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If recent patterns hold up, there won’t be too long a wait before there’s an answer from a competitor to the Priceline Group’s blockbuster acquisition of OpenTable.
The usual suspects with wads of cash, credit, or Bitcoin — including Expedia, Google or TripAdvisor — are likely considering their next chess moves.
After the announcement June 13 that Priceline agreed to acquire OpenTable for $2.6 billion, it is easy to sense a certain euphoria among some players as further merger and acquisition activity seems as assured as the prospects of landing a restaurant reservation on a Monday night. Priceline’s stock took a light beating, falling 3%, but that shouldn’t deter competitors’ next strategic moves.
Don’t forget that Expedia Inc. agreed to acquire German metasearcher Trivago in December 2012 — only about six weeks after Priceline announced that it would purchase rival Kayak.
It’s very possible that TripAdvisor played a role in kicking off the current round of consolidation when it disclosed its relatively smallish acquisition of France-based restaurant reservations platform Lafourchette, which some call an OpenTable for Europe, in May 2014, although the Priceline-OpenTable deal likely was already in the works.
“The news about Priceline and Open Table makes all of us here feel like things are bound to get extra-interesting for anyone serving travelers in-destination,” says Barrie Seidenberg, CEO of tours and activities provider Viator.
Viator is a privately held company, but in certain corners of Wall Street there was a certain giddiness afoot.
OpenTable’s stock price spiked 48.3% on June 14, the day of the deal announcement, to $104.48, and the TripAdvisor of restaurants and local business, Yelp, saw its stock price surge to $74.92, a nearly 14% bump.
We’ve previously speculated about a potential Priceline acquisition of vacation rental leader HomeAway, and if the theory of Viator’s Seidenberg that companies serving travelers in-destination are shining bright, then you’ll understand why HomeAway’s stock price shot up 7.32% to $32.25 on the day of Priceline’s OpenTable announcement.
Certainly companies such as Yelp look particularly appetizing as the next piece of someone’s wedding cake, perhaps that of Google, which already owns Zagat, although Yelp’s $5.36 billion market cap would be a doable, yet hefty tab.
For Priceline, OpenTable may have been a relatively cost-conscious alternative to Yelp, and in OpenTable, which is developing a cloud-based solution to bring restaurant reservations online and has a mobile payments system, digitally adept Priceline may have found a kindred spirit.
TripAdvisor CEO Stephen Kaufer said recently there’s little excuse “for the lack of attention we’ve spent on restaurants and attractions,” and he added that TripAdvisor plans to allocate the resources in 2014 to begin to bring restaurants and attractions up to speed for the company.
Seidenberg of Viator notes that based on TripAdvisor’s recent market activity [such as the acquisition of Lafourchette] and Kaufer’s public comments it appears as though TripAdvisor is “poised to do lots of new things across the entire travel spectrum.”
“We’re excited about our leadership position in the tours and activities sector, and are looking forward to what promises to be a very interesting year,” Seidenberg says.
Beyond restaurants, if the OpenTable acquisition signals additional consolidation and larger companies getting more serious about tours and activities in-destination, then Berlin-based GetYourGuide, which already is a TripAdvisor partner, and companies offering B2B tours and activities solutions, could be in play.
“TripAdivisor is definitely growing more into the space, but it is still very early days,” says Johannes Reck, CEO of GetYourGuide. “Maybe they will acquire someone in the space, but maybe they will focus more on other stuff first.”
Asked if GetYourGuide has been the subject of any nibbles from TripAdvisor, Reck said: “We are totally committed to our long-term strategy of building the world’s biggest and best marketplace for finding great things to do in the destination.”
“The current mobile revolution that we are seeing is breathtaking in pace and we are 100% focussed on emerging as the winner out of this race,” Reck says.
Expedia could be heard from before the next consolidation binge plays itself out.
Expedia hasn’t done much on the dining front, and could be energized by what Priceline sees as a very lucrative and big new market for online travel agencies.
Getting into the restaurant reservations space through an acquisition could be a nice add-on for Expedia’s leisure travelers, but also has big potential for Expedia Inc. company Egencia’s business travel clients.
Expedia could soon make a move, just as it did with Trivago following Priceline’s acquisition announcement regarding Kayak.
On the other hand, Expedia could keep its proverbial head down and focus on global hotel expansion, hoping that Priceline’s OpenTable acquisition a little more than a year after Priceline acquired Kayak would prove to be an overwhelming distraction and stumble.