Evan Philip, March 10, 2015
Bellevue-based Expedia, Inc. recently announced that they would be making a $270 million minority equity investment in Latin American online travel company Decolar.com. According to a press release by Expedia, this investment will strengthen their existing commercial relationship with Decolar and will benefit exiting hotel partners and customers of both companies. This deal will broaden “Expedia’s powering of Decolar’s hotel supply and introduces the opportunity for Decolar to provide Expedia access to its hotel supply in Latin America”. Decolar is the leading online travel agency in Latin America and has an established presence in 21 countries in the region.
The equity investment by Expedia will help both companies become more capable to serve customers’ needs in the highly competitive global travel market. The deal follows a string of rapid acquisitions totaling more than $2.5 billion: Wotif Group in Australia, competitor Travelocity, and a proposed deal to acquire competitor Orbitz. The Puget Sound Business Journal reports that these acquisitions could give Expedia control over 75% of the U.S. online travel agency market.
Expedia’s investment in Decolar demonstrates their determination to surpass their competitor, Priceline, as the number one online travel agency in the world. Expedia is currently in second place, but if their rapid expansion efforts continue, this could change. The company’s annual revenues total $5.8 billion, a significant increase from $4.8 billion in 2013, according to Bloomberg Business. If this Greater Seattle-based company continues their rapid expansion strategies, we do not expect to see their exponential growth come to an end anytime soon!