Financial Technology

Financial Technology

July 06, 2012

Yatra: The Travelguru of India's OTA Market

“Guru” is a Sanskrit word used to describe a teacher or an expert in a particular field, so it seems appropriate that the travel agency’s services you would employ when planning a trip to India would be “Travelguru.” In India’s OTA market, many agency giants are well aware of the potential of this company that expands beyond its clever nomenclature.

Three years ago, Travelocity acquired Travelguru, but then placed it back on the market for Online Travel Agencies (OTAs) to battle over. Travelguru would be a desirable acquisition for any OTA because of its solid relationships with more than 7,000 hotels across the globe. Travelocity’s decision to give up Travelguru has caught the attention of industry insiders and market watchers. A CEO of an unnamed leading OTA commented to the press, “Very odd that they would sell this asset.”

While market watchers muse over this unconventional business move, India-based OTA, Yatra closed the deal with Travelguru, making Yatra the proud new parents of Travelguru.

Yatra is keeping many of the details involving its acquisition of Travelguru confidential. But sources claim that the transaction was handled in cash, once again pointing to the unconventionality of this recent market event. But one thing that is not exactly a mystery for OTAs is how this accumulation will leverage Yatra over the competition, namely, MakeMyTrip and Cleartrip.

Travelguru received over $25 million in venture capital upon its market debut. Expedia (News - Alert) is mentioned as being among the OTA giants interested in obtaining the company. But Yatra, it seems, has been busy steadily growing their business by acquiring other companies around India and Asia in recent years. A reason some people speculate as to why Travelocity relinquished its ownership of Travelguru is because of the company’s focus on the global market as opposed to Travelguru’s and Yatra’s focus in India.

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Edited by Rachel Ramsey

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