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5 key insights a bedbank needs to optimize their business
A bedbank is a company that brokers special rates with hoteliers. They act as a wholesaler, marketing rooms to consumers on behalf of the accommodation provider.
Some bedbanks are linked to tour operators, airlines or travel agents, whilst others are independent businesses. Meanwhile, the broader hotel distribution business is a complex network of suppliers and intermediaries. Due to fierce competition, properties have to supplement direct sales with several intermediaries to extend the reach of their brand. For example, alongside bedbanks are traditional wholesalers, OTAs, metasearch engines, and GDSs. As a result, bedbanks need to optimize their operations in order to compete with rivals across the spectrum.
Although robust infrastructure and strategic processes are important, the crucial tool a bedbank needs is data. However, data availability is not the issue – every distribution transaction generates swathes of insight-rich raw data. Instead of concerns around the availability of data, companies need to focus on ensuring they have the capabilities to capture and analyze this intelligence. So, for example, businesses should invest in software solutions that can measure KPIs as well as capture information from XML messaging.
When it comes to managing quotidian challenges, there are five key data sets that bedbanks need to optimize. Through examining the significance of each data set, it is possible to gain greater insight into how they can improve day-to-day operations. In this article, we discuss how monitoring these five metrics will streamline operations, reduce overheads, and enhance business strategy.
1. Reduce timeouts
Every day, a plethora of requests reach travel distributors’ servers. Searches, queries, offers, cancellations, and transactions are exchanged between hoteliers and intermediaries around-the-clock. As consumer expectations rise, the velocity and reliability of data exchange is crucial. Therefore, businesses cannot afford to allow timeouts or system failures. Although there are numerous reasons why a timeout can occur – including networks, servers, and request errors – every timeout represents a missed sales opportunity. In response, distributors need to closely monitor timeout frequency and conditions that cause these timeouts in order to take rapid preventative action.
2. Enhance response times
Alongside mitigating timeouts, distributors also need to optimize response times. It is critical that distributors measure response times to ensure that performance stays within acceptable boundaries, supporting operations and user experience. Furthermore, monitoring response times is a useful indicator of the overall system and application health. By measuring end-to-end technology performance, bedbanks and other wholesalers can optimize the sales cycle, boosting conversions and enhancing customer experience.
3. Align inventory with demand
A wholesaler like a bedbank needs to gain a real-time overview of their inventory. From here, distributors need to monitor search trends, manage brand visibility, and ensure that these two metrics are aligned. Poorly balanced advertising strategy and inventory availability are potentially extremely costly, as running out of popular packages can disappoint customers and damage company reputation. Although lag in inventory updates is not uncommon across the industry, a properly optimized system can create an important competitive differentiator. For instance, capturing XML messaging data and analyzing real-time search requests can ensure inventory is optimized in line with demand. Not only will this approach boost revenue, but it will also improve customer satisfaction.

4. Properly manage profit margins
Travel distribution networks are intricate webs of various suppliers and intermediaries, all offering a vast variety of products and services. As a result, wholesalers have to deal with a number of different partners, including hoteliers, airlines, and tour operators. From here, there one will find various room types, destinations, and different pricing structures. As a result, variation in margin levels will emerge. Bedbanks need to develop a nuanced understanding of the variables that inevitably impact cost and price in a competitive environment. Through proper margin management, a bedbank can ensure they can optimize profit against inventory. The effectiveness of this strategy is dependant on securing rooms with the highest margins and securing fulfilments at optimum purchase rates. This has to be achieved within the regular commerce parameters of accurate, real-time prices that are delivered to consumers in a timely manner.
5. Revenue per search request
Within the travel industry, it is common that businesses benchmark search requests against the ‘look-to-book’ model. This system measures the number of searches in relation to conversion. Of course, it is only the case when a customer confirms that profits are made – however, as search requests balloon, so do the overheads associated with handling this volume of requests. So, although look-to-book is a good indicator of activity, this metric does not actually tell businesses much about who is searching and what it is that compels them to book. Furthermore, this model tells distributors very little about customer profile; for instance, it is difficult to ascertain customer preferences or value.
As such, look-to-book is a cost-centric model as opposed to a revenue-centric model, which does not particularly aid resource management. A better evaluative model is to monitor search requests per channel against revenue levels. For example, XML analytics can provide insights into which channel is delivering the highest volume of conversions versus search requests. Through this intelligence, businesses can optimize marketing strategy and channel relationships.
Why bedbanks need to measure distribution performance in real time
The travel industry is generating more data than ever before. Every mouse stroke, tap, click, search, and transaction create swathes of valuable data. Within this data lies intelligence that enables businesses to access key competitive differentiators. For example, advanced analytic capabilities are crucial to creating accurate and personalized customer profiles. As a result, the success of bedbanks in a technology-driven market relies on capturing and interpreting distribution performance data in real time.
The data described in this article is easy to collect. With the right analytics solutions, bedbanks can leverage this valuable information and gain access to a vast spectrum of intelligence, from system performance to an optimized pricing strategy. With enhanced insights into timeouts, response times, inventory levels, profit margins, and search return-on-invest stats, businesses can significantly streamline operations and fine tune their channel mix. Without this intelligence, bedbanks will continue to fail meeting their full business potential.