Mergers and Acquisitions Shape Travel Landscape

MergersAcquisitions

Consolidation in the travel industry has become as common as picking up a daily newspaper for some companies.  TripAdvisor recently announced its most recent acquisition, a $200 million deal for tours and activities provider Viator, which is the company’s fourth move of 2014.

TripAdvisor also added lafourchette, which means “the fork” in French, along with Tripbod in an effort to upgrade its mobile acumen, and to play a larger role in travelers’ trip-planning and booking activities in-destination.  However, TripAdvisor is not the only company that is making waves on the mergers and acquisitions front.

Major OTAs Adding Smaller Pieces
The Priceline Group made news earlier in 2014 when they announced purchases of buuteeq (a cloud-based property management system), Hotel Ninjas (a hotel management software platform), and OpenTable (the leading online restaurant reservation software).  Similar to TripAdvisor, these moves were made to tap into forms of ancillary spending that is common in the travel and hospitality industries.

Expedia also add a key piece to its ever-growing puzzle when it announced the acquisition of the Wotif Group, which includes numerous booking sites in Australia.

Mergers and Acquisitions Not a New Concept

TripAdvisor has not always been its own independent brand.  In fact, the company was initially acquired by Expedia before branching out to become one of the leading peer review websites online today.

One could argue that the most impactful acquisition of the past decade occurred in 2005 when the Priceline Group acquired Booking.com.  At the time, Booking.com was a European-based booking portal with a very limited number of properties available to actually be booked online.  Ultimately, Priceline paid $135 million for the acquisition.

That $135 million may not seem like much of a bargain, but when you consider that the Priceline Group paid $2.6 billion in cash to acquire OpenTable earlier this year, $135 million seems like a drop in the bucket.

Next Step: Vacation Rentals
The Expedia’s, TripAdvisor’s, and Orbitz Worldwide’s of the world are not the only companies jumping on this bandwagon.  Homeaway, one of the leading providers of vacation rentals around the world, acquired the rights to Glad to Have You and Stayz earlier this year.  Glad to have you offers Homeaway a mobile guest management service while Stayz Group represents Australia’ leading vacation rental marketplace.

So what does the future hold for the rest of the vacation rental industry?  It is hard to accurately predict right now, but it seems unlikely that all of the sites that feature vacation rentals today will still be doing so two or three years down the road.  Inevitably, the most popular and profitable of these companies will swoop up the emerging companies and claim them as their own while continuing the current trend of acquiring, merging, and gaining power in the industry.

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