Online travel services firm Yatra on Saturday said it has acquired hotel bookings portal Travelguru from US-based Travelocity. Yatra did not disclose the value of the deal but its co-founder and CEO Dhruv Shringi said it was ?one of the biggest deals in the e-commerce space in India?.
The latest deal follows Yatra?s previous acquisition of ticket consolidator Travel Services International in October 2010, MagicRooms last July and events portal Buzzintown in January this year.
Shringi added that Travelguru, which has an inventory of more than 6,500 hotels, will give a boost to Yatra?s hotel transactions business. Online travel agents like MakeMyTrip, Yatra and Cleartrip generate the bulk of their transactions in air ticket sales. Travel portals are trying to change this since margins in hotel and tour packages are higher compared with flight bookings.
Gurgaon-based Yatra will operate Travelguru as a separate brand, which will continue functioning from its Mumbai office. ?In the last year, there hasn?t been any major investment in Travelguru for brand-building. We will invest in the portal and maintain it as a separate brand. Also, Travelguru has a very strong management team, which will continue running it,? Shringi said.
When asked if the timing was right in the context of a slowing economy and falling discretionary spends on travel, Shringi said: ?This is a question we internally debated for quite sometime. But if the price is reasonable and both buyer and seller are happy, we thought we should freeze the deal. Travel sales have definitely slowed down, but it?s a short-term phenomenon.?
In 2009, Travelocity Global had acquired Travelguru for about $10-12 million. Earlier, venture capital firms Sequoia Capital India and Battery Ventures had invested $25 million in two rounds of funding in Travelguru.
In a press statement, Travelocity North America?s president Roshan Mendis said the company will work closely with the Yatra.com team on a transition plan and an arrangement to source India hotel content for Travelocity Global, so that its customers continue to have the best access to accommodation options in India.
In April last year, Yatra had raised R200 crore in pre-IPO funding led by Valiant Capital Management to beef up its hotels and holiday booking businesses. Investors included Norwest Venture Partners and Intel Capital. The company had said this funding would be used for expanding Yatra?s holiday and hotel booking services through acquisitions. Yatra had previously raised R150 crore from Norwest Venture Partners, Reliance Capital, Network 18 and Intel Capital.
Going forward, Yatra might look at acquiring a travel player in the holiday space or a mobile application company. However, Shringi says it?s Indian market they want to move deeper into and are not eyeing any international travel company like rival MakeMyTrip.
Travel analysts say that India?s online travel agent space has witnessed many acquisitions in last one year and expect the trend of consolidation to continue.