Bed bank predicts further consolidation following OHG collapse
Three months after the collapse of bed bank On Holiday Group Accommodation, the largest global has predicted further consolidation in the UK market.
Carlos Munoz, managing director of TUI-owned Hotelbeds, said there were still too many rival accommodation wholesalers in the UK and newcomers will struggle to survive.
Former Thomas Cook boss Manny Fontenla-Novoa has acquired the assets of OHG Accommodation to launch a new business to business bed bank, Magic Rooms, with headquarters in Blackburn in Lancashire and headed by some of the former OHG management team, including managing director Brian Young.
However, Munoz said he was doubtful any new entrants to the market will succeed as stand-alone companies. "If any new players come on board they will have to consolidate," he said. "These days every new venture wants to develop a bed bank but it is unsustainable."
As margins on hotel room sales are so low, bed banks need "huge" volumes , he said. "Bed banks require significant investment in technology and distribution and the investment is the same whether you sell £10 million or £1 billion, it’s all about economies of scale.
"There is a lot of room for consolidation in the market."
Hotelbeds said it expected to achieve 20% growth during 2014 in Europe, which represented more than 50% of its total room nights last year when it sold 18 million worldwide, up 17% on 2012, bringing in a total of €1.8 billion.
Munoz said the UK was "developing nicely", with year-on-year summer bookings up 34%.
The UK and Spain remain Hotelbed’s largest source markets, closely followed by Germany and France, however the fastest growing markets in 2013 were Thailand, Indonesia, Malaysia, Tunisia and Greece.
Its best-selling destinations are Spain, the US, Italy, Turkey, Mexico, Portugal, UK and France.
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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