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Hotels need to work harder than ever to maximise their revenue. It is often important that they consider and pursue a diverse distribution strategy.
Bed banks became popular with large hotel chains with lots of rooms to sell, but they are now an important distribution strategy for small and midsized properties looking to widen their marketing reach and maximise occupancy.
In this article we will explain what bed banks are, how they work, and how they could help you.
What are bed banks?
A bed bank is a wholesaler that operates a B2B hotel distribution marketplace by contracting rooms and other travel services from accommodation providers so that they can sell them to travel sellers in need of inventory.
In this way, bed banks can offer accommodation only or packages that include accommodation, transportation, meals, and activities.
The bed banks sell the inventory to businesses in the travel industry. These businesses are also known as “resellers.”
They include travel operators who will sell it on to tour guests, airlines who will sell it on to their passengers, travel agencies who will sell it on to their customers and organisers of large-scale events such as festivals, stadium concerts, conventions or conferences who will sell it on to the attendees.
In this way bed banks are an intermediary, where the end customer (the guest) is often unlikely to know that a bed bank has been involved in the process.
How do bed banks work?
Bed banks used to advertise their inventory in large, printed brochures. Today, the bed banks rely upon marketplaces and their own branded websites and social media platforms to promote their inventory.
Here they will feature their partner properties and other products along with photographs and descriptions of the location, services, amenities, and availability.
In practice, whilst most bed banks operate slightly differently, they all follow a similar operational model.
Each Bed bank has a target market of businesses that they are looking to supply either with accommodation only or accommodation packages that also include additional services such as transportation, meals, and activities.
Some bed banks cover broad geographical regions and a wide target market. Others specialise in a specific region or travel partner, and they may even have specific type of suppliers that they work with such as high-end independents or boutique hotels.
Bed banks live or die by their suppliers' quality and the rates they can offer.
So, they tend to choose them carefully and negotiate hard, agreeing to pay a net rate or a discount off advertised rates. The supplier will then sign a direct contract allowing the bed bank to promote and sell its products to other travel businesses.
The bed bank will then advertise the supplier’s inventory. Availability and prices are controlled using a feed that links to the supplier’s property management system (PMS) or channel manager.
This means that rates and availability can be updated in real-time, preventing overbookings, lost room sales and frustrated customers. It also means that when reservations are booked, the bed bank can pass real-time reservation details such as dates, guest names and email addresses back to the suppliers, so that they have everything they need to process the reservation their end.
From this point on, whether the guest is treated like a standard guest and receives things like pre-arrival contact information from the accommodation provider, will depend upon what the bed bank and supplier have agreed.
What are the latest trends in bed banks?
Bed banks first appeared in the early 2000s, advertising their inventory using large, printed brochures and processed bookings using email and XL sheets.
How times have changed. Now, they manage inventory availability with live feeds through their supplier’s PMS systems using APIs.
Rate parity is a hot topic among hotels and wholesalers. Bed bank suppliers such as hotels have found their own rooms available on relatively unknown OTAs for a lower rate than on any other public channel, only to realise that the original source was a bed bank.
It has become easier for hotels to check this because of channels such as Tripadvisor and Trivago. The supplier’s response has been to tighten the terms and conditions of the contract with the bed bank to ensure that the discounted rate that they enjoy is not passed on to an end guest.
Afterall, the bed bank model relies upon two commissions going on top of the supplier’s rate so that the bed bank and the reseller can make a profit from selling them.
What are the benefits of using a bed bank?
Competing against OTAs and the direct channel, bed banks have several benefits to them. Let’s explore these now.
- Distribution – Bed banks offer a significant new customer stream that the accommodation provider would be unlikely to access if they didn’t sign up to a bed bank. Yet, as we are about to discuss, guests accessed through bed banks can often prove to be at least as valuable, if not, more so than customers obtained through OTAs or even the direct channel.
- Efficiency – The bed bank is the main point of contact for suppliers. This negates the need to establish and maintain relationships with a multitude of companies. Plus, the bed banks offer a high volume, low hassle channel, meaning that you are less likely to need to work with smaller, low volume channels.
- High-value reservations – The accommodation provider will agree to sell their rooms to a bed bank who will add a margin before the B2B buyer adds a margin. This process relies upon the seller (accommodation provider) to agree to a low average daily rate (ADR), meaning that they are receiving less revenue per available room (RevPAR) from these customers.
However, Whilst the ADR might not be as high as other channels, bed bank reservations typically have longer lengths of stay, longer booking windows, and lower cancellation rates. This means that the cost of stay of a bed bank reservation, may be lower than more transient guests who book direct and stay for one night. - Higher occupancy – Using bed banks to sell even a fraction of your inventory, means that you effectively shrink the size of your property, leaving you with less rooms to sell through other channels. Although bed banks are likely to reduce your ADR, they will help increase your occupancy and get you closer to achieving your RevPAR goals.
- Marketing power and reach – For no effort on the accommodation provider’s part, bed banks provide significant exposure to potential new guests worldwide through a network of travel operators, airlines, travel agencies and other resellers.
- Low to no resources required from sales and marketing – Whilst bed banks require no significant internal effort, they also require no financial investment, freeing up marketing funds for activities that can drive direct business.
- Reliable payments – Because they are businesses selling to businesses, bed banks carry a much lower risk of non-payment, compared to the B2C market. In contrast, there is a risk with OTA customers who can use fraudulent credit cards.
What are the most important bed banks?
If you are interested in exploring the option of partnering with a bed bank, then a good place to start would be by conducting some desktop research to identify those bed banks that work with your type of property and operate in your destination.
Then, when you have some high-level understanding, you can compare notes with other operators in your network to hear their bed bank insights and recommendations.
The bed bank sector is a constantly changing landscape as key players acquire, merge, re-brand and expand.
This list of the largest wholesalers takes us around the world:
With over one million hotels and apartments in 70,000 destinations worldwide, Turkey-based HotelsPro has enormous reach with a wide range of inventory from budget motels to luxury resorts.
Launched in 2013, Web Beds is a relative newcomer. Listed on the Australian stock exchange they employ over 2,000 people speaking over fifty languages in over 120 cities across the world.
With inventory in Europe and Asia Pacific, it is quickly expanding around the world and has over 500,000 hotels and over 23,000 ground services in more than 39,000 locations. They source their inventory through a combination of direct contracts with hotels and chains and partnerships with over sixty-five connectivity providers.
3. Hotelbeds
Part of the HBX Group, Hotelbeds operate a network of over 300,000 properties in over 5,000 destinations across 195 countries. They have a reputation for being a tech-first business that offers integrations with many channel managers. Their wide-ranging inventory includes resorts, boutique hotels, homes and villas, BNB’s, and hostels. In 2017 they acquired two competitors: GTA and Tourico.
4. GRNconnect
Indian travel company Aman Travels owns and operates GRNconnect. They enjoy a strong presence in Europe and the Middle East and are growing connections in Asia and the Americas. Their inventory includes over 300,000 hotels across the globe along with the ability to book transfers and other sightseeing tours.
Spanish based Restel Hotels operate a distribution platform for hotel accommodation and tourist services that includes 200,000 hotels spread over five continents.
6. Yalago
A relative newcomer, Yalago is part of Dubai, UAE-based Emirates Group and was launched in 2017. Their network of over 13,000 hotels focuses on destinations in the Middle East, the Indian Ocean, Southeast Asia, the Mediterranean, Florida, and the Caribbean.
Although they are scaling their operations globally, Las Vegas based Bonotel have made a name for themselves supplying luxury North American inventory. They have a network of high-end hotels and resorts in the US, the Caribbean, and Mexico.
8. Travco
Founded in 1979, Travco are a privately owned corporation. Specialising in the luxury end of the market, they have established themselves in Egypt, the UAE, Greece, Jordan, and Tunisia with over sixty hotels and cruises spanning across Egypt and the Middle East.
When you are ready to speak to a bed bank, here are some good questions to ask:
- What types of properties do you offer, and which are the highest performing in my area?
- What resellers do you work with and who are likely to be interested in booking with us?
- Based on your experience, what type of volume would you expect us to receive during each of the key seasons?
- What statistics can you give me to indicate the likely booking patterns (number of days, season, etc) coming from your customer base?
- What are your net rate requirements?
- Are there any additional fees that you charge, such as credit card processing?
- What are your payment terms?
- What is your policy when it comes to advertising net rates publicly?
- What PMS or channel manager integrations do you offer?
Final thoughts
Bed banks remain a vital tool for hotels looking to expand their reach, improve occupancy, and secure reliable revenue streams. While the model may have shifted from printed brochures to API-driven real-time distribution, the core principle remains the same: connecting accommodations with the right travel partners to fill rooms efficiently.
For hoteliers, success in the bed bank space comes down to careful selection, strong partnerships, and a robust technology infrastructure.
This is where an integrated approach to hospitality technology makes all the difference. A Property Management System (PMS) that syncs with distribution partners, a streamlined Payment solution, and a clear revenue strategy ensure that every channel—whether direct, OTA, or bed bank—contributes to long-term profitability.
At its core, hospitality is about delivering great experiences. By leveraging the right tools and partners, hotels can maintain control over their pricing, guest relationships, and brand reputation—while still tapping into the distribution power of bed banks.
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