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  • digital transformation

Digital transformation award: NH Hotels

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by Mariel Barclay

Published: November 14th 2018

Four years ago the treasury operation of NH Hotels was hamstrung by paperwork and poor visibility, while customer experience needed improvement. Now, the team has transformed both beyond recognition. Mariel Barclay reports.

“The story of NH is a story of continuous transformation, says Luis Martinez Jurado, the Group’s senior vice president of Treasury & Financing. “The hospitality business might seem simple. You check in, you go to the room you have a shower, you have dinner, you go to sleep and then you check out.  What is behind each stage though? How many people are working behind the scenes to guarantee a smooth transaction? How do you apply digital transformation to that?”

Luis Martinez Jurado, NH Hotels

At first sight, a corporate treasury department seems a long way away from the front end of the hotel business. Yet the insights of treasury into processes, payments and automation would prove essential, as Jurado explains.

“When you arrive at a hotel , your first customer experience is  the check in process. This is not always easy and neither is check out.  There are queues, it can take a long time and invoicing can be complex, especially if you are a corporate client” Jurado says.

“With treasury we have created a platform that enhances customer experience. We’ve brought technology to the front and back office of the hotel, outsourcing all those functions that don’t bring real value to our company or to our guests. Hospitality is all about customer experience and by implementing online check in and check out we have managed to substantially improve that”.

Recession spurred innovation

But how did treasury bring this about? With 60,000 rooms spread across 30 countries, there was already plenty to keep NH Hotels busy. But then came the last recession, causing earnings to plunge and forcing the company to examine costs.

“Obviously it is important to travel back in time to the crisis of 2008-102, Jurado explains. “We’re talking about a company that went down from EBITDA of €200m to €100m. At that moment the company needed to make decisions, to become more efficient”

NH Hotel Group´s treasurer could not sleep soundly while treasury was decentralised, processes were not standardised and the company had 1500 accounts in 60 banks around the world. These were managed from eight treasury centres, two of which were in Madrid and three or four in Latin America

This meant the Spanish hospitality group, the 6th largest hotel company in Europe, had no cash visibility, many operations were done manually, reporting was poor and there was little support for decision making.  Risks were high.

“My dream was to get to the office,  get my cash position at the push of a button and know where the cash flow was for that day,  as well as in the past and in the future”, Jurado says.  “Now we have achieved that and we have a 100% digital solution on the front of our hotels and back office.”

Fernando Cebada, NH Hotels
Getting closer to the business, and closer to the customer

Rationalising treasury and bank relations was key to achieving cash visibility, efficiency and control.  The company embarked on a 5 year plan that involved standardising processes, reducing the number of accounts and bank partners, setting up an ERP and TMS to fully automate treasury operations and establishing cash pools with core banks to optimise liquidity management.  Achieving all this allowed treasury to create a centre of excellence to provide services to all European entities.

Housekeeping done, day to day treasury operations ceased to be a concern.  The question was what to do next, where to go from there.  For treasury, it was clear that getting closer to the business meant getting closer to the customer. The hotel business is all about customer experience and a lot of this plays out during check in and check out.  “So we have invested a lot of money and a lot of love in that process” says Fernando Cebada, Corporate Treasury Director.

If customers have used a credit card they can check in through an app and even chose their room like they do with a plane seat.  When the time to check out comes, there is no paper under the room door.  “We have implemented an intelligent payment platform that requires no manual intervention which means that the full transaction is integrated”, Cebada adds.  “We have become real partners to the business and at the moment we are spending lots of time with the e-commerce and marketing teams. This is an example of how you can make a real boring function come to be perceived as creating value”