Thomas Cook closes in-house bed bank, Medhotels

Thomas Cook's Sunwing Kallithea Beach
Thomas Cook's Sunwing Kallithea Beach hotel in Rhodes, Greece. Photo credit: Thomas Cook

British travel and hospitality company Thomas Cook has announced plans to shut down its in-house bed bank Medhotels, a UK company that negotiates special rates with accommodation providers and acts as a wholesaler for the accommodation. Expedia and Webjet are poised to take over contracting of the company’s own-brand and partner hotels.

Thomas Cook oversees seven hotel brands: Sentido Hotels & Resorts, Smartline Hotels, SunConnect Resorts, Casa Cook Hotels, Cooks Club, the adult-only Sunprime Hotels and Sunwing Family Resorts. In total, the company has about 175 properties in its portfolio.

The company said that moving away from in-house bed banks and outsourcing production of the complementary hotels would allow it to focus on its core own-brand and partner properties, while offering greater choice at less cost. 

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“The closure of the Medhotels business is a natural evolution of our strategy,” said Thomas Hohn, chief of group complementary product at Thomas Cook. “The transformation of our complementary hotel partnerships will simplify our processes and give customers a better online experience with more choice.

“With our new partnership with Webjet showing strong promise and our alliance with Expedia on track, we are well placed to grow this part of the business in an efficient, sustainable way.”

Medhotels is scheduled to cease operations on Dec. 31, and will continue to accept and honor bookings departing up to that time.

Bed Banks & Business

Thomas Cook acquired Medhotels in 2009 from for an undisclosed sum, making it the UK market-leading accommodation-only supplier. The deal followed the acquisition of bed bank for £21.8 million in February 2008.

The group said that partnership with Webjet had delivered a 51-percent increase in overall bed-bank bookings. City and domestic hotel bookings have started to move to Expedia in the Nordic region and will switch over next month in Belgium and the UK.

The company said that it carefully controlled the quality and auditing of the hotels it was supplied through Expedia and Webjet, which allowed it the ability to offer greater choice while also focusing on the 3,000 hotels to which it sent 80 percent of its customers. 

Thomas Cook's Hotels

In May, Thomas Cook said that its £150-million fund, announced earlier this year, would allow it to grow its own branded hotels. The company, which has also added the new Cook’s Club brand, plans to have 10 to 15 managed hotels in the fund by 2020.

Thomas Cook and LMEY, a Swiss hotel development group, entered into an agreement to work together to create a joint hotel-investment platform, initially through the contribution of a minimum of five owned and directly managed hotel properties between them.

Thomas Cook also acquired from LMEY a 42-percent stake in Aldiana, a premium club and activity-focused tour operator and hotel-management company based in Germany. Aldiana currently operates eight club resorts located in Spain, Greece, Cyprus, Tunisia and Austria, with plans to open another four resorts over the next two years. Following the acquisition, Aldiana sits alongside Thomas Cook’s six existing proprietary hotel brands.

“We have now put all the seed assets that we have planned into this fund and we have big ambitions there to have by 2020, 10 to 15 managed hotels in the fund,” CEO Peter Fankhauser said in May.

The group is expected to update the market on third-party investors joining the fund later this year. In the meantime, it is looking more like the global hotel operators, adding both scale and brands. 

Katherine Doggrell is an editor at Hotel Analyst, the U.K.-based news analysis service for hotel investors.