Tui Travel-owned trade supplier Hotelbeds will increase IT spending by 43% over the next five years as it looks to make its platform more flexible and responsive to market demands.
The Majorca-based provider, which came into the Tui group due to the merger with First Choice in 2007, will mark 10 years in business at trade show WTM this week by emerging from the shadows.
Although one of the biggest beds providers in the market Hotelbeds has had a distinctly lower profile than some of its smaller rivals in recent years in what is a highly competitive market.
Carlos Munoz, managing director of Hotelbeds, said: “Over the last 10 years we have been building to what we are now and we feel we have now become a global company and market leading within our industry.
“It’s the right time to communicate this to the trade. Our clients will help us to grow our business in the future and so this is the right time to share our plans.”
Among Hotelbeds’ targets set out in a five year plan are an 18% increase in staff, a 40% increase in sales and marketing spend and a push into new destinations like South America and Asia.
Munoz said the accompanying 43% increase in IT expenditure was necessary to ensure that Hotelbeds stayed ahead of rivals.
“The sector is evolving very quickly. We need to make sure that we have a platform which is state of the art,” he said. “Developing capabilities around connectivities with clients and suppliers will be one of the key areas and having a platform that is flexible and quickly adaptable to the changing needs of the market.
“Today everything happens in real time and we have to make sure we have cutting edge technology and do not slip. We are market leaders and people look to us and in some cases recreate what we have already done.
“We have to provide everything in real time. If there is a new offer we have to be able to put it into the marketplace as quickly as possible and to do that technology plays a crucial role.”
Hotelbeds claims to be outgrowing the accommodation market having seen a 25% increase in room night sold to 14 million, up from 11 million in 2010, compared to overall sector growth of 8%.
The provider offers its trade customers a white label solution or the ability to use its XML feeds and in the UK works with the likes of Hays Travel, Travel Republic, On The Beach and Jet2.
Munoz said he thought there was a need for some consolidation in the bed bank sector, but only among the many small to medium sized companies.
He said, being a large player, Hotelbeds will be able to find its own growth. “Our plan is to grow organically. We are in a very nice position to enhance what we do through our own developments,” said Munoz.
One of the few occasions Hotelbeds has been in the news in recent years was when it lost £1 million due to the collapse of The Unpackaged Group, the parent of Seligo, much to the annoyance of Tui bosses.
This highlighted the issue of overseas suppliers often being left out of pocket when UK firms collapse as unsecured creditors while other UK-based creditors enjoy some form of protection.
Hotelbeds said it has worked hard to develop relationships with credible trade partners and that failures have not significantly impacted its business.
Munoz said: “Hotelbeds has not been significantly impacted by business failures. It has strong credit controls in place which has reduced its exposure to these risks. At the same time these controls have not inhibited the growth and development of the business.”