Online Travel Agency (OTA) MakeMyTrip (MMT) has bought Hotel Travel Group (HT Group) in a multi-part deal totaling US$ 25 Million. The HT group owns & operates HotelTravel.com. The website is predominantly active in the South East Asian regions.
Supposedly stepping up its inorganic expansion strategy MakeMyTrip has acquired the web-portal & associated properties by paying US$ 15 Million in cash. The balance amount will be paid in the form of MMT stocks & that too in three separate annual tranches which would culminate in 2016. Two of the promoters for the HT group will continue to serve the company & will earn additional payouts provided they meet or exceed pre-set revenues and EBIDTA (earnings before interest, taxes, depreciation and amortization) targets.
Is this move preparatory?
Quite recently, rival Yatra.com had acquired multiple hotel-accommodation focused web-properties. This move had given it additional clout when it comes to offering a comprehensive package at multiple budget slabs. Furthermore the Indian online travel scene is getting quite populated. As if the travels section was not enough multiple companies are coming up with unique short-trips & deals for the weekend getaway crowd. These companies are even securing strong financial backing.
Under such tough conditions it is vital for companies to acquire multiple avenues & offer high amount of choices for its growing customers. Else they risk losing their patrons to rivals. Apparently, aggregating services has to be a regular practice. It even helps promoting the site on web-portals that source travel deals. Wego is one such example.
What advantage does HT group offer? SE Asia destinations like Thailand, Singapore and Malaysia have always been a favorite holiday destination for Indians. Comparatively low budget, coupled with great shopping opportunities have enhanced their appeal. The HT group has a strong presence in these regions having tie-ups with around 80,000 hotels across the globe. Do you think MMT will continue the website or shut it down & absorb it?
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