Early last month Webjet announced the $330 million acquisition of UK-based JacTravel Group holdings, with the move catapulting the organisation’s WebBeds business-to-business operation to become the second largest global player in the sector. Despite the huge investment involved, Webjet ceo John Guscic said he was confident the deal would boost earnings per share by at least 25%. JacTravel, which also operates under the TotalStay brand, specialises in multi-channel hotel distribution and tailored tours to inbound traveller groups visiting Europe, and has a strong presence in key international cities.
While key benefits of the deal include boosting Webjet’s global B2B scale and expanding its hotel relationships, the strategic rationale also lists “significant combination and integration benefits” including JacTravel’s “heavily invested technology platform”. While the JacTravel and TotalStay brands will remain independent within the broader Webjet group, the acquisition is also said to provide an opportunity to unify the technology underlying the group’s B2B operations.
Webjet’s expanded business-to-business hotel offering keeps its Webbeds operation in the race with market leader Hotelbeds Group, which is in the process of acquiring Tourico Holidays and GTA. Interestingly, when Webjet purchased Europe’s SunHotels in 2014, ceo John Guscic said he could see the B2B operations becoming larger than its consumer-facing Webjet brand.
Technology is a key enabler of the expansion, with Webjet undertaking a number of developments including its ‘Ethereum’ project which aims to track hotel inventory globally using a distributed ledger – via ‘blockchain’ technology similar to that used for various internet currencies including BitCoin.
Late last year Webjet unveiled a pilot scheme using Microsoft Azure’s “blockchain-as-a-service” system, with the aim of eliminating the hotel industry’s “dirty little secret” which results in leakage due to the complexity of keeping payments in order for the sometimes several intermediaries between the consumer and their hotel. The company was expected to provide a progress update along with its full year results announcement due at the end of August 2017.
