HotelPlanner.com, which is the parent company of Meetings.com, will go public through a merger with online travel agency Reservations.com and special purpose acquisition company Astrea Acquisition Corp., the companies announced this week.
The combined entity will keep the HotelPlanner name. The transaction, which executives expect to be completed in the fourth quarter of 2021, values the company at $567.1 million. Officials expect the company to raise more than $120 million.
Tim Hentschel, co-founder and CEO of HotelPlanner, will remain as CEO and also serve as chairman of the board of directors. HotelPlanner co-founder John Prince will serve as chief information officer.
The company plans to use the funds to "accelerate organic growth through investment and technology developments in artificial intelligence, machine learning, onboarding of gig-based travel agents, innovations and API services, and selective acquisitions."
HotelPlanner.com launched in 2004 and provides both online group and individual hotel bookings. Meetings.com, acquired in 2013, focuses on business travel and helping corporate event planners book meeting space and hotel rooms. Reservations.com was founded in 2014 and offers deals to both leisure and business travelers.
About 30 percent of the newly combined entity's business comes from business enterprises with leisure comprising the remaining 70 percent, Hentschel said during an appearance on CNBC's Squawk Box. "The 30 percent, that's been strong with the recovery from 2020 throughout the entire sector, so business enterprise is strong with us," he said. "Our affiliate partners are recovering like we are."
HotelPlanner revenue in 2020 declined about 23 percent year over year, however executives expect its 2021 revenue to exceed 2019's record level by approximately 31 percent, according to the company.
The company cited as an avenue for growth its Closed User Groups product, through which discounted, unpublished rates are offered through private sales environments and made available to members within such groups as business meetings, corporate travel, and social and sports groups.
"We believe the Closed User Group segment, in particular, will experience outsized growth as international group travel resumes and hotels increasingly provide unpublished preferred rates as a way to drive occupancy and defend against travel industry disruptors such as Airbnb and other new entrants," Hentschel said during a Tuesday investor call. "Another key differentiator is our proprietary artificial intelligence and machine learning-enabled technology platform."
The company suggested "positive trends" in the demand for event spaces would benefit Meetings.com, as companies that have shifted to remote work and reduced their physical footprint may be more likely to book meeting spaces for group events. "We also anticipate domestic and global business travel to pick up at a steady clip in the coming months and years," Hentschel added.
In June, HotelPlanner announced a partnership with MeetingPackage for direct group bookings.