Booking.com has a substantial presence in the Middle East, but there is a vacuum that Wego Group and homegrown players could begin to fill over the next few years.
Singapore-headquartered Wego has traditionally been a regional metasearch business, where travelers search for trips and book them elsewhere, but the pending acquisition it announced this week of Cleartrip’s Middle East business from India e-commerce giant Flipkart Group would create a more diversified online travel group.
“Our ambition is to build one of the world’s great online travel companies with MENA (Middle East and North Africa) at the core and with emerging markets more broadly as the theme,” Wego co-founder and CEO Ross Veitch said Tuesday. Wego is dual headquartered, with Dubai as the other location.
If the deal passes regulatory muster in the second half of 2022, then Wego would rename itself the Wego Group and would acquire India-based Cleartrip’s Middle East operations, including Saudi Arabia-based Flyin.com. The deal also would come with a partnership and technology pact with Flipkart, often described as India’s Amazon, which seeks to focus on its core e-commerce operations.
Unlike Wego’s main metasearch operations, which refer traveler leads to airlines, hotels and online travel agencies to book, Cleartrip and Flyin are online travel agencies that crunch their own bookings, and thus the Group would have a broader scope than travel search.
“We’ll run the OTA (online travel agency) brands at arms length, same as Kayak with Booking Holdings, Skyscanner within Trip.com, and Trivago with their large Expedia ownership,” Veitch said.
Flipkart acquired Cleartrip, both India-based companies, in 2021. Flipkart will continue to operate Cleartrip in India, which is not part of the Wego deal.
To be sure, Wego, founded in 2005 in Singapore and venture-backed by Tiger Global, Crescent Group, Square Peg Capital and others, would be starting relatively small in its bid to be a regional force in online travel.
Veitch said the combined companies, namely Wego and Cleartrip Middle East, would have recorded nearly $2 billion in gross booking value in 2019 had they been married at that time. Cleartrip, including its India operations which are not part of the deal, claimed $1.5 billion in gross booking value in 2019.
Wego, on its own, reportedly notched $1 billion in gross bookings in 2017 with around half sourced from its move into the Middle East a few years earlier.
“We expect to return to that run-rate by end of this year,” Veitch said, adding “this is us doubling down on the MENA opportunity.”
To put that pro forma $2 billion in gross booking value from the combined companies in 2019 into perspective, Expedia Group notched $107 billion in gross bookings that year. A somewhat more relevant comparison would be to another regional online travel group — albeit in Europe as opposed to Asia Pacific and the Middle East — namely LastMinute.com Group. It did $2.7 billion in gross bookings in 2019.
“Cleartrip is strong across the GCC (Gulf Cooperation Council), particularly with Indian expats,” Veitch said. “Flyin is strong in Saudi.” The Gulf Cooperation Council includes the United Arab Emirates, Saudi Arabia, Qatar, Oman, Kuwait and Bahrain.
Cleartrip entered the Middle East from its India base in 2010, predating Wego’s debut in the region by several years. They already are office neighbors with both companies operating regional headquarters in Dubai Internet City.
The Middle East “is well-placed to be the engine of growth for travel both as a destination and as a highly mobile, digital-savvy demographic looking for choice and value, said Stuart Crighton, co-founder and head of Cleartrip’s international business, in a statement. “By joining forces with Wego, we are able to offer everything from search to service and to contribute meaningfully to that story.”
The Cleartrip brand would continue to operate in home-base India as part of Flipkart Group.
Veitch is clearly upbeat about the Wego Group’s prospects, although Booking.com has had a substantial presence in the Middle East for years.
“I reckon the MENA region will produce several online travel unicorns over the next 5 years or so, and I think the Wego Group will likely be the first,” Veitch said.
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Photo credit: (From left) Ross Veitch, co-founder and CEO of Wego, and Stuart Crighton, co-founder and head of Cleartrip's international business. Wego plans to acquire Cleartrip's Middle East business.