The contract will give holidaymakers access to 3,000 city and beach properties from two- to five-star.
Lowcostbeds.com recently implemented tour operating platform iVector, which was crucial to the beds provider winning the contract.
Jet2holidays managing Richard Bodin said lowcostbeds had been selected after a detailed review of all the major providers within the industry.
Bodin also cited factors such as lowcostbeds’s accommodation range, customer service and financial stability as reasons for the partnership. It is believed the contract is exclusive for an agreed period of time.
On Holiday Group was previously a supplier to Jet2 but the five-year contract was suddenly terminated last month.
Lowcost Travel Group director Lawrence Hunt also confirmed the company is on the verge of two deals but could not give timescales for completion.
“They are fairly imminent. We’re looking to diversify and use the strength we have built as a bedbank to acquire other businesses.”
Hunt added that the company saw no value in acquiring another bedbank despite much press speculation in recent weeks.