RateGain buys hotel marketing technology ahead of IPO
Skift recently covered the rise of fintech (financial technology) and insurtech (insurance technology) in travel. We anticipate that you will also hear more about martech, or marketing technology, in the coming year.
Travel technology company RateGain, which is set to go public on an Indian stock exchange most likely by the end of the year, announced at the weekend that it was buying Myhotelshop, a technology provider from hotel marketing based in Leipzig, Germany.
The companies did not disclose the terms of the deal, but said they expected to get regulatory approval within about a month.
“This acquisition makes our martech [marketing trechnology] more holistic enterprise, ”said Harmeet Singh, CEO of RateGain. “This acquisition adds more flexibility in several ways, for example by extending connectivity to metasearch platforms and by optimizing the associated auctions.”
The Myhotelshop brand will remain after the merger. Since its inception in 2012, Myhotelshop has provided tools for hotels to manage and distribute content and campaigns to meta-searches or price comparisons, resellers, online travel agencies and other partners.
“The brand complements other marketing products that we have developed since 2019,” Singh said. “We were already improving to engage customers via social media to convert and to help hotels deliver more relevant offers through their direct channels. Now we are able to do it at the meta, digital level.
IPO Travel Tech in preparation
RateGain, which has minority backing from private equity firm TA Associates, plans to raise around $ 54 million (400 crore rupees) by offering new shares in public listing.
“Not to advance it, but we see that it will very likely happen this year,” Singh said.
TA Associates owns a 22.8% stake in the technology provider through its subsidiary Wagner. They join other investors by collectively holding half of the company’s capital before the IPO. According to the documents filed, TA Associates will sell the majority of its shares, 17 million, in the initial public offering.
Improve the revenue image
Today, RateGain is at around 70 percent of pre-crisis income levels. Going forward, around March and April 2022, RateGain expects the “business operating rate” to exceed what it was at the pre-pandemic stage.
In India, the fiscal year for companies ends on March 31. The company expects a recovery in the fourth quarter consistent with a pickup in domestic travel during peak travel season in India, in addition to expected resilience in the United States and Europe.
“The catalyst for growth has basically been the expansion of our distribution business,” Singh said.
At the same time, RateGain has many hotel customers in the United States, which have experienced a faster recovery in domestic travel than in India and some other markets, in part due to relatively higher immunization levels.
Singh said he expects further revenue growth from the company’s recently launched products. Some of its tools aim to apply artificial intelligence to the analysis of demand trends for individual properties and markets. Other tools have tried to help hoteliers set rates to better match demand.
Development of hotel software
Like many other providers who help travel agencies set room rates, RateGain has had to retool its back-end technology in response to the unusual conditions of the pandemic. Historical data was not predictive of pandemic and post-pandemic reservation models. So the company called on data scientists to build and improve applications, identifying new metrics – outside of traditionally tracked ones – that have proven to be more predictive under current circumstances.
Over the next six months, RateGain will focus on the initial public offering and the integration of its latest acquisition.
“Once the deal is done, the next 180 days will be spent integrating Myhotelshop’s technology and accelerating its sales growth,” Singh said.
“They were already at double-digit growth rate in Germany,” Singh said. “We are looking to expand its market across Europe in part by selling to our installed customer base. “
Singh also said his company would keep an eye out for any further acquisitions – and those would be more likely than not in distribution and marketing technology.