What Bedbank means
Hotels want steady occupancy across many markets, but few can sign agreements with thousands of travel sellers worldwide. Bedbanks fill that gap. They contract with hotels, load the rates and availability into their systems, and distribute that inventory to a large network of trade buyers.
Inventory is sourced in several ways. Under a direct contract, the hotel agrees net rates and an allocation with the bedbank. Under an allotment, the bedbank commits to a block of rooms, sometimes prepaid, with release dates before arrival. A pay-on-consumption or dynamic model gives the bedbank a discount off the hotel's best available rate, and it pays only for rooms it actually sells. Many bedbanks also buy from other wholesalers and chain connections.
Buyers include OTAs, travel management companies, DMCs, tour operators, retail agencies and even other bedbanks. They see a net rate and add their own markup, or receive a commission, depending on the agreement.
Bedbank rates are often meant for packaging or closed user groups. When they appear publicly below the hotel's own price, rate parity breaks, which is a long-running source of friction between hotels and wholesalers.
How Bedbank works
A bedbank sits between the hotel and the travel seller, buying wholesale and selling to the trade.
- Contract hotelsThe bedbank negotiates net rates, allocations, release periods and cancellation terms with hotels or chain groups, or connects to them through a channel manager.
- Load and map contentRates, availability, room types, photos and policies are loaded and mapped to standard property and room codes.
- Distribute to buyersRegistered agencies, OTAs and tour operators access the inventory through an XML or JSON API, a B2B portal or a white-label site.
- Take the bookingThe buyer books at the net rate, adds its markup and sells to the traveller, sometimes as part of a package.
- Settle paymentsThe buyer pays the bedbank, often against credit terms, and the bedbank pays the hotel under its contract.
Bedbank in practice
Large bedbanks: Hotelbeds, part of HBX Group, describes itself as a B2B marketplace for wholesale clients, and HBX Group reports working with about 60,000 travel distributors. WebBeds, another large B2B marketplace, states on its website (as of 2026) that it offers more than 500,000 hotels to over 50,000 travel buyer partners. WebBeds also operates UmrahHolidays International, a specialist wholesaler focused on Makkah.
Illustrative example: a UAE tour operator builds a five-night Istanbul package. It searches two bedbanks through its booking system, finds a four-star hotel at a net rate of USD 80 per night, adds a flight, and sells the bundle at one price. The hotel component's price is never shown separately.
Who uses it
Advantages and limitations
Advantages
- One contract gives a hotel access to thousands of travel sellers in markets it could not reach alone.
- Buyers get net rates with room to add their own margin, often below public prices for packaging.
- Credit terms and B2B tools make it easier for agencies to sell hotels without prepaying each stay.
- A single API connection can replace hundreds of individual hotel contracts.
Limitations
- Rates leaking to public websites below the hotel's own price can break rate parity and strain hotel relationships.
- Cancellation and amendment terms are often stricter than the hotel's own policies.
- The same hotel appears from several bedbanks, so buyers need content mapping to avoid duplicates.
- Hotels lose direct contact with the traveller and with how and where their rooms are resold.
Frequently asked questions about Bedbank
What is the difference between a bedbank and an OTA?
A bedbank sells hotel rooms to other travel businesses at wholesale rates and rarely deals with travellers directly. An OTA sells to travellers, takes the booking under its own brand and handles customer service. Many OTAs buy part of their hotel inventory from bedbanks.
How do travel agents book hotels through a bedbank?
The agency registers with the bedbank, agrees payment terms, and then books through the bedbank's B2B website or through an API connected to its own booking engine. It sees net rates, adds its markup, and issues a voucher or confirmation to the traveller.
Why are bedbank rates sometimes cheaper than the hotel's website?
Bedbanks negotiate wholesale or package-only rates in return for volume or committed allocations. Those rates are meant to be hidden inside packages or sold to closed groups. When a reseller shows them publicly as room-only prices, they can undercut the hotel and break parity agreements.
Do bedbanks pay hotels in advance?
Sometimes. Under prepaid allotments the bedbank buys a block of rooms and carries the risk of unsold nights. Under pay-on-consumption models it pays only for rooms actually sold, typically after the stay. The payment model affects how aggressively a bedbank discounts unsold inventory close to arrival.
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