Travel online Agency
The online travel agencies (OTAs) started the year on an acquisition spree. It seems all the market players want a bigger share of the $1.3 trillion global travel market pie. Priceline has recently announced the intention to acquire Rocketmiles, a hotel-booking startup. Priceline is also raising $1.13 billion (or 1 billion euros) through a public offering of senior notes for acquisition and other related purposes. Expedia started the year by acquiring its erstwhile marketing partner, Travelocity, and is currently on its way to acquire Orbitz Worldwide, the third largest OTA in North America. TripAdvisor recently acquired the personal journal application provider, ZeTrip and launched a new feature called “Neighbourhoods” to help travelers better navigate in popular tourist destinations.
Below we give a quick rundown on the most notable events in the last week related to these companies.
Adding on to the recent spate of acquisitions on the online travel space, Priceline has expressed the intention to acquire hotel-booking startup, Rocketmiles, for around $20 million. The deal will enhance Priceline’s consumer experience by allowing users to book lodgings via Priceline’s network, as against booking directly with hotels. Rocketmiles aids customers in gaining frequent flier miles by booking through its mobile application or website. These miles in turn can be redeemed for bookings for an array of around 12 airlines. The online travel agency leaders seem to be stressing on loyalty programs for expanding their customer base. Earlier on February 12, Expedia announced its intention to acquire Orbitz Worldwide. One of the advantages which Expedia would gain from Orbitz is the Orbucks loyalty programme. The rewards programs would allow the OTAs to gain a competitive advantage against airlines and hotels who in turn try attracting customers to their own websites. Rocketmiles is backed by $8.5 million in venture capital and the company claims to have a user base running to hundreds of thousands.
On February 24, Priceline announced its decision to raise $1.13 billion (or 1 billion euros) through a public offering of senior notes. It intends to use the fund for general corporate purposes, including share repurchases, paying down debt and making acquisitions. Priceline spent around $2.5 billion net of cash acquired, on acquisitions in 2014. The leading OTA also invested more than $900 million in China’s OTA leader, Ctrip in 2014. Priceline had around $8 billion cash on hand in the end of 2014, and the senior notes will add on to that fund.
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