Skift Take

DHISCO is not a barn burner of a hot internet company. But its acquirer RateGain has the hallmarks of becoming one in travel tech. DHISCO CEO Toni Portmann deserves praise for rescuing a company born from a troubled private equity carveout.

Hotel distribution tech company DHISCO is being acquired by RateGain, a travel technology company based in Noida, India.

Spokespeople for the two companies declined to comment but a memo from RateGain, obtained by Skift, confirmed the deal. The financial details of the acquisition were not immediately available.

Dallas-based DHISCO, which stands for the Distribution Hospitality Intelligent Systems Co., has been known to many hoteliers simply as “the switch,” an outsourced partner that helps hotels distribute their inventory and process transactions across various platforms worldwide.

According to the memo the company sent to commercial partners that Skift obtained on Thursday, RateGain claimed it has “one of the richest portfolios of long-tail distribution channels that covers more than 600 online travel agencies in the emerging markets of Asia and the Middle East. This is a great fit with DHISCO’s dominance in the distribution to large global channels.”

Last summer, Skift interviewed CEO Toni Portmann three years into stepping into the top job and just after the completion of a data center migration that took 2.5 years, 30,000 collective hours, and $10 million.

The technological architecture shift was led by chief information officer Bryan Bradley. It moved the company’s mainframe-based distribution technology to cloud-based services.

One project, for instance, turned data ingestion from an hours-long to a minutes-long process that the company claimed resulted in a 12 percent increase in bookings for hotel brands using the new system.

As a sign of the project’s success, consider these statistics: A year ago, the company said it made 107,241 properties available for distribution via 127 travel agencies and online travel sites and processed 13 billion shopping requests a month. Today it said it makes more than 514,000 hotels available and processes more than 18 billion transactions a month.

RateGain’s Rapid Rise

The commercial relationships as much as the technology may have been part of the appeal for RateGain in making this acquisition. RateGain helps travel brands maintain rate integrity across multiple points of sale online, helps them forecast demand and manage their online reputation, and helps them distribute their rates, too.

One of RateGain’s signature functions is to be a next-generation web scraper that can scrape native mobile apps, display, and many members-only offers that can usually only be seen by consumers signing in to a website — not just desktop website code like earlier web scrapers did.

Many of the world’s best-known hotel brands, such as InterContinental Hotels Group, Preferred, Kempinski, Mövenpick, Accor, and Okura Nikko, rely on RateGain to see if the rates on online travel websites compare well with the rates offered directly on their own websites.

RateGain helps customers including several brands in the Booking Holdings and Expedia Group portfolios also trawl online rates. So, too, do the five largest car rental groups: Hertz, Avis, Enterprise, Europcar, Payless, and Budget, and several airlines, such as Lufthansa, Singapore Airlines, and Indigo.

To our best understanding, RateGain is the only company to provide so-called closed loop parity intelligence — essentially a more sophisticated and nuanced tool for rate integrity management — in addition to rate parity benchmarking that some competitors offer.

In 2015, RateGain received a minority investment from TA Associates that amounted to $50 million according to media reports at the time. The company had been previously bootstrapped since its founding in 2004. The private equity firm still backs the company.

Under CEO Bhanu Chopra’s direction, RateGain invested in its technology and signed up a clientele of household name travel companies for its signature rate integrity products for monitoring and benchmarking online rates.

It is unclear if Portmann would remain with DHISCO after the integration was completed. She had been appointed as a turnaround artist, having previously helped be a CEO of distressed technology companies outside of travel like Stream, CAS Partners/Riverstone Residential, and LockIN.

It looks like Portmann, along with chief financial officer Charles Loop, succeeded in guiding DHISCO to a sale. For more details on the company, see: CEO Interview: Distribution Firm DHISCO Tries to Bounce Back for the Post-Hotel Era.

The news of the acquisition was first reported by PhocusWire.

CORRECTION: An earlier version of this story had a headline that incorrectly stated the acquisition was based on RateGain’s desire to expand its travel intelligence services.

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Tags: mergers and acquisitions, RateGain

Photo credit: Toni Portmann, shown here at the Dallas headquarters of travel technology company DHISCO, was hired as CEO three years ago to turn around a struggling company. Today the business was acquired by RateGain. DHISCO

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