Expedia Acquires Travelocity From Sabre for $280 million


Sabre & TravelocityPublished: Jan 23, 2015 at 3:40 pm EST

The online tourism market was shaken today with the news of Expedia Inc. (NASDAQ:EXPE) acquiring the online travel agency, Travelocity, from Sabre Corp. (NASDAQ:SABR) for $280 million in cash. The deal is the continuation of a strategic marketing agreement between Expedia, Inc. and Travelocity, which enables the former to power the technology platforms for the latter’s websites in US and Canada. This agreement allows access to Expedia, Inc.’s supply as well its customer service and support program.

Expedia is one of the pioneers of online travel industry, which, over the years, has cemented its position and made an extensive brand portfolio, covering many aspects of the tourism and travel market. It provides travel information, and hotel and flight bookings, as well as localized websites in 31 countries to cater to local audiences, amid other services.

Expedia, Inc.’s President and CEO, Dara Khosrowshahi, commented on this development saying: “Travelocity is one of the most recognized travel brands in North America, offering thousands of travel destinations to more than 20 million travelers per month, The strategic marketing agreement we’ve had in place has been a marriage of Travelocity’s strong brand with our best-in-class booking platform, supply base, and customer service. Evolving this relationship strengthens the Expedia Inc. family’s ability to continue to innovate and deliver the very best travel experiences to the widest set of travelers, all over the world.”

Sabre is a leader in the global travel industry and provides technology, data, software, and distribution solutions. The company’s services are utilized by many players in the tourism and travel industry, from airlines to hotel management, in ensuring the success of operations such as reservations, revenue tracking, and flight and crew management. The President and CEO of the company, Tom Klein, acknowledged that Sabre and Expedia have had a successful partnership in boosting Travelocity’s business, and called today’s decision to be in the interest of the company.

Expedia, Inc. stock is up 2.16% today trading at $88.56, while Sabre stock is up 1.29% trading at $20.75 as of 3:25 PM EST.

via Expedia (EXPE) Acquires Travelocity From Sabre (SABR) For $280 million.

Expedia: Key Partnerships and Acquisitions in 2014 – Trefis

Expedia logoExpedia has experienced a healthy 2014.  The world’s second largest online travel services provider (in terms of gross booking volume of $39.2 billion) displayed a 22% year-on-year increase in revenues for the first nine months of 2014, to $4.4 billion. The key factors propelling this growth were the healthy performance of the hotel room nights and air tickets segments. The top line growth, combined with the disciplined investments in selling and marketing, led to a solid bottom line. Net Income for the first nine months of 2014 increased by 141% year-on-year to $332 million.

In this article, Trefis discuss the major acquisitions and partnerships undertaken by Expedia in 2014. They describe the strategic significance of the deals, and how these will lead to further growth in the future.

Extended Partnership With HomeAway: Expedia Forays Further Into The Vacation Rental Space

In September 2014, Expedia declared that it will continue its partnership (initiated in October 2013) with HomeAway, the world’s largest vacation rental website. HomeAway services account for approximately 15% of the U.S. and European vacation rental bookings market. [1] HomeAway’s website has more than one million live listings in 190 countries. [2]

Expedia would now be able to list 115,000 HomeAway vacation rental properties on its U.S. website. Vacation rentals are privately owned residential properties that property owners and managers rent to travelers on a nightly, weekly, or monthly basis. According to a study by PhoCusWright, the market for vacation rentals in the U.S. stood at $23 billion in 2012, lower than its levels prior to the recession. However, the share of online sales in vacation rentals doubled from 12% in 2007 to 24% in 2012, and this is expected to increase to 30% by 2014. [3]

Expedia believes that the vacation rentals listing will complement its existing business and will not undermine its hotel bookings, which currently accounts for more than 70% of its revenue. While the partnership will give HomeAway vacation rental owners and property managers exposure to more than 13.4 million monthly visitors on Expedia, Expedia users will get the benefit of being able to bundle home rentals with flights, cars and other travel bookings offered through the website.

Expedia’s Wotif Acquisition: Ensuring Market Dominance In Australia And New Zealand

In November 2014, Expedia completed its acquisition of Australia-based Wotif Group for $612 million. Wotif Group is a prominent player in the Asia Pacific market with a host of travel brands under its umbrella, including Wotif.com, lastminute.com.au, travel.com.au, Asia Web Direct, LateStays.com, GoDo.com.au and Arnold Travel Technology. Wotif’s portfolio focuses on hotel and air, offering consumers more than 29,000 bookable properties across the globe. The group currently operates from Australia, China, Indonesia, Malaysia, New Zealand, Singapore, Thailand, UK and Vietnam. [4]

Wotif was Expedia’s major rival in Australia and New Zealand. With 1.3 million hotel reviews on its platform, Wotif had a market leadership in hotel reviews in the Australia New Zealand (ANZ) market. According to September 2013 data from Experian Hitwise, among top travel websites in Australia, Wotif held the second position and Expedia, the third position. Also, among top New Zealand travel websites, Expedia enjoyed the first position and Wotif, the second. [5]

According to a report by PhoCusWright, the Asia Pacific (APAC) market overtook Europe to become the global leader in regional travel in 2012. The Australia-New Zealand market accounted for 17% of APAC’s online travel market and earned $13.7 billion in online gross bookings. For 2015, the market size is estimated to be around $126.6 billion. [6]

Hence, both now and in the future, Asia Pacific will be a strategically important sector for online travel companies. The ANZ market is the third largest market in the APAC region, and Wotif is a prominent player in the ANZ market. Hence, we expect the acquisition to propel Expedia’s growth in the ANZ market and this in turn would be a contributing factor in establishing Expedia’s dominance in the APAC market.

Expedia’s Auto Escape Acquisition: Boosting The Car Rental Service Segment

Expedia acquired French car rental company, Auto Escape, in June 2014. The acquisition increased its exposure to the $36.9 billion global car rental industry, which is expected to grow at a compounded rate of 13.6% to reach $79.5 billion by 2019, according to Transparency Market Research. [7]

Auto Escape offers car rental services from over 300 car rental suppliers in 125 countries, and has a fleet of over 800,000 vehicles. It is estimated that Auto Escape’s revenues increased fivefold in the last five years to €120 million ($160 million). [8] Auto Escape became a part of the CarRentals.com brand, a business unit managed by Expedia’s Hotwire Group.

Although the contribution of car rentals and cruises to the valuation of Expedia is in low single-digits, we believe that the Auto Escape acquisition will help it sell more vacation packages and destination services since car rental is an integral part of such offerings.

via Expedia: Key Partnerships and Acquisitions in 2014 — Trefis.

Vacation.com Unveils New Brand and Positioning | Travel Agent Central

Vacation.com revealed details of its new brand that the consortia says is positioned around travel agents’ aspirations to “Belong. Inspire. Grow.” The updated tagline more incisively reflects the industry-leading role outlined in the organization’s positioning statement, Vacation.com said: “Vacation.com is an innovative network of professionals that celebrates highly driven travel agencies by supporting them with the tools to help them grow and inspire.”

via Vacation.com Unveils New Brand and Positioning | Travel Agent Central.

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How Booking Sites Performed on Stock Markets in 2013 – Skift

Priceline deservedly got most of the attention among online travel agencies in 2013 as its share price shattered the historic $1,000 mark in September and closed the year up 78.1% at $1,162.40.

But, leapfrogging-bragging rights for the year goes to lowly Orbitz Worldwide, which closed out the year with its stock price increasing 149.3% to $7.18.

Orbitz has a long way to go: Priceline’s shares could lose $7.18 in a day without breaking a sweat.

Orbitz made some strides in 2013, shifting some of its revenue mix toward hotels, notching some private-label wins and patching up one of its brands in Australia, but its room-night growth was lackluster and its sales targets for 2014 are sub-par.

via How Booking Sites Performed on Stock Markets in 2013 – Skift.

Chinese détente: Travel giants Ctrip and Qunar agree to work together | Tnooz

In a somewhat surprising move, China’s two leading travel portals Ctrip and Qunar have decided they can forge a strategic partnerships.

The deal is only aimed at boosting the vacation product sales between the portals, and gaining additional traffic, yet the agreement is interesting for various reasons.

In the past, Ctrip and Qunar have fought legal battles against each other, covering both an infringement lawsuit and a defamation lawsuit.


Read more at http://www.tnooz.com/2013/08/08/news/chinese-detente-travel-giants-ctrip-and-qunar-agree-to-work-together/#yGqcPI8eZk7uwGRA.99

via Chinese détente: Travel giants Ctrip and Qunar agree to work together | Tnooz.

Expedia Faced Q2 Advertising Woes and its Hotwire Business Suffered, by Skift – Skift

Expedia Faced Q2 Advertising Woes and its Hotwire Business Suffered, by Skift – Skift.

TV travel advertising in the U.S. has suddenly become more crowded and competitive, and as Expedia Inc. brands struggled to break through the clutter in the second quarter, the company’s hotel business suffered, and its Hotwire unit took a particularly hard hit.

Amidst some downbeat financials, that was the competitive climate that officials said Expedia operated in during the quarter.

The impact of Expedia’s multifaceted woes? Room night growth decelerated from 28% year-over year in the first quarter to 19% in the second quarter, and revenue growth likewise slowed from 24% in the first quarter to 16% in the second.

And, Expedia Inc.’s net income declined 27% to $90.5 million in the second quarter of 2013, compared with the same period a year earlier

Wego appoints Joachim Holte as Chief Marketing Officer – People On The Move – etravelblackboardasia.com

Wego appoints Joachim Holte as Chief Marketing Officer – People On The Move – etravelblackboardasia.com.


Wego.com, the leading travel search site across Asia Pacific and the Middle East, today announced the appointment of Joachim Holte as Chief Marketing Officer (CMO). Holte will manage all demand generation and brand marketing activities worldwide including SEO, SEM, display, affiliate and partner marketing, PR, CRM and offline advertising. Holte will report to Wego CEO and Co-Founder, Ross Veitch and has relocated to the Singapore HQ from Australia.

Arab Travelers Become a Key Source Market for Hotels in the Middle East

Arab Travelers Become a Key Source Market for Hotels in the Middle East.

Ramallah, Palestine (PRWEB) July 14, 2013

Yamsafer, an online hotel booking website recently re-launched its redesigned website to include new Arab destinations such as the UAE, Lebanon, Kuwait, KSA and Egypt. The company will soon increase the number of participating hotels to 2,500 properties spanning the MENA region in 22 Arab countries with a focus on competitive hotel pricing.

Why online travel in Indonesia is different | Tnooz

Why online travel in Indonesia is different | Tnooz.

As Wego plots significant expansion in Asia, the $36m funded company highlights just how different the Indonesian travel industry is to other markets in the region.

Indonesian travellers prefer to pay via bank transfer, experts say rate parity is a myth among hotels and it’s the country where BlackBerry still leads (mobile marketing strategy, anyone?)
Read more at http://www.tnooz.com/2013/07/16/news/why-online-travel-in-indonesia-is-different/#G0zF2Qz9uzBZcwUK.99