Bed Bank
A bed bank is a business-to-business intermediary that buys hotel room inventory at contracted net rates and resells it, at a markup, to a network of travel sellers — tour operators, retail travel agencies, airline holiday arms, loyalty redemption platforms, and other OTAs. The bed bank never markets to the traveller directly. Its product is aggregation: a single API and a single contract that gives a reseller access to hundreds of thousands of properties it would never negotiate with individually. Hotelbeds, WebBeds, Dida Travel and Restel are among the largest examples.
How it works
- The hotel contracts a net rate with the bed bank, usually with an allotment and release period attached, or a dynamic net rate expressed as a discount off BAR.
- The bed bank loads that inventory into its own distribution platform and exposes it through a B2B API and a booking extranet.
- Resellers — a tour operator in Germany, an OTA in Korea, a bank's points-redemption portal — pull the rate, apply their own markup, and sell it under their own brand.
- The guest arrives with a voucher; the hotel invoices the bed bank, not the guest.
Bed bank vs wholesaler vs OTA
The terms bed bank and wholesaler are used almost interchangeably in the trade, and the distinction is one of emphasis rather than law: "wholesaler" describes the commercial model of buying net and selling on, while "bed bank" describes the technology-led aggregator that does it at scale through APIs rather than contracted paper allotments. Both differ from an OTA, which sells to the traveller directly under its own brand.
Why it matters
Bed banks are how a mid-size independent hotel reaches source markets it has no commercial presence in — a property in Seville sold to a Japanese tour operator without ever speaking to one. That reach is bought with the lowest net rate in the stack, which makes bed bank business the least profitable room night a hotel sells on a per-booking basis, and the most useful on a soft date.
The recurring problem is leakage. Because the bed bank cannot control what its thousands of resellers do, net rates intended for opaque, packaged sale routinely surface as standalone room-only prices on consumer OTAs, undercutting the hotel's own published rate and breaking rate parity commitments. Contractual clauses restricting resale to closed user groups, dynamic net rates that move with BAR, and active rate shopping are the standard defences.
Related
- Wholesale / Net Rate — the commercial model bed banks operate
- Bedsonline (Hotelbeds) — the retail-agent-facing arm of a major bed bank
- CUG (Closed User Group) — the mechanism used to keep net rates out of public view
- Allotment — the inventory commitment often attached to a bed bank contract