The role of the travel intermediary has been around for almost 180 years. The term “travel intermediary” was coined after travel group impresario Thomas Cook guided his first excursion of 485 people to a campaign in Leicestershire and charged them each a shilling for the journey and his guidance. He then followed this campaign by creating hotel coupons to secure fixed rate accommodation prices in selected hotels.
When we fast-forward to the present day, the role of a bed bank is inherently similar. Also, travel intermediaries or brokers, bed banks provide a seamless, convenient service for both hoteliers and travel providers, albeit these days benefiting from technological advancements and blockchain engineering.
What Are Bed Banks?
Bed banks are specialized B2B online accommodation wholesalers that contract bulk supply directly from hotels, accommodation partners and 3rd parties at fixed, discounted rates. When the rooms are secured, the bed bank resells them onto other businesses including travel agencies, OTA’s, tour operators, and airlines, who then market them to their own bank of clients.
Hoteliers rely on bed banks to build relationships on their behalf with travel providers that can actively promote and sell their products. Travel providers, on the other hand, rely on the bed bank to supply an online portfolio of hotel inventory with availability, text and visuals which is both accurate and updated in real-time.
In short, a bed bank can create and add value to both sides of the business, enhancing quality, connectivity, convenience, service and profit while also expanding global marketing reach.
Some of the world’s most recognizable bed banks include Hotelbeds, W2M, WebBeds, GRNConnect, Restel, Jumbo tours, Escalabeds, Hoteldo, Welcomebeds, Getaroom, Expedia, Agoda, Dida Travel, Viajes Abreu, Goglobal, Tailorbeds, Smyrooms, Nuitee, Yalago and luxury US inbound tour operator and wholesale distributor Bonotel.
How does a Bed Bank Work?
The foundation of any bed bank is connectivity. The hospitality industry and its distribution methods are complex and trying to connect all aspects together, from managing the hotel’s data to distributing inventory to travel providers require a skilled workforce with knowledge of big data. So what kind of travel products can you buy from a bedbank?
The inventory offered by bed banks can include all types of accommodations ranging from hotel rooms, apartments, villas and even hostel beds and there are also additional products such as airline and event tickets, insurances and foreign exchange services.
These are the main distribution channels for a bedbank:
- B2B tour operators for example: TravTravel, Miki Travel
- Global Distribution Systems (GDS) eg. Sabre, Amadeus, Galilieo
- Destination Management Companies (DMCs) or Organisations (DMOs)
- Bedbanks including Hotelbeds, Bonotel, WebBeds, Travco etc.
A bed bank develops its content by managing a property’s data, accessed via direct links to the hotels own system then distributing this information either to travel agencies, OTA’s and tour operators to provide accurate availability, rates and inventory in real-time.
Let’s take Hotelbeds as an example. Hotelbeds is the world’s leading bed bank, providing approximately 180,000 hotels to travel providers, across 185 global destinations through high-value distribution channels that are all updated in real-time.
HotelBeds use the HotelConnect API (Application Programming Interface) to link their bed bank to the hotel’s Channel Manager. This allows them to access guest room, location and date availability across the hotel brand.
Travel agencies, OTA’s and airlines use a slightly different process. They don’t connect to the hotel directly, but instead connect to HotelBeds’ own system. Their APItude suite of RESTful APIs is designed to relay the information they receive from the hotel and in addition it may offer agents ancillary packages such as airport transfers or excursions.
This method was designed to make the booking process faster and more intuitive, so that both parties on the supply and demand side only have one point of contact – the bed bank.
How to Choose the Right Bed Bank
The priority is to seek out a bed bank with a good solid reputation. Research if the bed bank has a great track record and consistent customer feedback over many years. If they have direct contracts with brand name hotels and can provide a large inventory with fast, easy to access data, they may be a good partner.
There’s also market segment to consider. Which bed bank serves your customer demographic the best? Do they offer ancillary services such as airport transfers, excursions, golf tee times or event and VIP experiences?
Choose a company with flawless connectivity and a system with fast speeds and good security so you don’t find yourself losing revenue due to missing data and overbookings.
Advantages of Using Bed Banks
There are several advantages to using bed banks and wholesalers. They create value to both hoteliers and travel providers by improving access, quality, service and profit margins.
Benefits for the Hotelier:
- Gain revenue on previously unsold accommodations through one point of contact.
- Easier connectivity and simplified process with faster transactions and instant confirmation.
- Communication and marketing costs are minimised.
- Expand global marketing reach while growing revenue and increasing sales.
Benefits for the Travel Provider:
- Gain access to more rooms and ancillary services across a larger geographical area.
- Easy search functions via location, keywords, hotel name and amenities.
- Faster booking confirmation – one convenient central system.
- Enhance operational outcomes while growing revenue and increasing sales.
When to Use One
If you are thinking about using a bed bank, you should consider how it can fulfill your needs as a business. If you operate multiple hotels in locations around the world and are struggling to fill capacity, then signing a contract with a reputable bed bank that can sell your rooms through online channels to OTA’s will work for you.
They can help you off-load vacant rooms throughout the year, and even though the wholesalers are purchasing available rooms at a discounted rate, you can still make up the deficit by promoting additional services during the guests’ stay.
When Not to Use One
Smaller, independent travel agencies and tour operators with one or two branches won’t find using a bed bank beneficial. They don’t need access to the capacity of information and real-time data that a larger OTA or travel agency chain would require.
Also if a travel provider focuses solely on a niche market in a specific country and has direct relationships with boutique hotels over a number of years, using a bed bank won’t really benefit their business.
Bed banks are really designed to assist larger OTAs, travel agencies and airlines that sell thousands of holidays and rooms worldwide daily and need up-to-date information.
If you would like to learn more about which bed bank is right for you, our wholesalers and bed banks list for 2022 may help.
Sources of information:
Source: Travelopro.com – 5/10/2020/no author
Source: Hospitality.net – Max Starkov – 23/09/2020
Source: Syncoservices.com – Feb 1st 2021, Alina Ostahi
Source: Altexsoft.com – 25/11/2019
(source: Altexsoft, no date)
(source: Wikipedia/no date/author)
(Hotelbeds.com – 1/12/2021, Palma, Majorca)