It is interesting to see this latest wave of consolidation in the travel metasearch space move to Europe with the announcement that the Priceline Group has signed an agreement to acquire UK and Denmark-based metasearch site Momondo Group for $550 million in cash.
With this following on the heels of Ctrip’s acquisition of Edinburgh-based Skyscanner for £1.7 billion last November, all eyes are on Asia Pacific where two pan-regional metasearches remain independent – Singapore-based Wego, which has been making a big play for the Middle East, and Sydney-based Hotelscombined, which has been quietly building its consumer-facing brand across Asia as well as deepening its core and original B2B business.
Plus of course there are also the local metasearch sites such as travel.jp in Japan and allstay in Korea – could these individual markets get interesting enough for the travel giants who are battling for global dominance and wider and deeper customer acquisition channels? Or could they be snapped up by local search giants as Baidu did with Qunar in China? In South Korea, Naver, the dominant search engine, is becoming a major force in travel metasearch.
To Lorraine Sileo, vice president research at Phocuswright, the continuing consolidation is proof of how difficult it is for independent metasearches to compete on a global level.
She told WIT, “The Ctrip/Skyscanner deal and now the Kayak/Momondo acquisition show just how difficult it is for an independent metasearch company to stay viable in the same playing field with Google, TripAdvisor and OTAs getting into their space. One obvious exception is Trivago, which is out to prove a hotel meta can thrive alone after its December IPO.”
Ross Veitch: Last of the independents
Commented Ross Veitch, CEO & co-founder of Wego, “I’m pleased to see Hugo and the team at Momondo Group getting a good result and finding a home with Steve at Kayak. I hope some of the interesting product features we’ve seen from Momondo survive the migration onto Kayak’s platforms.
“This acquisition leaves Wego as the largest remaining independent travel meta operating global flights and hotels businesses. I plan to leverage the extra flexibility and the true market neutrality this independence gives us to out-innovate and out-market our publicly listed competitors.”
The latest acquisition includes both the Cheapflights and momondo brands. Both brands are strong across Europe, with the former gaining ground in a few markets in Asia. Clearly it is momondo’s strength in Russia and Nordic markets and cheapflights’ strength in UK that are the attractions for Priceline Group, as they will help with the expansion of Kayak into Europe.
momondo has recently garnered attention for its brand building efforts through its DNA Journey campaign (200 million video views and a reach of 400 million) and talks by its managing director Pia Vemmelund, on the company’s mission to “open our world”.
Coming at a time of political divisiveness, the campaign which drives home the point that we are more linked than we know by DNA attracted was brilliantly executed and well-timed.
One competitor said, “Respect for what they have done.”
Hugo Burge: “New chapter for our business and our teams.”
Momondo Group CEO, Hugo Burge, commented: “This announcement heralds an exciting new chapter for our business and our teams. We look forward to becoming part of the KAYAK family within The Priceline Group, and are very confident that the blend of brands and our different strengths will help us to jointly pursue what we both believe most passionately in – building products users love.
“Our business is in great shape across the 30-plus markets in which we operate, and we’re looking forward to the opportunity to build on that further.”
This is Priceline Group’s biggest acquisition since OpenTable for $2.6 billion in 2014.
Whether the trend continues into Asia – and we predict it will – one thing is clear, those who put their bets on the metasearch model early have clearly been rewarded.
