Global bedbank giant Hotelbeds is to sell its destination management division back to Tui, the company that sold it to private equity in 2016.

Hotelbeds announced a deal worth €110 million has been agreed for its destination management arm that includes the Destination Services, Intercruises Shoreside and Port Services, and Pacific World brands.

The Palma-based firm said the deal will allow it to focus on its core bedbank activity following the integration of GTA and Tourico Holidays, which it bought in 2017.

Those deals effectively doubles the size of Hotelbeds’ business so that it now offers over 170,000 hotels selling to over 60,000 travel intermediaries globally via its B2B technology platform.

Joan Vilà, executive chairman of Hotelbeds Group, said: “Today’s sale represents yet another important milestone for our group since becoming an independent business in September 2016.

“This simplified structure will enable us to focus fully on our bedbank core, where following our recent acquisitions of Tourico Holidays and GTA we are already a market-leading business innovating the hotel and ancillaries distribution chain via our best-in-class B2B technology platform.

“Our destination management division has been highly successful over the last 18 months, growing revenues significantly and enhancing its range of services.

“However, Tui recently approached us and after careful consideration we believe that this is in the best interests of all stakeholders: not least our employees and business partners.

Tui is well placed to continue the division´s growth trajectory, given its own core tour operator strategy as well as the longstanding and significant relationship between our two groups, with Tui being an important customer and partner.

“Our leading position in the bedbank segment has been built on the origins of our legacy incoming services business, and I would like to thank all of the staff in the destination management division for contributing so significantly over the years towards our group becoming the mature and independent business it is today – and I wish them all the best for the future.

“We also look forward to a continued strong relationship with Tui, a strategic customer for our bedbank business.”

Hotelbeds’ destination management division is led by managing director Jordi Cerdó and works across more than 150 offices globally.

The company offers tours, transfers and other in-destination services to its tour operator partners in over 70 countries worldwide and handles around 2.2 million passengers per year.

The deal is subject to customary regulatory and anti-trust approvals.

TUI chief executive, Fritz Joussen said: ‘The global market for these services is growing. Four factors put TUI in an extremely good starting position: our strong international brand, the trust of 20 million customers, the trust of the destination countries through decades of presence and, most importantly, our world-class IT and CRM systems, in which we have invested in recent years”.

“The TUI brand guarantees the usual premium service, TUI quality and TUI comfort despite the multitude and complexity of leisure offers and providers at the holiday destination. Our IT and CRM systems guarantee that our guests will only receive offers that are relevant to them. And they get them directly from us, not from third parties. Advice, booking, flight, hotel and leisure activities at the resort come from a single source. The customer has one contact person, that is TUI.”