Webjet Limited (Webjet) announced that it has entered into an agreement to acquire Destinations of the World (DOTW). The US$173 million acquisition will solidify WebBeds position as the #2 B2B player globally and DOTW will join the JacTravel, TotalStay, Sunhotels, Lots of Hotels and FIT Ruums brands in the WebBeds business. Webjet is acquiring DOTW from Gulf Capital, the largest private equity firm in the Middle East, its founder and its management team, who will retain a shareholding in the enlarged Webjet Group.
Dubai-based DOTW is a leading independent B2B platform with regional expertise across geographically diverse source and destination markets.
DOTW’s strengths, in terms of geographic focus, product range and customer mix, are highly complementary to the WebBeds business. While WebBeds' main focus is on the long-term benefits of the acquisition, the acquisition is also expected to deliver considerable cost and revenue synergies over the short to medium term.
DOTW currently has a portfolio of c.12,300 directly contracted hotels. Of these, c.5,600 are unique to WebBeds, thereby increasing WebBeds directly contracted inventory pool to over c.28,500 hotels. Additionally, the c.6,700 overlapping hotel contracts will further deepen WebBeds’ room allocation and availability at key hotels around the world.
DOTW has a particular strength in the Asia Pacific market, which is a key strategic focus for WebBeds. Furthermore, it will deliver a material number of contracts into the strategically important Americas region, while further expanding WebBeds’ presence in the key European and MEA regions.
Webjet’s Managing Director, John Guscic said: “I am truly delighted to announce the acquisition of Destinations of the World which solidifies WebBeds’ position as the #2 B2B player globally.
WebBeds is focused on helping our clients succeed and enabling our hotel partners to respond to fast-changing market trends. The acquisition of DOTW will ensure we can accomplish this on an even greater scale than we have achieved to date.
DOTW is a company we have worked with for many years, and we have the greatest amount of respect for their business. We look forward to working with the DOTW team in the weeks and months ahead as we integrate our businesses and develop the best possible outcomes for all of our partners and clients.”
Adding DOTW to the WebBeds’ family will boost annual total transacted volume (TTV) to over A$2.0 billion (proforma for FY18) representing an increase of 54% and will increase the global footprint with offices in 36 locations. Following the acquisition, WebBeds will have more than 2,100 employees, allowing it to provide truly local support to its worldwide partner network. It will feature a portfolio of more than 250,000 hotels in all regions of the globe, of which c.28,500 are directly contracted.
Commenting on the sale, Dr. Karim El Solh, CEO of Gulf Capital, said: “We are very pleased to be announcing today the strategic sale of Destination of the World to Webjet, a leading B2B travel business. Gulf Capital has worked very closely with the DOTW management team to build a high-quality global business with a strong market position over the last four years. This is as a result of the management team's execution of their business plan, supported by a significant investment program into technology, rapid organic expansion and two strategic acquisitions that accelerated DOTW’s expansion in Asia, Europe and the Americas.”
WebBeds remains confident about the future growth of the travel industry. The growth rate of international tourism arrivals is consistently outpacing the expansion of the global economy, and the global commercial air fleet is projected to double in size over the next decade to accommodate rising passenger demand. Consolidation is a key trend in the B2B industry and WebBeds is confident that by expanding its operations, it will be able to drive further growth for the benefit of the wider industry.