The Canada Pension Plan Investment Board (CPPIB) and private equity firm Cinven are investing in a Spanish hotel bookings company for nearly €1.2bn.

The joint venture is buying the Hotelbeds Group – a wholesale “bedbank” for the travel industry – from the Tui Group.

The company, which employs 6,150 staff, offers hotel rooms to travel agents and tour operators from its inventory of 75,000 hotels.

The companies said an expected increase in global hotel bookings and a continued shift from offline to online bookings were reasons behind the investment.

Shane Feeney, managing director and head of direct private equity at CPPIB, said: “Hotelbeds is a unique opportunity to invest in the leading operator within the hotel accommodation distribution market, an industry that has strong long-term prospects that will support continued growth.”

The bedbank business generates most of the Mallorca-based company’s profitability, with double-digit volume growth in both its hotel portfolio and room nights over the past five years.

Jorge Quemada, partner at Cinven, said there were “considerable growth opportunities” in Asia, as well as through further investment in Hotelbeds’ IT systems.

Quemada said the wholesale hotel accommodation market remained “highly fragmented”, with further market consolidation likely.

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