The mergers and acquisitions across the hospitality industry are continuing apace: Revenue-management software company Duetto has acquired HotStats, a hotel benchmarking, financial-performance reporting, market data and insights company. Going forward, HotStats will operate as a subsidiary of Duetto and will be known as HotStats, a Duetto company. Terms of the transaction were not disclosed.
"We're obviously very excited about the acquisition,” Duetto CEO David Woolenberg told Hotel Management in an exclusive interview last week. “The acquisition accelerates Duetto’s ambition to become the definitive revenue- and profit-operating system for the hotel industry.”
The entire HotStats team—including CEO Michael Grove—will join Duetto. The leadership team will continue to lead the business in partnership and collaboration with the broader Duetto team. “We’re really building on an incredible foundation here,” Woolenberg said. “Duetto brings expertise in tech development, cloud-based software and operational optimization that will help drive better outcomes for HotStats and its customers.”
Building a Deal
HotStats’ financial benchmarking capabilities and global reach “align well” with Duetto’s focus on driving profit optimization across every revenue stream, Woolenberg said. “We can provide hoteliers worldwide with a differentiated view of both their top-line revenue and operating performance across rooms, food-and-beverage and ancillary services.” HotStats is a “trusted global brand” with longstanding customer relationships, he added—“Their team has put a lot of work into creating standardized reporting, data aggregation [and] reporting systems, which is incredibly valuable.”
The acquisition aligns with Duetto’s focus on top-line performance, adds the profit perspective and drives expansion into the data ecosystem, Woolenberg continued. “We love the culture of HotStats,” he said. “We love the brand they've built. They've got great relationships with their customers, and that aligns very well with what we've built at Duetto. We are excited to continue to innovate and develop new solutions for the hospitality industry.”
Benefitting the Industry
The two CEOs expect HotStats’ core offering in hotel-profitability benchmarking to support Duetto’s goal to give better visibility into top and bottom line, according to a statement from the two companies. The complementary products can provide a clear view of revenue and profit performance.
The leaders see other advantages of the partnership as well. “From a structural point of view, obviously the expertise that Duetto has in the areas of technical development, for instance, [is] where we should be able to leverage some of the expertise over time,” Grove told Hotel Management last week.
Overlaps and Opportunities
While there is some crossover between Duetto’s and HotStats’ audiences and customers, there is plenty of opportunity for both companies to continue to grow, according to Grove. “Partnering with Duetto allows us to uncover entirely new sales opportunities,” he noted. “The scale and efficiencies across the business will allow us to optimize our operating structure. There will also be the ability for us to leverage their expertise and allow us to scale from a business-development point of view.”
The solutions will be sold separately, but Woolenberg is excited to introduce HotStats products to Duetto’s existing customers. “Duetto customers can purchase HotStats’ financial-benchmarking solution to better understand relative performance and to improve efficiency and profitability across individual properties and portfolios. HotStats will sell their products to Duetto customers, and we hope to sell Duetto to HotStats customers—but they will remain distinct products.”
Woolenberg expects the two businesses to continue growing together as they have been doing individually. “We aspire to become the revenue- and profit-operating system for the hotel industry, and we think there's a huge value proposition underlying that,” he continued. “As we fulfill that vision, we expect to bring on more customers for both companies and unlock new growth channels. We are excited to explore what we can innovate and build for the industry in the coming years.”
Houlihan Lokey served as financial advisor and Orrick, Herrington & Sutcliffe served as legal counsel to Duetto. Gateley plc served as legal counsel to HotStats.