Expedia acquires Venere but what does it mean?

You've probably read the news on Tuesday, Advent International has agreed to sell Venere to Expedia for an undisclosed sum (for now).

Let's look back at the recent history of the hotel booking engine Venere.com.

Venere was founded in Rome in 1995 by 4 friends and entrepreneurs (Gianandrea Strekelj, Matteo Fago, Marco Bellaci and Renata Sarno)

Advent International is an international private equity company that believed and invested in Venere back in November 2006 to gain 60% of the company shares. This was helped by the exit of first investor Kiwi II who use to have 33% of shares back in 2000. The remaining 40% was still in the hands of the 4 founders.

Advent International and Venere decide in February 2008 to acquire for a undisclosed sum a serious competitor in Italy, WorldBy.com. This move was justified to enhance Venere portfolio of hotels by an increase of 6,000 properties with 2.5 million registered users. Worldby is also a model in terms of bringing quality pictures to the end consumer.

Today, Venere has access to 29,000 properties that use the booking engine extranet to load rates and availability. Their model is retail meaning the consumer book on Venere and pay the hotel directly at the end of his stay. Then the hotel has to pay a commission to Venere (which is probably between 10 and 15%).

With this acquisition, Expedia has enlarged their hotel offering by 10,000 properties (after de-duplicating for properties already working with both Expedia and Venere). Content is gold, certainly when you have inventory loaded on your system and where you are maybe weak in certain countries (Italy maybe).

Having said that, the model of Venere is totally different from Expedia model. Expedia is on a merchant model where consumers pay Expedia at the time of the booking and comes to the hotel with a pseudo voucher.

It would be interesting to see in the future how Expedia is going to merge Venere content in Hotels.com and all their Expedia sites. How not to confuse the consumer where 2 models are clearly different? It's probably too soon to say at this stage.

At this stage, I would say Venere team will be alright for 1 year and will keep doing what they do best. Then, I won't be surprised if we start to see some shift in management, reduction of staff and consolidation of contracting and account management team. It is inevitable. Unfortunately. Time will tell...

And oh, I have forgot the most important reason why I think Expedia has bought Venere.com: to re-gain market share against Booking.com and please Expedia Inc shareholders. Hotels is where you make some money (commission, mark up, better yield, ...) not Air anymore. Apparently Expedia Inc. shareholders agree with this move.

Comments

[Susan]

The two others are Marco Bellacci and Renata Sarno :)

[Claude]

Thanks for this great post,

and what about Advertising on Third-Party Intermediary Sites >> the new business model from Expedia !!!

New rules and new games !

best regards

Claude

[Austin]

I hope that they don't change Venere's interface. I absolutely love using it to book hotels while I'm on the road in Europe. It has been so reliable that I won't even bother booking hotels except for my first destination...

[Gold IRA]

Expedia has enlarged their hotel offering by 10,000 properties.

[Nexpider]

Will suppliers with relationships with both companies maintain relationships/contracts with Venere and Expedia as two separate parties?

[Web Design Services UK]

Wow... I think it is a good news and it will be a profitable deal. Thanks for the information.