Today’s announcement of the proposed acquisition of Lastminute.com by Sabre-owned Travelocity for £577m heralds continued consolidation in the travel industry. Analysis by Hitwise reveals the wisdom behind the deal.
Whilst Travelocity is the second most visited travel agency website in the US, the firm has struggled to gain a stronghold in the UK. “Continued fierce competition and shrinking margins have led firms to pursue scale as the road to profitability,” said Simon Chamberlain, General Manager of Hitwise UK. “Expedia has been extremely successful in the UK, competing with Lastminute.com as the favoured online travel agency among UK consumers. Travelocity has enjoyed a similar position in the US and the acquisition of Lastminute.com may present the most efficient path to better market penetration in the UK market.”
* Travelocity is the 2nd most visited Travel Agency website in the US, whilst Lastminute is the 2nd most visited Travel Agency website in the UK for April 2005.

* Expedia is the leading Travel Agency site in both the UK and US, but the combined forces of Lastminute and Travelocity could, over time, present a viable challenger to this leadership.

* Travelocity’s dominance in the US market is underlined by its brand strength. Hitwise search intelligence data shows that “travelocity” is the term which sends the largest volume of visits to Travel Agency websites in the US (2.82% of searches), followed by “expedia” (2.35% of searches) for the 4 weeks ending 7/5/2005.

* In contrast, “travelocity” is the 23rd most popular search term sending visits to Travel Agencies in the UK. For volume of searches, “lastminute” is a stronger brand in the UK than Travelocity but “expedia” has a significant lead on this measure.
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