Yes, That’s Exactly What We Need - Another Player In The Travel Space

Don’t you think the situation in the travel space is going bezurk getting out of hand? Alootechie reports that Kayak, the most popular travel meta-search  has launched an India site - Kayak.in. The site currently only features flights, and the Fare Buzz section is currently US focused.

This makes Kayak the twentieth fifth fourth travel meta-search player in India, after Zoomtra (Smile Interactive), Ixigo (funding from BAF Spectrum), Mobissimo and ezeego1 (Cox & Kings) (Update: as pointed out in the comments, ezeego1 is NOT a meta search, despite their claims). There are also a large number of other travel related sites operating in India, focusing on flight ticketing, bus ticketing, hotel booking, selling last minute ticket inventory, holiday planning…

These are tough times- with the fuel price rise, airfares have increased, and hence the propensity to travel would have declined. Most of Online Travel Agents (OTAs), despite high revenues, primarily have what are called “pass through revenues”, and commissions are in the low single digits. Which is why consolidation (like Expedia acquiring TravelGuru) is imminent.

The meta search engines actually have an advantage - can crawl airline sites for special fares which OTAs are contractually not able to offer (correct me if I’m wrong, please).

Updated: Expedia Acquires India OTA TravelGuru: Report; TravelGuru Denies

TravelGuru CEO Ashwin Damera’s response to Medianama.com regarding the story about the company being acquired by Expedia:

Dear Nikhil,
I’m disappointed that mere speculation is being published in the form of a “story”. Many people have called me based on this hearsay and what they have read online.

There are many inaccuracies in these reports – the biggest being – there has been no deal signed!

What more is there to deny?

Warm regards,

Ashwin

Translation: The valuations reported were completely out of whack. No deal has been signed yet, but that doesn’t mean one will not be. It will be difficult for me to deny anything else on the record, so this is all I have to say.

Original Story: Online travel portal TravelGuru has sold a majority stake to Expedia, the largest OTA in the world, reports VCCircle. We had also heard that TravelGuru had been acquired, but weren’t able to confirm this last week. BCCL also had a Private Treaties investment in TravelGuru, and I’d asked Private Treaties CEO S. Sivakumar about the TravelGuru being bought by Expedia last week, but he offered no comment. As per the report, the majority stake has been acquired for $17 million, at a valuation of $30 million for the combination of TravelGuru and Desiya.com.

Something about these numbers doesn’t seem to be correct. If you go by earlier news reports, TravelGuru had acquired hotel aggregator Desiya for $25 million. So either the Desiya acquisition was overstated by a significant margin, or the $30 million combined valuation for TravelGuru and Desiya is understated. Either way, this doesn’t seem to be a good sign for the OTA business, which has attracted significant VC Funding.

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