Travelguru to acquire Desiya for US$25m

After consolidation in the Indian aviation industry, it is the turn of online travel intermediaries to get on with the same.
20 Dec 2007

According to leading financial daily The Economic Times, Travelguru is acquiring Delhi-based B2B hotel portal Desiya for $25 million (around Rs 100 crore). Travelguru is also scouting for an offline travel player, it added.

“Desiya will run as independent subsidiary of Travelguru,” Ashwin Damera, CEO and co-founder, Travelguru told the publication. “Next year we will break-even with a turnover of $80 million. Around 90% of our revenue comes from hotel bookings unlike other websites where major chunk of the transactions are for air-tickets,” said Damera.

Travelguru and Desiya will be completed by January, technology integration will take around four months. By end of this fiscal Travelguru has projected a turnover of $42 million.

During EyeforTravel’s second conference in Mumbai this year, concerns related to functioning of OTAs were quite obvious. Questions were raised about the viability of so many players, about VC funding and how can OTAs focus on `cash flows’.

Travelocity’s MD in India Himanshu Singh had then shared: “Publicly available data suggests that the top three OTAs in India are spending in excess of USD1 million a month on marketing, and we see consumer cash back offers touching 50%. This coupled with high fixed costs and growing competition will definitely put pressure on existing players.”

Source: www.economictimes.com

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