In what seems to be a first of its kind deal (in terms of size – though the actual acquisition price isnt disclosed) in the Indian online travel space Travelocity – the global travel giant has acquired India’s Travelguru.com which is focused on hotel bookings in India and Internationally. Travelocity boasts of annual gross bookings of more than U.S. $10 billion and operates: Travelocity Business® for corporate travel; igougo.com, a leading online travel community; lastminute.com, a leader in European online travel; and ZUJI, a leader in Asia-Pacific online travel.
Travelguru which has been well covered by WATBlog had itself acquired a lesser known desiya.com in its early days in the Indian market. Travelguru is also no newbie to acquisition rumors and previously it was rumored to have been acquired by Expedia another online travel giant but I guess travelocity is where it was headed.
The acquisition will build upon the existing Travelocity India team and will also give them a strong network of hotels which is the USP that Travelguru has built over the years. Travelguru boasts a portfolio of more than 4,000 hotels in India, most of which are independent properties, and it has a strong domestic customer-base.
Currently there are no plans to disolve the Travelguru brand name and Travelocity Global will continue to keep both online travel businesses in India: Travelocity India and Travelguru.
Light At The End Of The Tunnel For Online Travel?
The online travel players that have been struggling with all sorts of issues right from agency commissions to airlines launching their own travel portal can now feel a little better with this deal under the way. This gives some hope to the other players like cleartrip, yatra and makemytrip (all of whom are venture funded) to look at an acquisition option rather than an IPO. We analysed how an IPO isn’t likely for the travel players anytime soon in an earlier post. Now Dhruv Shringi who is the Founder of Yatra.com sent us a mail confirming that his IPO plans are atleast 18-24 months away. So who knows there might be light (think acquisition) at the end of the tunnel (think travel ) for some of travelguru’s competitors as well.
Good to see an acquisition in the Indian OTA market, it has been a long time coming with both Expedia and Travelocity trying to get a foot hold in the Indian market for around a year. The deal is rumored too be around $66 mill…..that is a good price that Travelguru got in this market.
USD 66 million is great if it’s true. Also great to see M&A activity back in the Indian online space after a long time.The last Big one probably could be Ebay acquiring Baazee…. (Not counting mini deals like minglebox, burrp etc)…
Also glad to see that Travelguru’s hotel focus finally paid off and made them ripe for acquisition over more talked about competitors.
This sets the path ablaze for Indian E-commerce players and springs new hope in the horizon.
All the best to both team Travelocity and Travelguru.
66 million is bullshit.. The real deal is done at 12 million and the VC’s who put 25 million at sky high valuations are twiddling their thumbs now!
The founders themselves havent got more than a million out of this all cash deal..
I guess this marks the beginning of consolidations in the OTA space. Travelguru did do a good thing with having focus on Hotel bookings which probably was their differentiating factor over other sites
their turnover was $50M last year (See NDTV report). Given Expedia was paying $70M its likely this deal was struck for $50-$60M.
I heard Expedia tried to get back into this deal? anyone hear anything about that? Wonder what their India strategy will be?
Whats the road ahead for MMT/Yatra/Cleartrip?
http://profit.ndtv.com/2009/08/19003531/Travelocity-buys-Travelguru.html