Accor's GoVoyages was one of the early winners in online travel in France. Was seen as one of the few successful examples of a hotel supplier setting up an independent multi-inventory sales channel. News now that Accor has sold the business for Euro281mm to Financiere Agache Investissement (Groupe Arnault). It is not only another private equity deal in travel but also fits into the management buy-out basket.
Important terms for the deal include the Accor retaining preferred distribution rights forfor three years. Press release also divulges that GoVoyages generated EUR118 million in revenue and EBITDA of EUR13 million in 2006.
Accor's rationale for the sale is clear - in this very competitive environment they need to focus on the core business of owning, managing and running hotels. However I think they might have left this business too soon. The French online market has taken longer than most expected to take hold. Given the earlier successes of online travel in the UK in 1999/2000 it was expected that France (and Germany) would follow suit very quickly. However it took until at least 2005 before the big and small players began to make traction in sales (and profitability) online in France. GoVoyages is one of the leaders here, is profitable and (I assume) is growing. Accor probably feels comfortable with an exit of more than 20 times earnings but given that the market is finally taking off, that Expedia and Priceline are trading at 30 times plus and that the management loved the business so much they wanted to buy it, if I was advising Accor I would have suggested they hold on for a little longer.