Alibaba’s First Post-IPO Investment is $457 Million in Hotel Tech Firm

After raising $25 billion in its just-completed IPO, China commerce company Alibaba acquired a 15% stake for around $457 million in hotel-technology firm Beijing Shiji Information Technology Co., solidifying the position of business to business hotel solutions as one of the hottest merger and acquisition categories of 2014.

No, Alibaba, which already had $8.5 billion in cash prior to the IPO, hasn’t acquired Expedia Inc., despite the rumors, but bought into public company Beijing Shiji, which provides property management systems and other technologies to hotels, and since 2003 has been the exclusive reseller of MICROS-Fidelio in China.

The $457 investment is said to be Alibaba’s first since debuting September 19 on the New York Stock Exchange.

Alibaba’s investment in Beijing Shiji, although only a minority stake, would qualify as being among the larger travel-related acquisitions so far in 2014 as outlined in a Skift Trends report on investments and startups.

And several of these 2014 acquisitions, including MICROS Systems (Oracle $4.6 billion), TravelClick (Thoma Bravo, $930 million), Newmarket International (Amadeus, roughly $430 million), and Buuteeq and Hotel Ninjas (the Priceline Group, $98 million, net of cash acquired), related to tech and marketing solutions for hotels.

Earlier this month, Sabre acquired hotel-tech provider Genares for an undisclosed sum.

Alliance With Oracle’s MICROS Systems

Beijing Shiji, which saw its market cap soar to $3.21 billion on the Alibaba news, works with more than 400 hotels and is the preferred vendor in China for Grand Hyatt, Sheraton, Hilton, Shangri-la, Marriott, Peninsula and Accor, the company states.

MICROS Systems, which is allied with Beijing Shiji in China, had some 30,000 property management systems installed through the end of 2013, with the vast majority using its OPERA Software and Fidelio Suite8 products.

Since Alibaba is only taking a minority stake — for now, at least — in Beijing Shiji, it may be premature to speculate on what this means for Alibaba’s travel businesses, including Taobao Travel, and Alibaba’s investments in outbound travel sites Qyer.com and 117go.com.

An outright acquisition, though, could put Alibaba on a path similar to that of Booking.com, which is gearing up to offer its hotel distribution partners both front- and back-end technologies with its acquisitions of Buuteeq and Hotel Ninjas, and China’s Qunar, which offers hotels a booking system to bring their properties online.