WTM 2017: Expanded Hotelbeds now alternative to ‘unhealthy’ OTA hotel partnerships

Product integration means GTA, Tourico Holidays and Hotelbeds offer 170,000 unique properties Continue reading →

The new global bedbank giant formed by the coming together of GTA, Tourico Holidays and Hotelbeds offers an alternative to “unhealthy” OTA relationships, it was claimed.

Last week at WTM, the three wholesalers exhibited together for the first time since Hotelbeds bought its two rivals and were given regulatory approval for the deals to go ahead.

The firm revealed that the integration of product means that the number of unique properties now offered by Hotelbeds is 170,000, up from 120,000 before the buyouts.

Speaking to Travolution at WTM, Carlos Munoz, bedbank managing director at Hotelbeds Group, said the expanded portfolio and distribution offered opportunities for its hotel and trade clients.

“For suppliers over time in the last few years they have built a dependency on the big OTAs in the market. At times its 60%, 70%, 80% of volumes. This is unhealthy.

“We feel we provide a real opportunity with strong distribution to deliver. Our market share is still small but we are a reliable distribution alternative to the big boys.”

Munoz said work to integrate the three brands on Hotelbeds’ technology would now accelerate. “The integration is about creating value for the market,” he said.

“It’s about the quality of the contracting. This will help our customers compete in the marketplace, especially with the big OTAs.”

Munoz described the B2B hotel distribution sector as still “extremely fragmented” with too many players vying for business and he expects to see further consolidation.

“If you look at the Global Village [zone] at WTM, it’s dominated by bedbanks. I think the space is very crowded, extremely fragmented.

“It’s a market in which you need significant investment, particularly in technology to be able to keep up with state-of-the-art tech.

“But the market is maturing. In the past it was shifting from offline to online, now there is consolidation in the B2B segment as there is with Expedia and Booking.com.”

Along with the 170,000 hotels, Hotelbeds confirmed the number of clients connected to its platforms is now up to 7,000.

It’s IT now handles one billion search requests per day with peaks of up to 1.5 billion. Munoz said this volume of activity means speed is a key priority.

“We have always been ahead in the market in terms of speed,” he said, “because we have invested a lot on this and also moving to the cloud.

“Most of our services now hosted in the cloud which gives us the capacity to deal with billions of requests.”

Munoz said the trend towards agents cutting out suppliers by contracting their own product could be a risky strategy.

He said putting resource into this could see them take their eyes off the ball in terms of understanding their customers and optimising conversion.

“To be good at everything is just not possible. If you focus some of your resources on sourcing product you will not doubt naturally lose focus on understanding consumer behaviour.

“In the future all travel firms will be reliant on use of data, algorithms and understanding the consumer to optimise conversions.

“The more you focus on contracting the less you focus on the data and someone else who is focusing on that will capture more of your customers.

“These players who are trying to do both, to me, it’s a mistake. Players fully focused in distribution and using data are extremely successful and growing and delivering volumes.

“The ones trying to be on top of everything have more steady growth. The challenge for players competing with Expedia and Booking.com is they are focused on consumer behaviour.”

Munoz described trading this year as successful but said questions marks remain around 2018 with optimism in the UK lower than a few years ago due to the uncertainties associated with Brexit.

“Let’s see how the market reacts,” he said. “The economy is not doing badly.”