Skift Take
Booking.com has a substantial existence in the Middle East, but there is a vacuum that Wego Group and homegrown gamers could start to fill over the next few years.
Dennis Schaal
Singapore-headquartered Wego has traditionally been a regional metasearch organization, where travelers search for journeys and book them in other places, but the pending acquisition it revealed this week of Cleartrip’s Middle East company from India e-commerce giant Flipkart Group would produce a more diversified online travel group.
“Our aspiration is to build one of the world’s terrific online travel companies with MENA (Middle East and North Africa) at the core and with emerging markets more broadly as the theme,” Wego co-founder and CEO Ross Veitch stated Tuesday. Wego is double headquartered, with Dubai as the other area.
If the offer passes regulative muster in the 2nd half of 2022, then Wego would relabel itself the Wego Group and would acquire India-based Cleartrip’s Middle East operations, including Saudi Arabia-based Flyin.com. The offer also would feature a partnership and technology pact with Flipkart, often referred to as India’s Amazon, which looks for to concentrate on its core e-commerce operations.
Unlike Wego’s primary metasearch operations, which refer tourist leads to airline companies, hotels and online travel agencies to book, Cleartrip and Flyin are online travel agencies that crunch their own bookings, and therefore the Group would have a more comprehensive scope than travel search.
“We’ll run the OTA (online travel agency) brand names at arms length, same as Kayak with Booking Holdings, Skyscanner within Trip.com, and Trivago with their big Expedia ownership,” Veitch said.
Flipkart obtained Cleartrip, both India-based companies, in 2021. Flipkart will continue to run Cleartrip in India, which is not part of the Wego deal.
To be sure, Wego, founded in 2005 in Singapore and venture-backed by Tiger Global, Crescent Group, Square Peg Capital and others, would be starting reasonably small in its bid to be a local force in online travel.
Veitch said the combined business, namely Wego and Cleartrip Middle East, would have taped almost $2 billion in gross reservation worth in 2019 had they been wed at that time. Cleartrip, including its India operations which are not part of the offer, claimed $1.5 billion in gross booking worth in 2019.
Wego, on its own, reportedly notched $1 billion in gross reservations in 2017 with around half sourced from its relocation into the Middle East a few years previously.
“We anticipate to return to that run-rate by end of this year,” Veitch stated, including “this is us doubling down on the MENA opportunity.”
To put that pro forma $2 billion in gross booking worth from the combined companies in 2019 into point of view, Expedia Group notched $107 billion in gross reservations that year. A somewhat more appropriate comparison would be to another local online travel group– albeit in Europe rather than Asia Pacific and the Middle East– namely LastMinute.com Group. It did $2.7 billion in gross reservations in 2019.
“Cleartrip is strong across the GCC (Gulf Cooperation Council), especially with Indian expats,” Veitch stated. “Flyin is strong in Saudi.” The Gulf Cooperation Council includes the United Arab Emirates, Saudi Arabia, Qatar, Oman, Kuwait and Bahrain.
Cleartrip got in the Middle East from its India base in 2010, preceding Wego’s launching in the region by a number of years. They already are office neighbors with both companies operating regional head office in Dubai Web City.
The Middle East “is well-placed to be the engine of growth for travel both as a location and as a highly mobile, digital-savvy market trying to find option and value, stated Stuart Crighton, co-founder and head of Cleartrip’s worldwide company, in a declaration. “By signing up with forces with Wego, we have the ability to use everything from search to service and to contribute meaningfully to that story.”
The Cleartrip brand would continue to operate in home-base India as part of Flipkart Group.
Veitch is clearly upbeat about the Wego Group’s potential customers, although Booking.com has had a substantial existence in the Middle East for many years.
“I reckon the MENA region will produce several online travel unicorns over the next 5 years or two, and I believe the Wego Group will likely be the first,” Veitch said.