Travelocity sells Travelguru hotel site to Indian agency giant Yatra

Deal time on the subcontinent, with Travelocity selling its hotel spin-off service Travelguru to Yatra, one of the biggest online travel agencies in India.

The sale, for an undisclosed fee, ends a relatively brief period of ownership under the Sabre-owned Travelocity umbrella after Travelgru was bought less than three years ago, also without any terms being released.

Travelguru has operated as a separate brand from the existing Travelocity Global push into India since August 2009, two years after the online travel agency entered the Indian market for the first time.

While on the one hand the sale might say something about Travelocity’s targeting (or not) of the growing Indian online travel marketpace, Travelguru ending up in the hands of Yatra speaks volumes about how eager online travel agencies are in the country to keep pace with market leader MakeMyTrip.

Travelguru will give Yatra around 6,500 hotels in India itself, as well as a further 72,000 worldwide.

Yatra says it will retain the Travelguru brand and continue to operate the company as a separate business unit from the main OTA which competes head on with MMT.

At the turn of the year, MMT was capturing around 30% share of the agency marketplace in India, compared to Yatra’s 20%.

It is not the first time Yatra has splashed out in order to bolster its portfolio of brands, having made four acquisitions over the course of the last 18 months, including the purchase of TSI in October 2010, MagicRooms in June 2011 and Buzzintown in January this year.

Yatra is backed by high profile VCs in the shape of Norwest Venture Partners (NVP), Reliance Capital, Network 18, Intel Capital, and Valiant Capital Partners.

Travelguru, prior to being sold to Travelocity, was funded by Sequoia Capital India and Battery Ventures.