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Online buyouts: What do they mean?
In the past week, the online travel industry was surprised by two major industry buy outs.
So what does it mean?
The consensus: continuing consolidation.
The recent purchase of Worldspan by Travelport Ltd. for $1.4 billion in cash was the first big industry shock. Rumors had been circulating that it was in fact Amadeus who were in acquisition discussions with the troubled GDS, wrote eyefortravel.com.
Travelport CEO Jeff Clarke, and Worldspan Chairman, President and CEO Rakesh Gangwal’s commented at a recent conference that consolidation in the industry is to be expected.
Now Travelport will comprise Worldspan, Orbitz and Cheaptickets under their umbrella, further solidifying their position as the only GDS in all three main regions.
Other news is that Sabre holdings are now for sale. With a handful of private equity firms involved in the negotiations, a realistic price tag for the sale is somewhere near $4 billion, according to news reports.
Silver Lake Partners and Texas Pacific Group seem to be the likely owners of the future.
In addition to raising the specter of consolidation, the developments seem to confirm the rising popularity of direct bookings, which are reducing the need for traditional GDS’s, say industry analysts.
Report by David Wilkening
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