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Lastminute.com will remain the last man standing of what was once Travelocity — but only until Sabre can find a buyer in a fire sale because keeping it makes no sense at this juncture.
After disposing of much of Travelocity’s global assets in 2012 and 2013, all of that talk from parent Sabre about pursuing a standalone strategy for the final puzzle piece, the UK’s lastminute.com, is mostly just chatter.
Sabre tried to sell lastminute.com for next to nothing during 2012 and 2013 when it was off-loading Zuji, Holiday Autos, Travelocity Nordics, and Travelocity Business, all at a loss, according to a source familiar with one such lastminute.com deal, which fell through.
Acquired by Sabre for more than $1 billion in 2005 as Travelocity’s go-to brand in Europe, the chief asset of London-based lastminute.com these days is some nice brand recognition in the UK and France, where its market share is concentrated, and a decent reputation elsewhere in Europe.
With 225 employees and access to only 80,000 hotels at the end of 2013, lastminute.com has vastly underperformed its peers over the years in part due to a lack of focus from an airline-centric global distribution system in Sabre, as well as lastminute’s own heritage of serial acquisitions and disparate, legacy technology systems that weren’t integrated well with Travelocity.
Michelle Grant, research manager at Euromonitor, says lastminute.com did $2.6 billion in gross bookings in 2012, the latest statistics available, ranking 13th in Western Europe, well behind market leaders Thomas Cook (1), Booking.com (2), TUI (3), and Expedia (8).
“Not very impressive,” Grant says of lastminute.com’s performance. “The bulk of its bookings are in the UK, followed by France. Expedia and Booking.com have blown past it in Western Europe and the UK, although Expedia trails lastminute.com in France.”
Lastminute.com co-founder Brent Hoberman, who’s no longer associated with the company, calls lastminute.com “an under-utilized asset.”
Hoberman says lastminute.com doesn’t have a worthy mobile app, and didn’t adapt with the times after the sale, particularly in altering its hotel business model.
Who would want to buy lastminute.com and take on its myriad challenges?
It wouldn’t seem to offer much to Booking.com or Expedia, for example.
Grant speculates that Odigeo, with its eDreams, Go Voyages and Opodo brands, could “be tempted at the right price to take a risk to get an established brand in the highly competitive UK market.”
On the other hand, if Odigeo were truly interested, you’d think it would have already participated in the Sabre fire sale as Odigeo currently is preoccupied with an IPO try in Europe,
Without an apparent buyer, Sabre, which has offloaded most of Travelocity’s North America website operation to Expedia, and last week sold Travelocity’s private label business to Orbitz Worldwide, seems to be pinning its hopes on turning last minute.com into a Hotwire-like last-minute specialist.
But with Sabre obsessed with its own IPO try at the moment, and having already shed the bulk of Travelocity’s assets over the last two years, its so-called standalone lastminute.com strategy seems half-hearted at best.