IHS, owned by Battery Ventures, acquires InnLink and TravLynx in hotel CRS landgrab
Hotels originally set up computer reservation systems (CRS) as a way to record bookings.
CRS quickly became more than just a way to track sales. It became a business of its own. And that industry now appears to be consolidating.
Last summer venture capitalist firm Battery Ventures acquired IHS, a portfolio of companies that includes Trust International, Europe’s largest CRS provider by number of reservations processed; Worldhotels (a group of independent hotels); and the sales management solutions provider Nexus.
The terms of the deal for the privately held companies were not disclosed. Battery Ventures has stated in the past nine months that it is increasingly interested in the hospitality area and has made some major investments.
I anticipate that IHS will want each of the CEOs in their portfolio to be building business models that can leverage the combined assets.
At any one time, InnLink has hundreds of clients who are potential candidates for joining Worldhotels, for example.
US growth in CRS
IHS expands its reach into North America with this acquisition of InnLink, a 22-year-old company headquartered in Hendersonville, Tennessee.
InnLink’s CRSs power the electronic booking databases of more than 7,000 independent hotels, chain properties, resorts, and destinations. About 1,200 of those properties are located outside of the US.
It has about 60 employees. Its flagship service brand is InnLink, which serves mid-tier, limited service properties — in other words, medium-sized hotels that aren’t full-service resorts.
Pam Walrond, director of marketing at InnLink/TravLynx, told Tnooz:
“Our new customer growth is 30% in the first quarter, year-over-year.
That goes across all of our services including GDS connectivity, our booking engine, our voice services — it’s pretty balanced growth in new properties.”
Intress was credited with kickstarting a period of growth at InnLink, growing the client list from 700 hotels when she started to 7,000 after her seven-year stint.
Worldhotels, with about 500 properties, is the smaller rival to consortiums such as The Leading Hotels of the World. New client cross-sales and support from investors like Battery Ventures could make it a more competitive player.
Synergies for Trust International, too
In the IHS portfolio, Trust International is the most similar company to InnLink. Trust has focused on chain hotels located in European and Asian urban centers, while InnLink has focused on independents in North America.
Trust is touting its own steady growth in clients, reservations processed, and revenue booked.
Its client list includes more than 70 hotel chains and representation firms, with approximately 5.000 hotels are using the Trust services. It says this means that it serves more properties than any other CRS in Europe.
The company says it has experienced growth through up-sells to existing customers of services such as chat-functionality for a hotel’s own website or call-forwarding, where a hotel’s own reservation office will be answered by Trust call center during holidays, weekends or off-peak periods.
Currently 38% of its electronic bookings originate from the three major global distribution systems. The remaining transaction volume is originating from web channels including its booking engines, OTAs, and metasearch sites.
Trust is shifting its strategic approach to compete more against US-based rivals, whose services overlap with some of its own solutions, particularly with Pegasus Solutions and Sabre Hospitality’s SynXis.
Its staff is now equally split between the US and the rest of the world, giving a strong US tilt to this German company. Last year, Trust added two new customers to its US call center operation: AmericInn and Warwick.
Trust specializes in focusing on hotel chains and representation firms, which is a different market from individual hotels, such as when it comes to system integration and or partner connectivity integration. Its customer base includes The Leading Hotels of the World, Small Luxury Hotels, and Worldhotels.
Trust International’s partnership with Google’s Hotel Finder in the US continues. But it isn’t yet powering the Hotel Finder product launched for Europe.
Trust says the number of reservations being delivered to hotels is “constantly growing but at a lower level than expected and depending on the hotel group´s level of budget used for the bidding process.”
TravLynx as a technology platform
The official announcement from IHS today downplays that it has also acquired TravLynx, a sister company of InnLink.
There’s quite the saga to this company, which licenses InnLink’s technology to third-parties, such as resellers.
As a backstory, another company, called Webvertising, built iHotelier as a CRS in 1999. In 2003, it sold iHotelier to TravelClick, a US consultancy that sells marketing and reservation services to independent and chain hotels.
In 2004 Webvertising became White Board Labs.
In 2009, Whiteboard Labs built the Windsurfer CRS. Around the same time, InnLink needed to update its technology base, and its CEO, Kristin Intress, went looking for a solution.
InnLink became a minority investor in the subsidiary that was created to hold the intellectual property, says Rodrigo Jimenez, CEO of Whiteboard Labs.
Later, the minority ownership was bought back. In 2012, the code was split. InnLink retained a license to the code as it stood at that point.
InnLink created a separate company, TravLynx, to license out its own cloud-based platform based on its share of the code. CEO Corso calls it the company’s “Intel inside,” the technology that powers its operations, and that other hospitality companies can pay to get access to for their own systems.
IHS says that its combined company network…
“supports 20,000 hotels in 65 countries, reaching approximately 120 million guests and helping its hospitality customers generate more than $3 billion in room revenue each year.”
The acquisition underscores that the systems used for reservations and distribution become more useful to hotels as they get bigger.
With a sophisticated CRS, a hotel can track its guests’ spending over time as well as maximize the most profitable channels for distributing their rooms — be it mobile apps, Facebook booking engines, inbound calls, reservations from the hotel’s site, or reservations from online travel agencies (OTAs).
Rumors are flowing that there will be additional re-alignments among hotel distribution and reservation specialists this year, as competition heats up for market share.
Says Christiane Seelgen, marketing manager for Trust International:
“Together with our investors, Trust International is evaluating the opportunities available and is always open to expand its portfolio.”
Sean O’Neill is a New Jersey-based reporter for Tnooz. He is also a daily contributor of consumer news to LonelyPlanet.com.
He used to work for BBC Travel, BudgetTravel.com, and Kiplinger's, and used to live in London, New York City, and Washington, DC.