Monday, March 7, 2011

Fairfax buys more travel assets

The consolidation of holiday property listings market in Australia is continuing. Fairfax has just acquired online holiday rental business Occupancy Pty Ltd which runs and private listings sites. They will join a stable of Fairfax online travel assets that includes, and It was a cash and shares deal worth $29.1 million ($17.9 million in cash and $11.2 million shares in the combined Stayz/Occupancy business).

In late 2009, Yahoo7 bought for reported $20m. It had 167,000 paid listings and supplemented the revenue with display advertising. It shows that despite the downturn in travel industry due to floods, cyclones and high Australian dollar valuations of travel related portals, capable of bringing substantial quantity of listings and visitors, are on the high side. My estimate of traffic is 200-300k unique browsers a month, which would mean Fairfax paid a premium valuing each monthly visitor at $95-$145. Fairfax chief executive Greg Hywood said Occupancy was growing strongly and had huge market potential and that was a perfect fit with Fairfax stated strategy of expanding in the online transactions sector.


Fairfax claims that combined and audience is 800,000 unique visitors a month. The number seems to be confirmed by Google trends but, who knows…

More of back of the envelope analysis from – the combined Stayz and Occupancy will have 60-66% of the online market for vacation rental and short lets in Australia , "with Yahoo7's TotalTravel second and Realholidays (subsidiary of a very distant third". Estimated size of that market in Australia is $455m per year.