporate travel. For TMCs, connecting more products means stronger competitiveness; for hotels, connecting with more TMCs means more stable sources of customers and revenue. According to an article published on the official website of Shiji, corporate business revenue can account for as much as 60%-80% of some hotel groups' earnings. Therefore, expanding corporate clients and TMCs is one of the most important and core tasks for hotel groups.

However, facing the vast blue ocean of business travel, hotels and TMCs still encounter significant pain points in integration.

Currently, both China's hotel industry and the travel sector are characterized by "numerous participants and low concentration." Regarding hotels, the "2023 China Hotel Industry Development Report" notes that by the end of 2022, there were over 430,000 lodging facilities in mainland China, with non-chain hotels accounting for more than 60%. On the TMC side, according to data released by Ctrip Business Travel in 2021, the domestic travel management market's CR4 (market share of the top four companies) just exceeded 20%, but in developed countries in Europe and America, this figure has long surpassed 50%. Therefore, direct interaction between the two inevitably faces huge time, manpower, and technological costs.

Meanwhile, the current inventory of Chinese hotels is almost centrally controlled by OTAs, who preserve a selective distribution strategy that also results in significant distribution maintenance costs for hotels. At the same time, OTAs, by launching business travel projects and investing in hotel B2B, further concentrate customer channels, which makes hotels deeply concerned.

Under the threat of OTA traffic, hotel groups have higher expectations for effective, independent B2B distribution channels.

Huang Lihuan revealed that currently, only a few leading hotel groups and top TMCs can achieve direct technical connections. However, in the context of cost reduction and efficiency enhancement, most TMCs do not set up their own direct procurement teams; the specific demands and complex contracting conditions of different TMCs make the cooperation process cumbersome. Therefore, hotels urgently need a more efficient way of cooperation to simplify processes, enhance cooperation efficiency, and ensure smooth collaboration with multiple TMCs.

In this context, seeking efficient, professional external partners to supplement their own service capabilities has become an inevitable choice for many hotels and TMCs.

"HeyTrip has declined venture capital investment over the past decade and has maintained its role as an independent third party, providing hotels with both an independent and diverse path of cooperation. What HeyTrip aims to do is to help hotels and TMCs navigate the trillion-dollar business travel blue ocean, ensuring an efficient journey," said Huang Lihuan.

Direct Procurement Strength: Building a Global Intelligent Data Platform for Customized Services

In December 2023, HeyTrip officially launched its business travel program and established an 800 square meter dedicated office at its headquarters in Guangzhou, investing over 100 million yuan to create a hotel resource pool beyond OTAs.

This initiative marks an important step for HeyTrip in integrating hotel resources and meeting the needs of TMC clients, demonstrating its commitment to expansion and development in the business travel sector.

Indeed, being a connector between hotels and TMCs is not new, and it's not easy for newcomers to excel, but HeyTrip, through deep insight into needs, helps more hotels find breakthroughs in cooperating with TMCs.

Huang Lihuan observed that domestic business travel is mainly concentrated in first and second-tier cities, and most TMCs only have business hotel resources in core travel destinations of their corporate clients. However, facing the widespread and fragmented travel needs of small and medium-sized enterprises, traditional procurement methods are inadequate. For instance, a business executive who frequently travels to Guangzhou suddenly needs to go to Huizhou and wishes to stay within a budget at a hot spring hotel, which places high demands on the TMC's custom procurement capabilities.

Huang also noted that post-pandemic, many TMCs adjusted their procurement strategies, reducing investments in the procurement process and avoiding time-consuming and labor-intensive tasks. Additionally, the hotel resources available in the market have become more limited, with only a few OTAs able to offer inventory that meets demands.

Therefore, HeyTrip has strengthened the capabilities of its nearly 200-person direct procurement team to effectively integrate upstream travel resources. Currently, HeyTrip focuses on directly procuring two main categories of hotel resources: domestic and international hotel chains and regional chains and individual characteristic hotels.

The top chain hotels guarantee quality and wide coverage, providing necessary protection for TMC corporate travel groups, with an expected 100% coverage. Huang pointed out that although the direct channels of top chain hotel groups are strong and can interface directly with TMC enterprises, HeyTrip can provide better quality and stable distribution channels, especially helping large hotel groups integrate and establish cooperation with small and medium-sized TMCs, optimizing channel customer source configuration.

Focusing on expanding regional chain hotels and distinctive individual hotels demonstrates HeyTrip's competitiveness in connecting regional chain hotels and its value in providing differentiated services for enterprises. To meet specific needs of TMC clients, HeyTrip customizes and selects hotel resources. According to the head of HeyTrip's business travel department, HeyTrip has established cooperative relationships with several major TMCs and can procure directedly according to TMC requirements, meeting their differentiated customer needs.

Notably, the global intelligent data platform built by HeyTrip provides strong support for efficiently matching the diverse products of hotels and the dispersed personalized needs of TMCs.

Reportedly, HeyTrip's global intelligent data platform integrates hotel resources worldwide and uses advanced IT and big data technologies for data cleaning, organization, and matching. The platform pushes data to downstream channels via API interfaces, ensuring the integrity and timeliness of hotel inventory data, offering clients more efficient and precise services.

Furthermore, to meet the high service standards of business travel clients, HeyTrip has built its own multilingual customer service team supporting 7x24 customer service, ensuring high confirmation rates and low rejection rates, enhancing the experience for both hotels and TMCs.

Becoming Old Friends with Time: Mastering One Track to its Depths

Over the past decade, as the OTA landscape has been reshaped and the window for travel startups has closed, the hotel B2B field has also undergone revolutionary changes. Only businesses that truly create value for the upstream and downstream can survive. Established in 2007, HeyTrip also experienced the difficult climb from zero to one, facing a fragmented industry, immature technology, and scarce demand. In the four and a half years before 2012, HeyTrip's arduous goal was to "break ten thousand room nights per month."

Had HeyTrip chosen to give up or pivot at that time, today’s story would be different. However, Huang Lihuan chose to "become old friends with time." As the travel startup boom arrived in 2014 along with the awakening of mass tourism demand, hotel B2B began to enter a period of development opportunity. HeyTrip broke through in 2014, and in the following five years, the company's performance exploded, growing by more than 100 times at its peak.

During the pandemic, many hotel B2Bs closed due to triangular debt issues, but HeyTrip not only survived the pandemic but also went against the trend to layout international direct procurement. Huang Lihuan revealed that over ten years of deep cultivation in the domestic market and experience in domestic direct procurement laid a very good foundation for HeyTrip to carry out direct procurement overseas, enabling it to flourish globally.

In 2023, HeyTrip officially announced a brand upgrade to "HeyTrip" and pushed further into the international market. "In the future, in addition to powering international direct procurement and helping hotels integrate fragmented channels beyond OTAs, HeyTrip Business Travel will also sell Chinese hotels to the world, bringing incremental guest sources to hotels," said Huang Lihuan.

Mastering one track to its depths is fundamentally where HeyTrip's long preparation pays off.

After sixteen years of deep cultivation in the hotel industry, HeyTrip expanded its business scope in 2023 to include car and air ticket services. Currently, HeyTrip possesses resources of over 300,000 domestic hotels, 700,000 international hotels, and 68,000 direct procurement hotel resources, and continues to expand its downstream distribution channels. This dual thrust reflects HeyTrip's role as a connector in the travel industry, closely linking upstream travel resources and broadly connecting downstream industry partners to help hotels diversify their guest sources.

Today, facing the dispersed backdrop of the hotel and TMC markets, HeyTrip has seized unique opportunities with its accumulated experience and technical advantages. With substantial resources both domestically and internationally in hotel resources and distribution, as China continues to open its borders for inbound and outbound travel over the next two or three years, HeyTrip is poised to enter a new phase of development.