The proliferation of
the internet over the past decade has had an undeniable effect on the global
travel industry. In 2007, total online travel sales were estimated at just
$93.8 billion, according to data from Statistic Brain (http://dtn.fm/G8uxx),
but just five years later, the industry had grown to roughly $162.4 billion in sales.
Today, approximately 148 million travel bookings are made on the internet each
year, accounting for about 57 percent of all travel reservations. While air
ticketing and packaged tours account for a healthy percentage of this revenue,
the lion’s share is attributed to hotel and accommodation reservations. Led by
industry giants such as Priceline (NASDAQ: PCLN) and Expedia (NASDAQ: EXPE),
this rapid growth has shown little signs of slowing down.
As with any rapidly
growing market sector, the online travel agency space has seen its fair share
of consolidation over the years. Way back in July 2005, Priceline acquired
European hotel booking site Booking.com before expanding its profits from $10
million to about $1.1 billion in less than a decade (http://dtn.fm/j1idK). In
2012, the company attempted to catch lightning in a bottle again when it
purchased Kayak Software Corp. in an effort to fend off growing competitors and
increase its customer base (http://dtn.fm/S7ljX). Last year, Expedia followed
suit, acquiring both Orbitz and Travelocity over the course of a few weeks
(http://dtn.fm/2OppD).
While the referenced
consolidation examples point to a common theme of established players acquiring
rivals with expansive and valuable user bases, recent market action has
suggested that there’s more to an online travel platform than its market share.
Just last month, TripAdvisor (NASDAQ: TRIP) made headlines when it acquired
London-based vacation rental service HouseTrip for an undisclosed amount
(http://dtn.fm/YO3g9). Unlike the acquisitions mentioned above, HouseTrip’s
financial position and user base were both fairly underwhelming. Since its
launch in 2009, the site generated only eight million bookings, while primary
competitor Airbnb is on pace to help host an estimated 129 million guests this
year alone.
With HouseTrip’s
small market share, its acquisition by TripAdvisor may seem puzzling, at least
until viewed from the angle of inventory. As travel industry leaders attempt to
replicate the success of Airbnb’s sharing economy business model, companies
boasting sizable property inventories are becoming prime acquisition
candidates. Through the acquisition of HouseTrip, TripAdvisor added an
estimated 130,000 properties to its family of booking platforms (http://dtn.fm/Beji6),
bringing the company’s total listings to nearly 800,000 unique properties in
high-demand markets around the globe.
The success of
Airbnb has many in the travel industry playing catch-up, but one company has
its sights set on the next big thing in vacation accommodation. Monaker Group,
Inc. (OTCQB: MKGI), a technology driven travel company with multiple divisions
and brands, recently announced the launch of its proprietary timeshare booking
engine, NextTrip Resorts. Through this groundbreaking platform, Monaker is
targeting a largely untapped market with inventory of about 19 million rooms,
of which roughly 25 percent go unused. To date, the company has added over
250,000 units of alternative lodging inventory to its flagship NextTrip.com
booking platform, and it reports approximately one million total alternative
lodging units currently under contract.
With the travel
industry’s recent track record of rapid consolidation, Monaker’s sizable
property inventory and growing user base position it as a potentially
high-value candidate for industry leaders in search of the next big thing. Look
for the company to leverage this momentum as it continues to expand upon its
position at the forefront of the alternative lodging space. With one of the
largest inventories of alternative lodging properties in the industry
(http://dtn.fm/WAef5) and innovative new features such as real-time booking
solutions, Monaker is a company that’s worthy of serious consideration from
prospective shareholders in the months to come.
For more
information, visit www.monakergroup.com
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