Why Did Expedia Decide To Shut Down Its Italy-Based Hotel Booking Website, Venere?
Expedia acquired Venere with the intention of providing competition to Priceline’s Booking.com, in Europe. However, Venere’s small scale was no match for a behemoth like Booking.com and hence, after almost 9 years of having acquiring it, Expedia has decided to consolidate Venere’s property on its Hotels.com website and let go of the weak brand.
Traffic from Venere’s site is currently being redirected to Expedia’s Hotels.com and the former had stopped taking bookings since December 2016, though its B2B website for travel agents is still in operation in Italy. Expedia bought the Italy-based booking site, Venere, in 2008 when the brand had a significant presence in Europe, the Middle East, and Africa.
Venere underwent a financial restructuring in 2001 and in 2007, 60% of its stake was sold of to leading private equity company, Advent International. Expedia later bought the entire shareholding and added the brand under its umbrella, thereby expanding its own portfolio by 10,000 new properties.
Venere followed the same business model as Booking.com, namely, the agency-based model. In the agency model, the online travel agency pays a pre-decided commission to hotels after a customer has stayed in the hotel and the customer can pay the hotel upon the completion of their stay.
Though Booking.com could reap benefits from the agency model, Venere lagged behind. The reason behind its failure might be the lack of a huge scale like Booking.com. To provide a context, Booking.com is currently the most popular accommodation booking platform in the world with over a million accommodations on its platform across 93,000 destinations. Venere, a local hotel booking website, might not have been as successful in reaping the benefits of the agency model as Booking.com.
It is also more practical for Expedia to engage in a headlong competition with Booking.com rather than employing one of its local players to do the same and hence consolidating Venere’s properties into one of its flagship brands does make business sense. As a matter of fact, these days, several of Expedia’s brands offer the convenience of agency models and removing Booking.com’s competitive advantage might be one of the reasons for this.
Editor’s Note: We care deeply about your inputs, and want to ensure our content is increasingly more useful to you. Please let us know what/why you liked or disliked in this article, and importantly, alternative analyses you want to see. Drop us a line at content@trefis.com
- Have more questions on Expedia a? See the links below.
- What Drove Expedia’s Revenue And EBITDA Growth Over The Last Five Years?
- What Is Expedia’s Fundamental Value On The Basis Of Its Forecasted 2015 Results?
- Expedia Year 2015 Review
- How Have Expedia’s Different Segments Performed Over The Last Five Years?
- Expedia Q1 2016 Earnings Results
- How Does Expedia’s Financial State Currently Look?
- What Percentage of Expedia’s Stock Price Can Be Attributed To Growth?
- Who Relies More On Debt: Priceline Or Expedia?
- What Might Be The Long-Term Impacts Of Brexit On The Online Travel Agencies?
- Where Might Expedia Be Looking For Acquisition Opportunities Currently?
- Expedia’s Q2 2016 Earnings Preview
- Expedia’s Second Quarter Growth Was Undermined By Integration Issues Of Its Acquired Entities
- How Do We Expect Expedia’s Hotels Division To Trend?
- How Is Expedia’s Top Line Trending?
- Expedia’s Evolved Relationship With Marriott International And Its Significance
- Here Are Some Important Strategies That Expedia Is Focusing On For Its Future Growth
- Here’s Why Expedia’s Metasearch Engine, Trivago, Filed For An IPO
- Post The Completion Of Its Integration Related Activities, Expedia Seems To Be Back On The Growth Track
- In An Attempt to Further Wow Its Customers, Expedia Attempts To Provide Voice Search Services Through Amazon Alexa
- Expedia Stock is Up 75% Since 2023. Where Is It Headed Post Q4?
- What To Expect From Expedia’s Q3 After Stock Up 8% This Year?
- Can Expedia Stock Return To Pre-Inflation Shock Highs?
- Can Expedia’s Stock Rebound After Falling 50% Over The Last Year?
- Expedia Stock To Likely See Little Movement Post Q4
- 28% Gains Left For Expedia Stock?
Notes:
See More at Trefis | View Interactive Institutional Research (Powered by Trefis)