One
of Aesop’s Fables concerns The Tortoise and the Hare and provides lessons for
us even today, some 2,500 years after it was written. One of those precepts is
that the swiftest do not always win the race. The hare in that allegory,
undoubtedly, had all the alacrity that members of its genus are capable of; yet
it lost to the sure and steady tortoise. Like Aesop’s fabled world, the
corporate world has its hares and tortoises, too. Not always do those first out
of the gate touch the tape of success.
The
rapidly expanding racecourse of alternative lodging has its hares that appear
to have the race wrapped up with their large number of listings. However,
Monaker Group, Inc. (OTCQB: MKGI) is on a surer and steadier course, because it
is focusing on return rather than just reducing channel costs. Its extensive
video portfolio can enhance the research process for would-be vacationers by
starting the holiday virtually… before it actually begins.
CEO
Bill Kerby has described the alternative lodging market as ‘the hottest space
in travel’; here’s why. Alternative lodging rentals (ALRs) are whole-unit
vacation homes or timeshare resort units that are fully furnished, privately
owned residential properties, including houses, condominiums, villas and
cabins, that property owners and managers rent to the public on a nightly,
weekly or monthly basis. Recent estimates by Research and Markets indicate that
this market will grow by a whopping 70 percent over a four-year period from
$100 billion in 2015 to $169.7 billion in 2019.
However,
this alternative lodging sub-segment is just part of the larger online travel
agency (OTA) segment of the giant global travel market. Online travel agency or
travel booking revenues, as they are also referred to, are currently about $340
billion with a projected growth rate of 12 percent, while global international
tourism revenue in 2014 was $1.25 trillion, according to Statista. Online
travel agencies (OTAs) expand their reach much wider than their traditional
counterparts do. They offer information and access to airlines, hotel and
alternative lodging, car rentals, cruise, rail and a combination of any of the
above, referred to in the industry as packaged travel.
The
prospects of the industry are indeed promising and, at present, it appears that
that promise has already been harvested by the privately-held Airbnb and
HomeAway, now a subsidiary of Expedia, Inc. (NASDAQ: EXPE), with their myriad
listings. But there’s more to this than meets the eye. A comprehensive report
from investment bank Evercore ISI points out:
“While
we are seeing larger online demand channels expand their inventory of vacation
rentals listings, this still has not translated to bookings fully shifting to
online. In fact, these listings are largely utilized to drive leads for
renters, while actual bookings continue to occur via cash, check, PayPal, etc.
whereby the original demand channel is not involved. For instance, while 2012
data indicates that vacation rental listing sites are responsible for nearly
60% of reservations, only 8% of reservations come from booking sites,
demonstrating that we still see a fair amount of leakage whereby transactions
occur through different means or even offline, potentially skirting a booking
commission. Closing this gap between leads and transactions could prove to be
another potential tailwind for the industry.”
Listings
are great, but they aren’t everything.
Monaker
Group is differentiating itself by enhancing its listings with a rich array of
video-centered marketing and itinerary technology for travel customers. The
website VIRTUETS Video Marketing for Real Estate provides data that shows why
this is crucial to success. Video can increase click-through rates by more than
90 percent, and 90 percent of users say that seeing a video about a product is
helpful in the decision process. Forbes writes that 59 percent of executives
would rather watch video than read text, and, according to an Australian Real
Estate Group, real estate listings that include a video receive 403 percent
more inquiries than those without.
Monaker
is forging ahead with listings, too. Since the launch of its flagship NextTrip
platform in February 2016, it has listed some 250,000 units of vacation rental
inventory. It has about one million additional alternative lodging units under
contract that will soon be added to the platform. This will position the
company to challenge industry leaders Airbnb and HomeAway.
For
more information, visit www.monakergroup.com
MissionIR is committed to connecting the investment community with companies that have great potential and a strong dedication to building shareholder value. We know our reputation is based on the integrity of our clients and go to great lengths to ensure the companies represented adhere to sound business practices.
Sign up for “The Mission Report” at www.MissionIR.com
Please see disclaimer on the MissionIR website http://www.missionir.com/disclaimer.html
