Why Did Priceline Sell Off Its Stake In Brazil Based Hotel Urbano?

by Trefis Team
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Priceline recently sold off its minority stake in Brazil-based OTA, Hotel Urbano. Brazil’s economic downturn coupled with the OTA’s poor performance were the reasons for this decision.

In mid 2015, Priceline invested $60 million to own a minority stake in the Brazil-based online travel agency (OTA), Hotel Urbano. The deal ensured Hotel Urbano’s exclusive usage of Priceline’s Booking.com to source hotels outside of LATAM. Priceline also became the preferred distributor of Hotel Urbano’s vacation packages. Brazil is one of the largest emerging economies and Hotel Urbano is the top player in Brazil and hence Priceline took this investment decision.

However, recently the founders of Hotel Urbano had regained the collective stake of around 50% from Priceline and other investors (Insight Venture Partners and Tiger Global Management). Brazil’s economic crisis had impacted Hotel Urbano severely and earlier this year, Priceline wrote down almost all of its investments in the company. Hotel Urbano’s valuation was estimated to be around $560 million in 2015.

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1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Priceline

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