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Gilt Groupe’s flash deals and hotel booking site Jetsetter has found a home and the announcement will come as soon as next week, ending a months-long search to find a buyer, Skift has learned.
The most likely buyer is Tripadvisor, our sources indicate, though we have not been able to definitively confirm that.
Over the last few months, we have heard of every possible buyer including Travelzoo, Expedia, and American Express (as well as the usual collection of media companies like Hearst and CondeNast), but none have come to fruition, mainly because the asking price by Gilt was too high.
The search for a buyer had been under way at least since late summer 2012, and Jetsetter, which gets its revenue from a mix of flash sales and retail hotel sales, has been piling up around $2 million in annual losses with a topline of around $25 million.
Gilt had initially been looking for an exorbitant $50 million to $100 million sale price, and the final sale price that TripAdvisor paid is undoubtedly a fraction of that.
TripAdvisor isn’t known for blockbuster acquisitions, and specializes in strategic acqihires.
Despite Jetsetter’s ability to rise above the pack of competitors and copycats, observers and critics have argued the flash-sale business was unsustainable because it relied on a heavy dose of editorial involvement. Jetsetter dispatched writers and photographers to hotels periodically, as it explains on its site:
You wouldn’t suggest a friend book a hotel you hadn’t stayed at. Neither would we. Our correspondents — over 200 journalists from the world’s top travel publications — sleep in the beds, test the shower pressure, bend the concierge’s ear and knock back the cocktails (it’s a hard job, etc).
TripAdvisor’s likely acquisition of Jetsetter is complementary to its SniqueAway business, which SniqueAway execs described as a Jetsetter with TripAdvisor-approved properties when it launched in 2010. SniqueAway is run by TripAdvisor’s Smarter Travel Media unit.
Not only would Jetsetter’s relationships and staff expertise boost SniqueAway, the likely acquisition would also eliminate a competitor.
Founded by Kayak marketing alum Drew Patterson in 2009 at the height of the flash deals craze, Jetsetter created a very attractive UI and iPad app, emphasizing upscale hotel sales via flash sales and routine retail sales for hotels in far-flung destinations.
Gilt, meanwhile, is considering an IPO, and Jetsetter doesn’t fit into its plans. The sale comes as Michelle Peluso, former CEO of Travelocity, took over as CEO of Gilt Groupe this week.
Sources say Gilt was very close to completing a sale of Jetsetter to another party in December 2012, but the deal didn’t get signed. Insiders hope that the pending transaction isn’t a fire sale, but it could be.
Many Jetsetter staffers have already left the company, and others are looking.