Trip.com Group's Acquisition of Travix Hints at Appeal of Smaller Travel Agencies
Skift Take
Smaller online travel agencies try to make money by grabbing nickels and eurocent coins ahead of the steamrollers of global advertising behemoths. The underreported story of why China's largest travel company acquired a tiny Dutch travel group highlights the phenomenon.
Trip.com Group bought online travel agency group Travix from corporate travel giant BCD Travel in December. Regulators okayed the sale last month, though only Dutch media noticed. The companies didn't disclose the price of the transaction.
The deal gave the Chinese travel titan an Amsterdam-based set of brands, including Vayama, Vliegwinkel, and CheapTickets.nl.
Trip.com Group is coy about why it bought the company. Here's a look at some likely rationales. Plus, we'll consider which other European companies might be targets for mergers and acquisitions by online travel giants and private equity firms.
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One rationale for Trip.com's interest in Travix may be the Dutch company's approach to selling plane tickets. Some backstory, first: In 2015, Ctrip, the company's operating name at the time, bought Travelfusion, a tech vendor that powers searching, booking, and payments for airlines that build connections with travel agencies. But Travelfusion has little automation for changing or canceling tickets. Travix has been solving some problems Trip.com Group's Travelfusion misses. Last year, the company began mixing newer ways of selling fares together with older ways with easy comparison of both. It got help for this with technology from Amadeus, the Madrid-based travel software giant. The system promises to skip the typical custom technical work and commercial negotiation that an agency needs to sell an airline's "fare families," or bundles of plane tickets with other perks. Airlines want to sell their fares as they like. So they want more technological control over how third-parties sell their tickets and related upsells, like extra legroom seats. Dutch airline KLM, for instance, waives its $24 (€22) roundtrip booking fee for any travel agent that uses its preferred technical connections, such as ones via Travelfusion. Trip.com Group may have other reasons for wanting Travix, of course. It may believe Travix is better at making use of data than the average small online travel agency group. Data savvy matters for agencies. Flight sales are low margin. So upselling and packaging deliver most of the profits. Yet agencies often struggle to tease out data to learn how to upsell effectively. Five years ago, Travix had a