After two blockbuster deals, change was to be expected. If travel agents end up getting more choice and better technology, they won’t have much to get upset about.
Since buying up rivals GTA and Tourico Holidays, accommodation wholesaler Hotelbeds Group has been busy working out exactly how to operate the new enlarged business.
Combining three companies into one was always going to result in changes and Hotelbeds has now decided to cut down on the number of brands it uses in its retail travel agency operation.
The company on Monday announced it would gradually phase out the TravelBound, TravelCube and GTA brands with travel agents, migrating to the Bedsonline platform.
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The change only relates to the company’s retail travel agency business, such as travel agents with physical stores. Hotelbeds also supplies accommodation and other ancillaries to online travel agencies, tour operators and airlines.
“We’ve done a lot of work behind the scenes in terms of preparing the ground, unifying teams. And now it’s time to start transferring all these benefits to the customers,” said Carlos Muñoz, managing director of the bedbank division at Hotelbeds.
Perhaps surprisingly retail travel agents still make up a sizeable part of the company’s $7 billion annual sales. Hotelbeds does business with around 50,000 across the world.
The brand consolidation will happen in stages, starting today with the French and Middle East markets. Full migration of all markets globally will continue over the coming six months.
Muñoz has promised that the changes will lead to agents having access to more properties (170,000, up from 55,000) as well as a better technology platform.
Tours and Activities Focus
Hotelbeds is what is known as a wholesaler or bedbank: a company that supplies product—in this case room, transfers, tours, etc—to other businesses rather than direct to the consumer.
In recent years Hotelbeds has not only added scale through acquisitions it has also sought to expand its product portfolio, growing in areas like theatre tickets and bus tours. Margins in the wholesale accommodation sector can be pretty measly and it is easier to make money if you are big and can offer different types of travel products.
Moreover, Muñoz believes adding more ancillaries will help traditional travel agents better compete with their online rivals.
“It is still an area which is not so easy for travel agents to find a reliable access to the bookings or to the supplier,” Muñoz said.
Packaging up products gives traditional retail travel agents more choice when going toe-to-toe with the likes of Expedia.
“From this perspective we are supporting the retail travel agencies providing them with an offering that helps them to compete in the market place and to gain the volumes, the bookings,” Muñoz said.