WTM 2012: Hotelbeds plans major investment as part of aggressive expansion

Tui Travel-owned accommodation-only supplier Hotelbeds is planning for aggressive expansion over the next years with significant increases in investment in IT, distribution and product contracting.

Carlos Munoz, managing director of the Palma-based firm, said the firm’s headcount will increase 18%, with many new employees on the contracting side of the business.

Hotelbeds’ 2012 trading results showed the firms expects to see €1.45 billion in 2012, up from €1.2 billion in 2011, with the Middle East and Asia Pacific the two fastest growing regions.

Munoz said Hotelbeds will increase expenditure on technology by 43% and sales and marketing by 40%.

The additional investment will power growth over the next three years beyond the 7.3% predicted for online accommodation globally, with 40% growth expected in the MEAPAC region and 20% in the Americas.

“Going forward we have really aggressive plans. We see we are in the right place. We have achieved our market leadership position in a market – accommodation online – which is growing faster than other markets. We feel confident we can continue to invest in people, IT and distribution.”

Munoz predicted there will be come consolidation in the sector, but said Hotelbeds would not be leading that in terms of acquisitions due to the scale it has already managed to achieve.

“There will be some consolidation but there will also be a place for players in every market. There are hundreds of OTAs and small to medium-sized players who cannot afford to contract everywhere in the world.

“When it comes to the long tail of products, contracting in Asia or Africa or the America, they cannot simply because of their size. This happens in every market.

“There is a need for a big consolidator behind the scenes to provide all of these small to medium sized players.”

Munoz said the market delineation between customers who like to go on packages and more independent travellers is clear and that this is reflected in Tui’s own business with the Thomson and First Choice tour operators and retail going down the exclusive differentiated product route.

“There are two different market segments with two different types of customers. Tui, with two different business plans is approaching both of them and there is no competition.”

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