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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