Checkfront and Rezdy merge in significant tech deal in tours, activities and attractions

Checkfront and Rezdy have joined forces in a recently confirmed merger deal. 

The deal — which closed officially on June 15, the final day of Arival Activate – Bangkok, for an undisclosed amount — is the largest and most significant deal since 2018 when Booking.com acquired FareHarbor and TripAdvisor acquired Bokun. 

Arival sat down with Rezdy CEO Chris Atkin and Checkfront CEO Jason Morehouse for an exclusive discussion about the merger and their plans moving forward.

Why a merger and why now?

This deal has been in the works for some time. When asked about the impetus for the deal, Morehouse and Atkin shared that they had first floated the idea almost five years ago. 

“We always felt that we were two really well suited businesses to come together, two really strong trusted brands, each having the industry at heart in terms of what we’re trying to achieve,” Atkin said.

The impact of COVID slowed down the conversation for a few years but, as the businesses and the industry as a whole recovered from the pandemic, there was a compelling case for a combination.

Although neither would disclose the value of the deal, they did confirm that it is the biggest tours and activities tech deal thus far. For context, Booking Holdings acquired FareHarbor for $250 million in 2018.

What does this mean for operators?

Atkin and Morehouse confirmed that both businesses will continue to operate as their own brands and that there are no plans to combine the brands in the future.

The immediate plan in bringing the two businesses together, according to Atkin, is finding ways to improve customer support and service and bringing more features to market. 

“We have passionate and knowledgeable staff in each market now as well as the ability to focus more resources on the problems that operators face in doing business online,” Atkin said.

While the finer details of how the overall business will be structured are yet to be unveiled, both CEOs emphasize operators can find confidence in the fact that the merging companies are dedicated to maintaining the high standards they have set and to nurturing the relationships they have established.

“The intent of what we’re doing here is to deliver something that is a step up from what we’ve been able to deliver as individual businesses,” explained Atkin. “The brands stay, the people stay… you’re going to keep seeing the same faces at Arival.”

From fragmentation to consolidation

The in-destination experiences industry is a thriving sector, with approximately one million operators worldwide. Valued at over $280 billion annually, it’s the third largest sector of travel, after airlines and hotels. However, tech in the experiences sector is highly fragmented. 

At last count there are over 150 reservation technology platforms serving various segments of the industry. Very few leaders have emerged to serve over 1000 operators. However, few have managed to reach the scale of Fareharbor, Bokun, Peek, Xola, Bookingkit, Regiondo, Trekksoft,  Checkfront or Rezdy.

Surprisingly, even with their dominance, these providers only serve a fraction — estimated at less than 5% — of the global market, leaving an enormous untapped potential for growth and consolidation within the industry.

Morehouse said, “Combining our companies will benefit our shared customers, team, industry, and strategic position, thanks to our extensive regional presence and diverse verticals.” 

Independence in reservation technology

Unlike the FareHarbor or Bokun acquisitions, this merger results in the largest private independently owned reservation technology company - specifically, a res-tech [reservation technology] that is not owned wholly or in part by an online travel agency.

For both CEOs, this seems to be something they feel very strongly about.

“I’ve long felt that strategic independence is a potential superpower as a tech business within this industry,” Atkin said.

There has been a lot of debate in the industry about the independence of reservation technology systems and what that means for operators. While some argue that res-tech owned by OTAs favor distribution, which is more costly to operators but good for the distribution platforms, others contend that the OTAs are the only ones with the scale to drive incremental growth in the industry. Although direct bookings are still the largest driver of revenue for most operators, OTA bookings have become the fastest growing channel for online bookings.

The larger question is whether this merger will trigger further consolidation in the marketplace. Given that so few systems have the same scale and that it has been five years since the Fareharbor acquisition, it may be some time before we see more mergers or large deals like this in the market.

*This article originally published on Arival.