Cash & Liquidity Management

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Digital Transformation at NH Hotel Group: Checking in to the Future of Treasury NH Hotel Group have centralised the group’s liquidity at local and global level, creating a market-leading solution in the hospitality sector. We find out more about their collaborative, award-winning transformation project, which was undertaken in partnership with their banking partner, BNP Paribas.

Digital Transformation at NH Hotel Group: Checking in to the Future of Treasury

Digital Transformation at NH Hotel Group: Checking in to the Future of Treasury 

By Eleanor Hill, Editor

 

Spanish-based hotel group, NH Hotel Group, was operating a manual, decentralised treasury structure, which was hampering cash visibility and control. Here, Luis Martínez Jurado, SVP Financing & Treasury, NH Hotel Group and Máximo Sanz, Senior Cash Management Executive, BNP Paribas, explain how they collaborated to deliver an impressive digital transformation for the group, resulting in an automated, fully centralised treasury – and one of the most global and innovative treasury management solutions in the hospitality marketplace today.

 

Luis Martínez Jurado
Luis Martínez Jurado


Every treasurer dreams of complete cash visibility and control, but often the nature of the legacy treasury structure makes this difficult to achieve without a significant overhaul. This was precisely the situation facing NH Hotel Group. 

“Before we implemented the digital transformation project with BNP Paribas, we were operating four treasury centres in Europe: Madrid, Amsterdam, Berlin and Milan,” notes Martinez Jurado. “We had more than 1,500 bank accounts across those treasury centres, and with no treasury management system (TMS) in place, we were using the proprietary banking platforms of every bank we had accounts with. Not only to issue payments, but also to download statements and keep track of transactions. This was a highly manual process with low cash visibility and a number of obvious process inefficiencies. Ultimately, this translated into high operational risk – which was unacceptable.”  

So, with the support of BNP Paribas, NH Hotel Group embarked on an ambitious project to manage and control the treasury needs of five European countries (France, Belgium, Netherlands, Luxembourg and Italy) – from a single European treasury centre in Madrid. “As well as centralising treasury operations in Madrid, we wanted to achieve full automation of all of our bank transactions via a TMS and implement SWIFTNet as our main e-banking channel,” he explains. 

In addition, NH Hotel Group was keen to “achieve optimal control on their liquidity, so worked with BNP Paribas to implement an international cash pooling solution to centralise their balances,” says Sanz – who worked closely with NH Hotel Group throughout the project. 

 

Máximo Sanz
Máximo Sanz


Picking the right partner

For Martinez Jurado, choosing BNP Paribas to collaborate on this award-winning treasury transformation was a simple decision. “When you decide to launch a project like this, you need to have the right banking partner on board. Previously, we were working with numerous local banks in different countries. This was not only inefficient, but their product offerings and digital capabilities did not necessarily match up to our ambitions. 

“So, we needed a banking partner with a focus across our main markets in Europe. The bank also needed to offer platforms with full connectivity to our TMS, as well as having international cash pooling expertise. We already had a very good relationship with the BNP Paribas team in Madrid – the team is highly committed on all fronts and understands the business well, so for us, they were the obvious choice.”

With the TMS vendor (Kyriba) and BNP Paribas now selected, it was time to get under way with the project. Given its ambitious, international scope, it was clear that a well-defined plan would be needed. As such, the project was divided into four pillars:

  1. Full integration of the TMS 
  2. SWIFTNet implementation
  3. Transaction banking automation
  4. International cash pooling

“Having this plan in place meant that the project could be addressed from different angles, with multiple tasks being worked on simultaneously, to help NH Hotel Group achieve the highest level of efficiency on the execution of the numerous processes involved,” notes BNP Paribas’ Sanz.


Delivering digital 

Over the course of three years, the four pillars have been worked on consistently – and the project was successfully completed in February 2018. The results speak for themselves (see Box 1).

 

Box 1 - Project achievements: benefits for treasury

With a cutting-edge cash management solution now in place, NH Hotel Group’s corporate treasury has:

  • Enhanced visibility and control over group cash
  • End-to-end transaction automation  
  • Rationalised bank accounts – a reduction with more than 33% from 1,500 accounts to fewer than 1,000 all over the Group (including Latam)
  • Detailed reporting
  • Real-time information
  • Simplified reconciliation
  • Improved cash forecasting
  • Reduced idle cash balances
  • Reduced operating expenses
  • Lowered overall working capital requirements
  • Improved account payable and receivables 
  • Reduced funding costs
  • Maximised funds for investment

All of this has led to a significant reduction in operational risk, which was one of the overarching aims of the digital transformation process.

  

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