Expedia buys Travelocity for $280M

NASDAQ-listed Expedia, Inc has acquired online travel agency Travelocity from Sabre Corporation for $280 million in cash. The acquisition follows the 2013 strategic marketing agreement between Expedia and Travelocity under which Expedia has powered the technology platforms for Travelocity's US and Canadian websites along with providing Travelocity access to Expedia's supply and customer service program.

"Travelocity is one of the most recognized travel brands in North America, offering thousands of travel destinations to more than 20 million travellers per month," said Dara Khosrowshahi, Expedia's president and CEO.

"Our primary focus at Sabre is to provide mission-critical software solutions to our global airline, hospitality, and travel agency customers – and to help them support their customers every day," said Tom Klein, Sabre president and CEO. "We have had a long and fruitful partnership with Expedia, most recently by partnering to strengthen the Travelocity business, so our decision to divest Travelocity is a logical next step for us both," he added.

Expedia is one of the world's largest travel companies, with an extensive brand portfolio that includes leading online travel brands, such as OTA Expedia.com (with localised sites in 31 countries), Hotels.com (along with localised sites in 60 markets), discount travel site Hotwire, corporate travel management firm Egencia besides properties such as Venere, eLong, trivago and CarRentals.com.

Sabre is a technology provider to the global travel and tourism industry.

The acquisition doesn't change the strategy in India for Expedia, where it already runs its flagship brand as also other properties.

Travelocity had shut down its independent India business around two years ago.

This came around seven months after it sold online hotel distribution network Travelguru to Yatra. This marked a consolidation in the fast growing but crowded OTA business in India which is now dominated by home-grown majors like NASDAQ-listed MakeMyTrip, Yatra, Cleartrip, Goibibo and Via.

Previously, Travelocity had acquired Travelguru in a deal pegged around $10-12 million in 2009. Travelguru, which was backed by Sequoia Capital and Battery Ventures, initially focused on air ticketing, but soon pivoted to focus on hotels aggregation. In December 2007, it acquired a B2B hotels aggregator Desiya.com.

Interestingly before the acquisition by Travelocity, Travelguru was in talks with Expedia, for a deal which didn't materialise.

Travelocity had retained Travelguru as a separate site, though it brought in some common branding element in the logo.