Wholesaler

What is the definition of Wholesaler in the hotel industry?

A Wholesaler is a 3rd party group that sells hotel room nights. Wholesalers are corporations that purchase rooms in bulk then sell them to travel agents and OTAs, permitting hotels to make more sales. Wholesalers are in service in the B2B section, meaning they do not sell directly to the community but to other 3rd party sites and circulation channels.

Pre-internet a hotel would sell rooms to a wholesaler, which would sell it to a travel organization, which would then to sell to the end consumer. All business would comprise a markup, so that all parties would be able to make cash off the sale. Since internet, wholesalers will usually sell their rooms to any type of OTA (large or small and unknown) and other wholesalers. This causes uncertainty for hotels and drives revenue margins down. High wholesaler / Travel Agents / OTAs profit margins mean revenue loss of the hotel!

To fix this, hotels are turning their attempt into marketing their possessions and budding their own online booking reservation organization to force direct bookings. Some chains have even approved price match assurance, where if a guest finds a price for the same room on a varied site, the hotel will equal it (the lower rate which the guest may discover ‘somewhere else’ is because it does not comprise large markups and payment from OTAs). Hotels nowadays should to be cautious while signing contracts with wholesalers and make sure to elucidate the room re-selling procedure in the terms and conditions.