In what looks to be the biggest deal yet in the tours-and-activities distribution space, Booking Holdings said Thursday that it will acquire U.S.-based, experiences booking-software provider FareHarbor.

The FareHarbor acquisition will help provide content to expand Booking.com‘s upselling of consumers on tours after the consumers have already bought another product from the online travel giant.

Terms of the deal were not disclosed. FareHarbor, headquartered in Hawaii, claimed to have generated more than $50 million in revenue last year — roughly double the revenue of a year prior. It had more than 200 employees at the time of the acquisition and claimed to be profitable.

The price tag could be relatively “hefty” — as in more than $300 million — speculated one source who is knowledgeable about the tours and activities sector. The reason is that FareHarbor has a substantial footprint in the distribution and reservation management parts of the sector.

TripAdvisor is believed to have made several offers, including one last year, to buy FareHarbor for well over $200 million, including cash, stock, and incentives

TripAdvisor’s loss of the deal may not be a complete wash, though. “While Booking Group’s size, heft, and sales presence could allow it to sign-on activity partners directly, we also see an opportunity for TripAdvisor to partner with Booking and Expedia for distribution, said research analysts at investment bank SunTrust Robinson Humphrey.

TripAdvisor uses FareHarbor, along with other similar providers, to receive content from operators.

It may wait long to make its own countermove to defend its market leadership in this sector, one source speculated.

Booking Challenges Its Consumer-Facing Rivals

In an interview published by Skift this week, Booking Holdings CEO Glenn Fogel said that the star brand in his portfolio, Booking.com, is in 40 cities now offering tours and activities. The brand launched a consumer offering in 2016.

Fogel said the company is “considering doing standalone tours and activities bookings.” His company is in a competition with other players in the space.

The acquisition comes on the heels of the Skift Table’s report that reservations provider Reserve has struck a deal to be the exclusive provider of restaurant reservations on Expedia.com in the U.S. beginning in May. Expedia Group’s activities and attractions unit, Expedia Local Expert, is leading that integration of 1,000 U.S. restaurants.

Both deals — FareHarbor and Reserve — accentuate an accelerated focus on in-destination activities, whether they are visiting a hot restaurant or tours and attractions.

“We wouldn’t be surprised if Expedia looks to make tuck-in technology acquisitions aimed at expanding both supply and distribution,” said the analysts at SunTrust Robinson Humphrey. “We also believe that the company will likely look to increase its cross-sell and packaging efforts on the marketplace as well as with HomeAway to drive monetization.”

Meanwhile, Airbnb officials recently said that they plan on being in 1,000 cities with their Experiences product by the end of this year, and they project profitability in Experiences by 2019.

This spring TripAdvisor said its recently rebranded Experiences unit booked its 1 millionth transaction, making it the leading consumer seller of activities worldwide.

Some industry observers may perceive Booking Holdings’ move as an effort to undercut smaller rival TripAdvisor which, when it comes to consumer sales of activities, is the world leader. The purchase denies TripAdvisor’s Experiences unit a chance to enhance its relationship with suppliers and to make the end-to-end technology experience more seamless between suppliers and consumers.

B2B Startups Become Popular

But just as significantly, the move suggests that Fogel is interested. in buying business-to-business (B2B) distribution technology companies.

That’s a category of startups that Booking Holdings has only shown sporadic interest in, such as with the acquisition of some small data-focused startups Evature and Qlika, hotel revenue management service PriceMatch, hotel digital marketing services Buuteeq and Hotel Ninjas, and rental car distribution platform TravelJigsaw.

The renewed interest in B2B will be music to the ears of many venture capitalists that have recently invested in travel technology startups focused on providing reservation tools or distribution.

Booking Holdings passed over other providers of technology to tours operators, such as Peek — a company that had raised significant venture capital and acquired rival Zozi last year — unlike family-owned FareHarbor which was almost entirely funded out of operations revenue.

Who Might Be Next?

FareHarbor’s network of partners tends to focus on North America. Booking Holdings may want to plug the geographical gap by acquiring another distribution and reservation software player from elsewhere. It also bolsters Booking’s emphasis on European tours to date from Booking.com.

One to consider is TrekkSoft, which claims to be the largest B2B provider of reservations and payment software to Europe’s attractions industry by supplier connections. But Palisis, another Swiss company, is probably the largest globally by transactions processed as a tech provider.

Since its founding in 2012, TrekkSoft has raised more than $8 million over two rounds and claims to be profitable. TrekSoft distributes many products through direct marketing organizations like Fjord Norway and Emilia Romagna. This winter it acquired Digitickets, a provider of a U.K.-and-Ireland-focused ticketing software suite for visitor attractions.

Another company to consider is Bookingkit, which provides reservation, channel management, and other software tools to tours and activities operators, and this winter completed an undisclosed Series B funding round in the “single-digit millions” and that it has raised a two-digit million amount across all of its fundings. It focuses on operators in Germany, Austria, and Switzerland.

Regiondo, a Munich-based provider of cloud-based operator reservation and distribution services, also has a strong position in Europe and recently added Chinese distribution and WeChat Pay and Alipay options.

A fourth is Rezdy, based in Sydney and having a relatively strong Asia Pacific inventory. It has raised $9.6 million, to date, according to Crunchbase.

Notable players in B2B tech include Bokun, Musement, Once There, Palisis, Redeam, Regiondo, Rezdy, Rezgo, Tiqets, TourRadar, TrekkSoft, Trip.me, and Veltra.

Other companies that offer B2B tours and activities tech systems for suppliers and marketplaces are Adventure Bucket List, Bookeo, BookingBoss, Checkfront, Coras, Varitrip, and Xola.

Thursday’s deal represents the first winner in a battle between sellers of software to tour operators that often turned nasty and confrontational in recent years.

FareHarbor got a significant leg up on rivals by aggressively signing up tour operators left stranded in 2016 when a rival provider Zerve shut down.

Experiences Become a Main Attraction

More activity may be in the works for the sector. Skift has heard from at least one private equity firm that it has been researching the sector to see if it can roll-up software providers worldwide and marry them to other distribution chain partners, such as by plugging in missing services, such as payments gateways.

For venture capitalists and entrepreneurs across the sector, it will be notable that, last autumn, FareHarbor debuted a predictive pricing platform powered by artificial intelligence to help operators select optimal rates for activities. Expect other companies to talk up their machine learning capabilities in their pitches and slide decks this year.

But before we get to AI, the sector will have to get past paper and Post It notes. “The fragmented market of the providers has to be digitized, because there is still a lot of paperwork going on,” said Lukas C.C. Hempel, who is the founder and managing director of Bookingkit.

On that point, consider March 2018’s $7.7 million Series A funding of Redeam, whose signature service is automating paper voucher redemptions for attractions.

As for FareHarbor, its CEO, Lawrence Hester can finally take a break with a Mai Tai after having spent late 2017 attempting to woo backers. He finally has an unpublicized payday for a project he started with his brother Zach and that, in early days, required many nights sleeping on his 21-year-old girlfriend’s couch to keep costs down.

Photo Credit: FareHarbor co-founders Lawrence and Zach in the early days. They founded the company in Hawaii in 2013 but on Thursday sold it to Booking Holdings. FareHarbor