hotel-urbano
11 months ago
 

Hotel Urbano founders return, Priceline Group writes-off investment

Brazil-based online travel agency Hotel Urbano has announced the return of its founders to run the company.

The move follows a unsettling period after the Priceline Group decided to write-off the remainder of its investment in the company.

Hotel Urbano lured a sizeable $60 million investment from the Priceline Group in July 2015.

The strategy was originally to give travellers in Brazil and Latin America access to more accommodation, mainly by integrating Priceline Group’s Booking.com’s portfolio of properties.

The realisation that the partnership had begun to turn sour emerged in the Priceline Group’s Q2 results, where it conceded to receiving “disappointing 2015 results” from the OTA, with the disclosure that its forecast for the future had been “significantly reduced” and additional funding would be required.

“Increased political turmoil, the declaration of a public health emergency related to the Zika virus and sustained poor macroeconomic conditions in Brazil in the first quarter of 2016 indicated a potential other-than-temporary impairment in the fair value of the company’s investment.”

The Priceline Group says it “recognised an impairment of approximately $50 million” for Q1 this year.

Officials then, following discussions with Hotel Urbano’s management team, issued a impairment of $10 million to relinquish its role with the company.

A statement from the OTA says:

“Joao Ricardo Mendes [chairman] and Jose Eduardo Mendes [CEO] have resumed active management and control of the company with the full support of the board and the company’s shareholder.”

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Kevin May

About the Writer :: Kevin May

Kevin May was a co-founder and member of the editorial team from September 2009 to June 2017.

 

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