It’s been a whirlwind 12 months for Hotelbeds, as the wholesaler wraps up integratng Tourico Holidays and GTA with Hotelbeds Group. The acquisitions in 2017 gave the Palma de Mallorca, Spain-based company considerable leverage. The company is now the leader in the business-to-business bedbank market, with a network of 60,000 travel-buying intermediaries, including travel agencies, tour operators, and airlines, in over 140 markets.
Hosting its first conference since the integration, the Hotelbeds annual Markethub Americas was held last week at Grand Palladium Costa Mujeres Resort in Mexico, showcasing its new look and brand identity to more than 500 industry leaders attending the event.
This year’s theme was “Shifting Futures,” exploring the changes in the travel sector and how the industry can prepare for the future.
While the travel and tourism sector has had massive growth, outperforming the world economy for eight consecutive years, US RevPAR is beginning to stagger. In 2018, RevPAR was at 2.8%; 2019 is expected to dip to 2.3%; and 2020 may decrease further to 1.9%.
While he admitted his prediction was gloomy, Sam Turner, wholesale sales and sourcing director at Hotelbeds, discussed how the industry can overcome an overall slowdown and other disruptions in the industry.
“How do you differentiate your business model against the larger online players? Are you really clear on what makes you different, because I think that’s going to be more and more relevant the further we get into difficult times,” he said during his session.
One of Hotelbeds’ core strategies going forward, Turner said, will be to tackle the distribution of rates in a far more sustainable way, through the Best Rate Guarantee program, offering substantially lower hotel rates in both leisure and urban destinations.
“It’s what really differentiates us from the competition and what helps travel agents compete with the OTAs,” Matias Elisavetsky, regional director of sourcing Americas, at Hotelbeds, said in speaking with Travel Market Report. “We’re seven times larger than the next bedbank, and that really gives us the leverage and the scale to bring this product to travel agents,” which will help them make more margins and give them a very competitive product.
Elisavetsky is responsible for 330 contractors with main offices in Orlando, Manhattan, Los Angeles, and Toronto; along with people on the ground in New Orleans, Washington, and Denver. He oversaw the company’s recent announcement, of 43,000 uniquely contracted hotels in the Americas region, including North, Central and South America, making up nearly one quarter of the bedbank’s global portfolio of 180,000 hotels. The signing of significant strategic hotelier partnerships during the last year has helped to grow the number of hotels in the Americas by nearly 14%. Its top destinations in the region are New York, Orlando, Las Vegas, Cancun and Miami.
Global Marketing & Communications Director Gareth Matthews was the conference's MC.
New booking system helps sell ancillary products
The merger also introduced an integrated online booking system, Bedsonline, with triple the amount of hotel inventory and travel ancillaries, including 24,000 transfers and 18,000 activities. “The trips are all about that, it’s all about the activities. The room can be great but people really want to explore, and it’s a very easy way to expand profitability,” Elisavetsky said.
Turner said this is something everyone should take advantage of in the future to increase profitability when hotel rates dip. “We still see many customers not taking advantage of that. I think one of the key things when you consider the cost of acquisition, whether your cost is online acquisition or offline acquisition, the cost of acquiring customers is ‘X.’
“If you can sell an incremental service that really is, in some cases, doubling the profit you make on the business — because you got the margin and cost of acquisition, and you add a little bit of incremental ancillary on top and you can effectively double the margin for booking — and that, for me, is the secret there, and we should be doing more of that. You see some of the larger players doing more of that, as well.”
The enhanced functionality of the new booking system has 20 filters available, allowing travel agents to easily refine searches based on the clients’ requirements. The search tool can be used for hotels, destinations, and places of interest. The company is currently working with Amazon Web Services to transition to an open-source, cloud-based IT infrastructure.
The platform allows advisors to modify bookings, handle complaints, and add special requests; and provides access to eBooks, videos, webinars, events and fam trips, as well as useful templates and tools. There is also 24/7 customer service with nine call center hubs with around 400 customer support agents, and the company has plans to introduce live chat and call back solutions.