WorldRes acquired by TravelHero - but why ????
WorldRes used to be the first hotel online search engine back in the early days of 1995 founded by Greg Jones (13 years ago!!!).
I remember this company very well. I was finishing my studies at IMHI/Essec Business school in 1999-2000, and I attended a conference at our school (I believe it was the IHRA conference). One of the speaker was from WorldRes (can't remember who it was) and was explaining how the Internet changed the dynamics of reaching people in the hotel world. And also how hotel bookings were migrating from phone towards online.
WorldRes was born and everyone thought it was simply THE dogs bollocks online hotel company. For whatever reasons (bad decisions, bad strange management, difficulties to manage costs...), the company didn't survive the Internet crash in 2001 and was literally loosing millions of dollars. I don't even remember it that company ever made a profit in any quarter. The planned IPO never happened and investors in the company started to worry.
WorldRes was beaten by bigger and clever companies such as Expedia, Lastminute, Travelocity and more importantly was loosing against new entrants in the online hotel space like ActiveHotels, Booking.com, HRS and of course Hotels.com.
After a lot changes in the management and subsequent redundancies (local offices were closed i heard), 2003 saw the renaissance of WorldRes as a joint venture with 3 leading hotel chains:
- Accor who already invested in the company back in 2000
- Six Continents (now known as Intercontinental Hotel Group with brands like Holiday Inn)
- Hilton International (Hilton Europe was a separate company from Hilton Corporation in the US)
I quote the former CEO of Accor "We have been a WorldRes partner and investor since 2000. They continue to interface with our central reservation system, thus using the best technology for selling our hotels online. We have agreed to invest and promote WorldRes Europe as the optimal means to find and book our hotels online. WorldRes Europe will make our hotel brands available to anyone with online access, including Web sites, call centers, tour operators and travel agents."
This sounds as a great idea but as we know it, a joint venture made with your competitors cannot always work (Andbook.com for instance was another failure on its own for example) and most of the time can go terribly wrong. A few years went by...
In 2005, when everybody forgot about WorldRes and thought the website was well buried, we hear that an Irish company Web Reservations International (WRI) buys WorldRes for an undisclosed sum. CEO and founder of WRI Ray Nolan says: "WRI has built a successful and profitable budget accommodation business, and this acquisition will significantly broaden our operations. We look forward to applying our unique business model to the global hotel market. We believe our emphasis on value and clarity will be highly attractive to existing WorldRes hotels and anticipate growing the WorldRes business as a part of WRI."
So I believe WRI saw some great potential to make WorldRes profitable and bring more distribution partners. This sounded like a big challenge for the Irish company knowing that after 10 years of of Operations, WorldRes was still struggling to achieve profitability and also hardly raised their profile in the online travel space. Yes the inventory was there (30,000 hotels at that time before the acquisition) but what about consumers? How come other local new entrants were making much more noise (again ActiveHotels in the UK, Venere in Italy, HRS and Hotel.de in Germany, Booking in the Netherlands...) and seemed to get it right compared to the old brother WorldRes?
16 December 2008, we hear that WorldRes is acquired by a total stranger in my eyes called TravelHero. According to the press release in M-Travel and HotelMarketing.com, TravelHero based in Scottsdale, Arizona was founded by Rob Lamb in 1995 (same year as WorldRes) and has developed and operates the TravelHero online travel planning (I heard about StayPlanner, GoPlanIt but never read anything about TravelHero) and distribution system in addition to other proprietary reservation products and services including ResHero, EventHero and GolfHero. Again the deal doesn't say anything on the terms and how much World is worth today. My gut feeling is that WRI has decided to let WorldRes go elsewhere because they found it difficult to turn it around. WRI is better off expending and developing their great asset like HostelWorld who is a leading online hostel booking engine with a great value proposition (don't get me started with Boo.com by the way...).
So what TravelHero is going to do with this old lady? The future will tell but I don't think there is much to do with it. Consumers in this very competive online travel landscape will be hard to seduce again.















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