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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