At
the dawn of the sixteenth century, who in Europe would have thought that
another continent existed? Not many, it seemed. The Florentine explorer,
Amerigo Vespucci, after whom the continent is named, coined the term Mundus
Novus (New World) in a letter to a scion of the Medici family. In that missive,
Vespucci set out his supposition that the lands encountered to the west were
not the eastern bounds of Asia but an unknown continent. His revelations, when
published, stirred Europe with an energy and excitement not seen since the
Crusades.
Today,
there is a similar buzz in the wanderlust industry. This time, the undiscovered
continent is the vast expanse of private properties that have the potential to
enter the alternative lodging rentals market, and with the well-positioned
portfolio of online travel agencies (OTAs) offered by Monaker Group, Inc.
(OTCQB: MKGI), the modern explorer can explore this new world and globetrot to
his or her heart’s content.
Great
things have small beginnings. According to this feature (http://nnw.fm/TCs3f),
the seed of the alternative lodging rentals market in the U.S. was planted when
David and Lynn Clouse founded VRBO (Vacation Rentals By Owner) in 1996. The
difficulties the couple encountered in trying to rent out their ski condo in
Colorado made them realize that others would be experiencing similar
challenges. VRBO was a huge success. In 10 years, it was listing about 65,000
vacation properties. Its sparkle of success caught the eye of HomeAway.com,
which snapped it up in 2006. In turn, last year, HomeAway.com was acquired by
Expedia, Inc. (NASDAQ: EXPE) for $3.9 billion.
This
trend of big fishes eating smaller fishes is a sure sign that the alternative
lodging rentals sea is spreading. Predictions of its growth are truly
astonishing. A recent report from Research and Markets (RAM), titled ‘Global
Vacation Rental Market 2015-2019’ (http://nnw.fm/0SMzI), estimates that the
market ‘will reach $169.7 billion by 2019’. At present, the global industry has
a market size of about $100 billion, with the U.S. accounting for approximately
one-quarter of that. That means the industry is expected to grow by almost 70
percent over the next four years.
Growth
is likely to be greatest in Europe and North America, since these regions
harbor widespread awareness of the vacation rental concept. The RAM report
cites a number of factors for the upcoming boom:
“The
entry of new technologically oriented start-ups and higher interest in vacation
rentals among travelers is one of the reasons for market growth. Travelers are
more inclined to using business intelligence software and data mining tools to
harness their data to improve their decision-making. Also, price optimization
by utilizing revenue management software is gaining popularity in the market.”
Monaker
Group and its subsidiaries have amassed vacation home inventory with the aim of
becoming one of the world’s largest online marketplaces for the alternative
lodging rental industry. Its flagship online marketplace, NextTrip.com, offers
over one million listings in Europe, Asia, South America and the United States
with links to 115 websites in 16 languages. The NextTrip platform earns fees in
two ways. Fees may be paid by property owners and managers as subscription
amounts for an annual period. In addition, fees may be paid on a performance
basis. Under such an arrangement, properties are listed without initial charge
and a commission is paid when the property is booked.
At
present, about 100,000 listings are subscription-based. Monaker is currently
encouraging owners and managers to convert to the performance-based format. The
company believes this format offers greater transparency and reduces the risk
incurred by owners and managers. Monaker will also benefit from the
performance-based arrangement since ‘no-charge’ listings should increase total
inventory. In addition, commission charges will undoubtedly reflect the added
benefit of reduced risk provided to property owners.
For
more information, visit www.monakergroup.com
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