And More Trend Bytes from a Panel of Top Receptive Tour Operators … On the surface, the dizzying pace of acquisitions in the tour operator-bedbank segment of the tour and travel industry this year does not seem to phase key U.S. receptive tour operators. This is probably because, underneath the surface, it really doesn’t.
(The world’s largest bedbank, Hotelbeds—itself acquired from TUI in late April of last year—announced this past February that it had acquired Orlando-based Tourico, the number two bedbank/tour operator in the world. Then, last month, Hotelbeds announced that it had purchased UK-based GTA, the third-largest bedbank.)
“It could go either way for us,” responded Jennifer Workman, regional director of contracting, East Coast, New World Travel, when asked during a panel discussion which took place at NAJ’s RTO Summit last week in New York what impact the recent series of acquisitions would have on the business of New World Travel, a receptive tour operator subsidiary of Frankfurt-based DER Touristik, one of Germany’s top three tour operators by market share. Germany generates about 80 percent of New World Travel’s business.
“Who knows? It might get them to ‘come out’,” added Workman, indicating in not-so-subtle terms that the bedbank, with its automatic service fees charged to operators, conduct their B2B business with the same add-ons and service fees that online travel agencies (OTAs) charge consumers.
And, for the future, there seems to be no way around Hotelbeds, which proudly boasts on its website that it is “The World’s Bedbank,” operating in 125 countries and offering products from 180 countries. The number of its hotel partners—the company put it at 120,000 prior to GTA acquisition—is probably in the neighborhood of at least 150,000.
Reacting to the question in similar tone was Ester Roth, senior group manager for AlliedTPro, who said that the consolidation in the bedbank sector “wouldn’t have much effect,” and Pabs Raghava, president of Tours Limited—headquartered near Atlanta and whose key market is India—who told the Summit that it” would not have a great impact on our market.”
But What about Consolidation in the Hotel Sector? Panelists struck a different tone when it came to the matter of the impact on the tour and travel industry of consolidation among hotels, an activity that seemed to reach its apogee last September when Marriott International made a $13 billion acquisition of Starwood Hotels & Resorts Worldwide. All totaled, 30 hotel brands are now part of Marriott, creating the world’s largest hotel chain, with more than 5,800 properties and 1.1 million rooms in more than 110 countries—or 1 out of every 15 hotel rooms worldwide. The brands range from Marriott’s Marriott, Courtyard and Ritz Carlton brands to what used to be Starwood’s Sheraton, Westin, W and St. Regis properties.
Workman said that one of the net results is that it is going to be harder to get contracts with hotels, suggesting that it “seems like travel is moving toward dynamic connections.“ There is a lot that we have to re-think,” she said, asking aloud, “Will we be a world specialist?” She added, “In two years, I’ll know more.”
Roth had a slightly different take on the issue. While acknowledging that the hotel portion is the biggest part of the revenue involved in a travel package, she pointed out that, in the New York area, “Lucky for us, there is competition among the hotels.”
“There are new hotels on every block,” she noted. “Revenue managers used to think they can get away with it (higher room rates) … then they realized they can’t. The more hotel beds there are available, the better our situation.”
Raghava seemd to echo what Roth said and added, “It’s a win-win situation … as long as the hotels are going to work with us …”