First Choice has strengthened its online businesses with the £108 million purchase of www.laterooms.com.
The late availability site with more than 13,000 mainly UK hotels is expected to make a profit of £6.2 million in 2006 and accounts for 12% of the intermediary online hotels booking sector at about 1.3 million bednights.
First Choice chief executive Peter Long said: "Operating in a high growth sector, we see considerable opportunity to increase Laterooms future profitability even further. It has a distinct business model servicing a niche market segment at low cost.
"The access to an increased range of accommodation already available in the group will strengthen its position and give international scalability."
First Choice estimates the UK hotel market to be worth £12 billion a year, of which £8.2 billion comes from the domestic source market, with 20% of customers booking online.