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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