Distribution
Wholesaler
Also written: bed bank
What Wholesaler means
A B2B intermediary that purchases hotel room inventory in bulk at deeply discounted net rates and resells those rooms to third-party travel sellers, including online travel agencies, retail travel agents, and tour operators, rather than directly to end consumers.
How it is used
Revenue managers use wholesalers to secure base business far in advance and reach international or niche markets that are costly to target directly. However, static net rate contracts can erode profit margins during high-demand periods. Operators must aggressively monitor dynamic wholesale rates and enforce contract terms to prevent unbundled static rates from leaking onto public OTAs, which undercuts the hotel's direct pricing and violates parity agreements with primary channel partners.
Worked example
A 200-room resort contracts with a bed bank to provide 20 rooms per night at a net rate of $100, assuming a target retail price of $140. If the wholesaler unbundles this rate and feeds it to an online agent who lists the room publicly at $115, the hotel loses direct bookings at its published $150 rack rate and suffers channel conflict.
Common mistake
Failing to enforce strict merchant-of-record and packaging clauses allows wholesalers to leak discounted net rates onto public consumer sites, damaging direct booking channels and ADR.