New Delhi/Mumbai: Yatra Online Pvt. Ltd is taking over rival travel and hotel booking site Travelguru.com by acquiring the stake of US-based travel agency Travelocity.com LP in the Mumbai-based company, according to two executives close to the development.
Details about the value of the transaction weren’t immediately available. Officials of both Yatra and Travelguru didn’t respond to phone calls and messages. Travelocity’s representatives couldn’t immediately be reached for comment. Speculation about the acquisition was doing the rounds of various websites on Friday.
The Travelguru acquisition will make Yatra a dominant player in domestic hotel bookings, a Yatra executive and analysts said. This extension is becoming critical as margins dwindle in the ticketing segment, given stiff competition from rivals such as Makemytrip.com and Cleartrip.com. “The decision has to be purely about the hotel business,” said Chetan Kapoor, an analyst at travel industry research company PhoCusWright. “Online travel agencies (OTAs) have been centered around airlines since a long time. But now, air ticketing is not that profitable with current commissions. The online travel companies make a profit of around 1-2% from air ticketing, whereas the hotel business gives them 15-30% margin.”
According to information on its website, Yatra is backed by Promod Haque’s Silicon Valley-based Norwest Venture Partners (NVP), Anil Ambani-led Reliance Group’s Reliance Venture Asset Management Ltd, Raghav Bahl-promoted Television 18 Group, and Intel Capital, the strategic investment arm of Intel. Travelguru is led by Ashwin Damera, chief executive and co-founder, and Ganesh Rengaswamy, co-founder, according to its website.
Travelocity, a part of Texas-based travel marketing and distribution company Sabre Holdings Corp., bought Travelguru.com in 2009 with the aim of expanding its reach in the domestic hotel industry.
“It’s not clear why Travelocity would want to unload Travelguru from its portfolio as they acquired it mainly because of its reach in domestic hotel business,” Kapoor said. “It seems like a profitable deal for Yatra, which will now have a huge domestic hotel inventory, because this is where the profit is.”