PALMA DE MALLORCA, SPAIN—Fastpayhotels, a new company headquartered here, aims to revolutionize the way B2B hotel distribution is done with a model that pays all reservations at the time of booking, up to 390 days in advance. The business focuses exclusively on the sale of non-refundable rates.
“We launched Fastpayhotels as we believed there is a better way for hotels and trade agents to interact than the current solutions available,” explained Alex Gisbert, CEO of Fastpayhotels. “Both OTAs and traditional agents are not getting the right and best inventory available, and hotels perceive the travel agent business to be expensive, of low incremental value and comparatively negative for cash flow.”
Gisbert stressed that Fastpayhotels is not a bed bank. “I think that term has some fairly negative connotations in the current environment,” he said. “Fastpayhotels represents a platform for hotels and agents to be able to distribute in a win-win environment.”
The CEO laid out the benefits for both parties. For hotels, the company pays all reservations to hotels at the time of booking, only trades and sells non-refundable rooms (and therefore delivers no cancellations) and hotels set all prices. In addition, said Gisbert, Fastpayhotels is able to operate at a lower cost to hotels than other channels, including some of the new CPA direct channels.
Travel agencies also receive many benefits, said Gisbert. “At this level of cost and with the benefits of dynamic rates, travel agencies are getting access to rate plans not traditionally available to them [pre-paid rates, web rates, etc.]. Additionally, hotel revenue managers naturally weed out and stop sale expensive distribution channels and leave the cheaper ones open. This means travel agencies can get access to better room availability than from their existing suppliers,” he said.
“Old school bed banks and their current practices, such as paying late, allowing the use of FIT or opaque rates on sites such as Trivago or Kayak, or allowing agents to book four hotels for the same dates and then cancelling three when convenient are actually putting the competitiveness of travel agencies in the future at risk,” continued Gisbert. “Lets face it: The big two global OTAs are executing better than ever and making it very hard for travel agents to compete. Fastpayhotels aims to change that.”
The company offers online registration to travel agents and hotels at www.fastpayhotels.com. Once hotels register, they can be on sale and receiving payment within 48 hours.
“Honestly, we genuinely think this is a big disruption,” said Gisbert. “Some major global chains have told us they expect all B2B distribution to follow our model within five years. We are essentially making travel agent distribution almost 40% cheaper than Expedia and paying hotels up to 390 days before the guest walks up to the reception in any hotel. Traditionally, B2B distributors have had a very fractured and confrontational relationship with travel agencies. Our philosophy is different: The better we treat the hotel, the more likely it is we will get the better rates and availability to the travel agency.
“We have been signing up hotels for more than three months now,” reported Gisbert, noting the company has over a 90% hit rate of hotels signing up when they hear how the platform works. “In fact, many independent hotels are even registering themselves.”
Fastpayhotels, backed by Spanish investors, recently launched with more than 2,000 hotels in 21 countries on board. According to the company, it is on track to offer more than 6,000 hotels to the trade at the start of the summer season.
Gisbert noted that the company aims to work with reputable hotels in major destinations, largely focused on four- and five-star properties. “In major global destinations such as New York, Paris or Singapore, we are especially keen to pick up partnerships as we believe our value proposition works best there,” he said. “If a hotel in this kind of destination is mostly 100% occupied and paying upwards of 15% commission, which we think is a lot, then our model will do very well for that hotel… Long term, we aim to be the preferred B2B distribution channel for hotels globally and where travel agencies get the very best inventory to compete.”