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A hotel-technology firm, the Concur-funded Nor1, has acquired business-to-business tours and activities startup Flextrip in a downpayment on the prospect that hotels will eventually get to addressing ancillary services in a big way.
Santa Clara, California-based Nor1’s primary products are tech solutions that enable chains and independents, ranging from Hilton and InterContinental to Hyatt and Kempinski, to target guests and add ancillary revenue from things such as room upgrades.
Founded in 2010, Boulder-based Flextrip, which raised just $400,000 in seed funding, operates a B2B tours and activities network geared to provide ancillary revenue for its customers.
Nor1 plans to integrate Flextrip technology and its tours and activities network into Nor1’s hotel ancillary services program as a way to provide hotel clients with even more revenue opportunities, a Nor1 spokesperson says.
We’ve been writing about soft landings in the travel industry, where startups get “acquired” without making a huge impact or being very successful. Sometimes they are bought for a brand (Jetsetter), technology (CruiseWise), or just as an acquihire (Wanderfly).
Nor1’s acquisition of the three-employee Flextrip looks like another soft landing, this time for a B2B tours and activities startup. Flextrip investigated other larger strategic considerations earlier this year, and even came close to one larger deal to get acquired and investment by a large consumer operator, but couldn’t close it, our sources say.
Meanwhile, you’ve heard the refrain for years now: Hotels are on the cusp of offering optional services in the mold of what airlines have done so successfully.
But, so far, as we reported several months ago, hotels have yet to embrace the fee binge, other than some outlier resorts with their gotcha tack-ons, and the lodging industry has been focusing instead on a way they can make the most money — raising room rates.
Nor1 is hopeful that hotels will get more serious about ancillary revenue opportunities, and the with the advent of mobile, the combined companies will be able to provide targeted tours and activities offers to guests in a much larger way.
“It’s not just about enabling our hotel partners to offer tours and activities to their guests,” says said Nor1 founder and co-CEO Jason Bryant. “It’s about synchronizing precise tour and activity offers into a much broader offer set across the reservation life cycle.”
Flextrip’s three employees will remain in Boulder and join Nor1.
Terms of the acquisition were not disclosed.
Founded in 2004, Nor1 has attracted some $17 million in total funding, including $9 million from Concur’s Perfect Trip Fund.