Expedia Acquires Travelocity

Expedia Inc. acquired Travelocity, which includes its U.S. and Canadian points of sale, outright from Sabre Corp. for $280 million in cash.

The sale follows the 2013 agreement to outsource Travelocity’s inventory and technology to its longtime rival. That agreement, which essentially made Travelocity an Expedia affiliate, gave Expedia the right to acquire “certain assets of the Travelocity business” at any time during the term of the agreement.

Over the past two years, Sabre has been shedding its non-core businesses.

It sold Zuji, its Asian online agency, to Webjet and Travelocity Business to BCD Travel in 2013. It sold the Travelocity Partner Network to Orbitz in 2014.

A sale of Lastminute.com to Bravofly Rumbo Group, which operates online travel agencies in Europe, is expected to close during this quarter.

 Back to (core) business

Sabre Corp. plans to focus on Sabre Travel Network, its GDS business; Sabre Airline Solutions, which provides a range of airline revenue management, scheduling and other products and is the second largest provider of passenger services systems in the world, and Sabre Hospitality Solutions, which aims to deliver an end-to-end IT platform for hotels.

The airline and hotel IT businesses have experienced the most rapid growth for Sabre in the last year.

The sale brings the final curtain down on former Sabre chief Sam Gilliland’s visions of having a presence at every point of the travel distribution chain.

 Not a good thing

That vision didn’t sit well with many traditional travel agency customers, who were uncomfortable with their primary technology provider operating a website that competed with them.

Travelocity was created by Terrell Jones, a Sabre IT executive, in 1996. It got a boost from a 2000 merger with Preview Travel, an online travel pioneer.

That, too, rankled agents; Preview had run a series of radios ads disparaging traditional agencies.

Jones left the company after the merger, and Sabre acquired Site59, an OTA focused on the last-minute market.

Its founder, Michelle Peluso, eventually was tapped to lead the Travelocity vision. On her watch, the popular Roaming Gnome marketing campaign was launched, which gave Travelocity a strong media presence.

But over the years, Travelocity fell behind on the technology front and was overtaken by Expedia.