TUI Travel PLC, which specializes in vacation packages and destination services, acquired tours and activities startup Isango, triggering lots of questions about what the future holds.

The acquisition — the terms of which were not disclosed — seemingly injects some energy into the tours and activities sector in Europe, and sets up a culture clash between a traditional wholesaler with proprietary and legacy technology, and a newbie online, mostly direct-to-consumer player in Isango.

Isango will be part of the TUI Travel Accommodation & Destinations unit, which focuses on hotels, and destination services including tours, ground transportation, and cruise for travel agents, tour operators, and consumers.

Isango in TUI Travel fold

TUI Travel hasn’t provided extensive detail on how it will use Isango, but the assumption is that it sees the transaction as a technology play, helping it funnel some of its B2B destination services business in an online consumer direction.

A TUI Travel spokesperson tells Skift that TUI Travel made the acquisition to  “improve our portfolio of destination experiences” and for Isango’s “powerful technology platform.”

The spokesperson says the Isango brand will remain.

“We do have specialist destination services, but the experience they [Isango] have in the market is very valuable,” the spokesperson adds.

With some parallels to Expedia Inc., public company TUI Travel is determined to put new focus on its destination services i.e. tours and activities.

Unanswered questions about what went down

Tours and activities insiders are left with lots of questions about the acquisition.

UK-based Isango raised $8 million in 2008 in a Series A round from SPARK Ventures and Beringea.

Although Isango says the company is in hyper-growth mode, expanding into new markets, tour and activities insiders wonder if the transaction was a fire sale and more of an “acqui-hire” than a lucrative exit.

“It’s not like they were exactly killing it on the consumer side,” says an executive at another tours and activities company.

Isango didn’t immediately respond to a request for comment about the acquisition.

An upgrade for TUI Travel, but …

Isango’s technology certainly will amount to an upgrade for TUI Travel Accommodation and Destinations’ hotel-focused platform, but Isango’s API, for example, hasn’t wowed other companies that have dealt with it.

Although Isango has been testing mobile products internally, it doesn’t have a mobile app in the market.

The TUI Travel spokesperson says the Isango brand will remain, but it remains to be seen whether Isango gets swallowed up in the TUI Travel empire.

Next moves in European tours and activities

GetYourGuide isn’t considered in play at this point because it recently raised $14 million in venture capital funding, bringing its total funding to $16.5 million, and would have to earn an exhorbitant valuation to exit at this juncture.

City Discovery, privately funded and particularly strong in France, has flown largely under the radar, and could be a target.

There’s been some confusion about the deal that GetYourGuide made this week to provide its tour and activities products to TUI AG and travel agencies in Germany.

TUI AG controls TUI Travel, but they are different corporate entities.

Asked to comment on the TUI Travel acquisition of Isango, GetYourGuide spokesperson Lucie Meyer-Landrut says:

We are very pleased about the deal we announced on Monday with TUI Germany. TUI Travel Accommodation and Destinations’ deal with Isango has no impact on our partnership, and is not related to our partnership with TUI Germany.

Behemoths such as TUI AG are renowned for their internal-company political squabbles and turf wars, so the seeming contradictory moves aren’t entirely surprising.

Photo Credit: Isango is bringing its online tours and activities options to TUI Travel. Isango