Post on 21-Apr-2017
Online Travel: a Deep Dive
Europe and beyondJune 2016
1. Introduction
2. Macro view
3. Strategic landscape
4. Funding & valuation data
2
Table of contents
Who is Dealroom.co■ Dealroom is Europe’s leading online resource for rich
data and analytics on private tech companies
■ Natural language processing and algorithms are used to capture real-time insights on 500K companies
■ Data is verified and curated by an internal team of analyst and by our community of 10K+ founders, VCs, accelerators, journalists
■ Founded in 2013 by a team with backgrounds in investment banking, data science and IT
3
About this report
Curation & research by Dealroom’s team
10,000+ contributors (founders, VCs, …)
Big data analytics on 500,000+ companies
This report■ This report combines algorithmic and funding data
from Dealroom with industry research and insider interviews, to provide a 360° view on the online travel space
■ The scope is global, but with European emphasis
■ In addition to this presentation, the full report also consists of an online database with curated lists, which are references throughout this presentation
■ For more information, also check dealroom.co’s blog
Yoram WijngaardeFounder of Dealroom.coFormer tech, media and telecom M&A advisor at Lehman Brothers and NOAH Advisors
Authors and contributors
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Julien PulsContent curatorWith Dealroom since 2014. Formerly at CMB CapitalUniversité Jean Moulin, Lyon
Contributors
John Erceg (private investor, hotelier, serial entrepreneur)Founder of Budgetplaces, sold in 2011 to private equity. MBA from IESE business school, Worldwide Market Development Manager for HP. From California, lived in Barcelona since 1994.
Avi Meir (Co-founder and CEO at TravelPerk) Founder of Hotel Ninjas, sold to Priceline in 2014. MBA from IESE Barcelona. Former Senior Product Owner at Booking.com and Product Vice President at budgetplaces.com
Joe Haslam (Chairman & Co-founder, Hot Hotels)HotHotels offers discount, mobile only rates up to 7 Days in advance of your stay. In 55 Countries & 333 cities in Europe, Africa, Middle East, Asia & the Americas (Techstars Boston, Summer 2015 class).
Patrick Martin (Partner - LD&A Jupiter Corp Finance) M&A advisor in media & tech since 1993. Former Head of Media at Alegro Capital, Co-CEO of 2k Media, and Managing Partner of Helkon Media.
Chris Moller (Campanda CEO & founder, Möller Ventures)Campanda is a booking platform for RVs which raised €5m series A last year. Chris is also the former CEO and founder of erento, a marketplace for renting goods and services, sold in 2011 to Russmedia.
Axel Schmiegelow (CEO of iTravel)Serial entrepreneur focused on the web, social media, and software. itravel is an experience-based online and mobile tour operator that offers leisure travelers a platform to fully customize trips.
Jaime Novoa (Data Analyst at Tech.eu) Also owner of Novobrief, an English language blog covering the Spanish startup ecosystem. Previously a writer for StartupXplore, Weblogs and We Are Social.
Jose Luis Martinez (CEO at HundredRooms)Former Head of Kayak in Spain, and Managing Director of Spain and Portugal. Former Director for Spain eDreams ODIGEO. Advisor to Board of Directors in Minube. In 2008 founded Viamedius.
Jan Wegenaar (CEO at Advalley.io) Direct marketing & travel entrepreneur. Launched voucher concept, sold to WTA in 2007. Founded Advalley.io in 2011, a B2B voucher marketplace for merchants and advertisers.
Robin Wauters (Founder at Tech.eu)Advisor / minor shareholder of several tech starups such as Checkthis (Frontback), Maily.com, Argus Labs (Jini.co), Showpad.com and Oxynade.com. Former Editor at The Next Web, Vitualization.com and TechCrunch.
Editors
RJ Friedlander (Founder & CEO, ReviewPro)Over 17 years experience in Internet and technology in Europe, the US and Asia. Led projects that have generated more than $300 million in revenue. Senior executive at Grupo Planeta for about 10 years.
Philipp Brinkmann, (Founder and CEO, Tripsta)Tripsta is a leading OTA in Greece and operates in 50+ markets. Philipp has also been on the board of several companies in the travel, e-commerce, and media industries.
Carlos Rodríguez-Maribona Andrés (COO, Minube)Beyond his role at the UK based leading travel guide Minube, Carlos is also an Associate at the investment division of Axon Partners Group.
Elliott Pritchard (CMO, Triptease)Former Chief Marketing Officer at Travel Republic, he has assumed leading positions at P&O Cruises, Kuoni, and MarketingNet.
Naveen Sharma (CMO, Lodgify)Lodgify enables vacation rental owners and managers to easily create a website for their properties and manage their reservations. Former Senior Consultant at Cloudbridge.
Friedrich von Scanzoni (CEO, Burda Asia)Broad management experience in digital media (13 years), in start-up, growth and restructuring environments. Former Managing Director International at HolidayCheck and VP of VP Corporate Development at Tomorrow Focus.
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Introduction
Online migration
■ Most travel segments (hotels, tour operators, traditional flights, cars, rails) are still over 60% dependent on offline and other channels. The exception are low cost airlines, at 90% online
■ However, “offline and other channels” does not necessarily equal “old-fashioned”. It includes personally individualised travel, using Google, and then booking locally, via email, etc
■ The next frontier in online migration likely involves: customisation, on-demand, and convenience
Market power
■ Following a consolidation wave, Priceline and Expedia now have over 60% European market share of Online Travel Agents (OTAs). That is about 13% of the total online & offline European market
■ Booking.com (Priceline) dominates lucrative hotel distribution, mainly via Google paid search
■ The remaining 40% of the OTA market is fragmented, consisting of regional OTAs and meta-search
■ Meta-search is still on the rise in Europe, both in flights and hotels, surpassing regional OTAs
■ Airlines have maintained direct distribution power, by consolidating and investing in online presence
New developments
■ In April ‘15 Booking.com was forced to abandon certain price-parity clauses, allowing hotels to offer lower prices via smaller OTAs. This also plays into the hands of price comparators (meta-search)
■ Meanwhile, Google is deploying a cost-per-click (CPC) model for hoteliers (Hotel Ads / Hotel Finder). Trivago (Expedia), too, is experimenting with a direct CPC model for hotels
■ Hotel chains are seeking to regain control, via consolidation (AccorHotels, Marriott), by investing in startups (Hyatt, Wyndham, AccorHotels), and their own booking platforms (AccorHotels)
■ Travel was originally among the first industries to get digitised, but disruption keeps happening and online migration still has a lot of ground to cover
Meta-search■ Flight meta-search is benefiting from regional fragmentation of flight OTAs. Skyscanner is also testing a direct distribution model
with airlines, thus becoming a quasi-OTA. An OTA’s take-rate adds up to 5-10%, whereas for Skyscanner the CPA is as low as 2-3%
■ Hotel meta-search is also on the rise, as consumers look to compare across all types of accommodations, not just hotels. Abandonment of price parity means that usefulness of price comparison increased, revealing price differences on single properties
Booking
■ New hotel booking platforms face high entry barriers, requiring both inventory and distribution. Plus, Booking.com already dominates. But there is still is a $58 billion offline hotel opportunity in Europe and hotels keen to reduce Booking.com dependency
■ Other attractive segments include: cruise lines ($40B(2)), trains ($33B), campings ($10B(1)), activities, and business travel ($1.2T ! (3))
■ In flights, the OTA model is crowded and being challenged by the meta-search model and airlines
P2P■ Airbnb created an entirely new category and is leading the space with close to $9B in bookings. Since then, Booking.com already
established a strong position in apartment rentals
■ Other attractive segments include camper vans (Campanda), boats (Sailsquare), and cars (Blablacar)
Packaged tours
■ Packaged tours made a comeback via new discount-driven models such as clubs, email, and deep-discounting (Travelbird, others)
■ Traditionally the domain of TUI, Thomas Cook etc, this $55B market is still is 75% offline ($41B). Much anticipation now comes from highly personalised travel solutions using human and artificial intelligence (Lola, iTravel, HeyJude) and on-demand models
■ More traditional OTAs in Germany have been pursuing consolidation strategies (7Travel, Unister). Several local mid-market online tour operators seek scale via strategic combinations, exits or private equity sponsored roll-up
B2B tools
■ The hotelier software space has traditionally been crowded due to low entry barriers. Recently however, hoteliers are keen to regain control over their distribution and thus willing to invest in online presence, guest management, CRM, loyalty
■ Booking.com is rolling out its hotel management software suite (called BookingSuite) and has made acquisitions in this field (Hotel Ninjas, PriceMatch, Buuteeq). However, some hoteliers are disinclined giving Booking.com more power over their reservations, creating anopportunity for independent B2B tools
Apps■ The default online travel model has been “search & book”, but there is still a huge underserved “on-demand” consumer market
■ Also, app based personal assistants could soon replace tour operators (powered by human and/or AI)
■ Mobile is so far only 15% of total online volume but expected to grow rapidly
61. Market industry interviews. 2. Statisa. 3. PhocusWright.
Core travel segments
7
Identified companies to watch
Meta-search AllTheRooms (all room types)ComparaBUS (all ride types)
HundredRooms (rooms)Holidu (vacation rentals)
Tripping (vacation rentals)Kiwi.com (low cost flights)
Voopter (Brazil flights)
HomeToGo (rooms) Skyscanner (flights, CPA)Momondo (flights, CPC)
BookingTiqets (events)
HeyCaptain (boat rental)Campday (campings)
Loco2 (trains)
TravelPerk (business)Couverts (dining)
Cruisable (cruises)Stratajet (private jets)
Musement (guided tours)Hipcamp (campings)
Campings.com (campings)
Amoma (budget)Budgetplaces (budget hotels)
Dreamlines (cruises)GetYourGuide (events)
Atrapalo (events)Motorhome Republic (motorhomes)
Tripsta (flights)OneTwoTrip (flights)
HRS (hotels)Auto Europe (cars)
Hotel Urbano (hotels)
P2PYestudent (budget)
Handiscover (disabled)MyTwinPlace (home share)Click & Boats, Barqo (boats)
Homestay (vacation rentals)Sailsquare (sailing)
Wimdu (vacation rentals)9Flats (vacation rentals)
Campanda (camper vans)Blablacar (ride share)
Packaged tours Gruppal (Turkey)Hey Jude (personal assistant)
TourRadar (tours)Travelata (Russia)
Lola Travel (custom)iTravel (custom)
Festicket (festivals)Travador (packaged weekends)
Travelbird (email deals)Evaneos (France)
Emesa (discounts)Secret Escapes (club)
Inspirato (club)Viajanet (LatAm)
Holidaycheck (Reviews)Unister (Germany)
Accor Hotels (Hotels)Decolar (LatAm)
B2B toolsAdvalley (hoteliers)
MaxMind (hotel GDS)Poshberry (loyalty)
Lodgify, Kigo (vacation rental)Triptease (site conversion)
Channelrush (hoteliers)BD4Travel (big data)
Alice (concierge)Avvio (booking platform)
SilverRail (rail operators)Eviivo (hoteliers)
Siteminder (hoteliers)Snapshot (analytics)
Revinate (review analytics)Reviewpro (review analytics)
TravelClick (hoteliers)RateTiger (hoteliers)
AppsTouchotel (hotel)Polarsteps (diary)Hot Hotels (hotel)
Dayuse (budget hotels)Byhours (budget hotels)
Ulmon (guide)TRAFI (journey planner)
HotelCloud (concierge, B2B2C)
HotelTonight (hotels)CityMapper (journey planner)
more seed stage » more early stage » more late stage »
Seed stage Early stage Late stage Buyout stage
View underlying data » https://app.dealroom.co/lists/10049
More data available online
1. Introduction
2. Macro view
3. Strategic landscape
4. Funding & valuation data
8
Table of contents
Bookings of $1.3 trillion globally of which over $450 billion online ...
9Source: PhocusWright 2015 estimates and 2010-2015 % CAGR. Eurostat. Dealroom.co analysis. Excludes managed business travel.
Booking volume by type Booking volume by geography
Booking, Kayak, OpenTable, Agoda, ...
$ 60B firm value = 13 x $ 4.6B EBITDA
Expedia, Trivago, HomeAway, Orbitz, Travelocity, Wotif, ...
$ 17B firm value= 10 x $ 1.7B EBITDA
eDreams, OpodoGovoyages
$ 25B firm value
$ 1B firm value
$ 625M firm value= 6.4 x $ 94M EBITDA
Online travel is dominated by Priceline, Expedia, Airbnb, and Google
10Source: PhocusWright 2015, adjusted for acquisitions, equity research, Dealroom estimates.
$ 68B gross bookings
$ 78B gross bookings
$5B
$12 B
$ 9B
But there is still plenty of room to grow, via existing and new channels
11Source: PhocusWright 2015, adjusted for acquisitions, equity research, Dealroom estimates. Excludes managed business travel.
Global market share UK, France, Germany
Offline still accounts for over 60% of bookings (except for low cost airlines)
12Source: PhocusWright 2015, adjusted for acquisitions, equity research, Dealroom estimates. Excludes managed business travel.
As percentage
European booking volume by channel
Already 90% direct online
Via GDS, direct phone, travel agents, ...
Booking.com etc.$58 billion opportunity for: - Booking.com and other OTAs- Hotelier’s direct online channel- On-demand apps
Traditionally the domain of TUI, Thomas Cook etcA $41 billion opportunity for innovative, flexible and customisable travel solutions
Skyscanner etc.
Lastminute, Unister etc.
13Source: PhocusWright 2015, adjusted for acquisitions, equity research, Dealroom estimates. Excludes managed business travel.
Booking volume % volume growth
UK and Germany stand out in size, but Southern Europe offers more growth
14
Mobile bookings are still nascent European online booking volume European mobile booking volume
Onl
ine
1. Introduction
2. Macro view
3. Strategic landscape
4. Funding & valuation data
15
Table of contents
Expansion of accommodation types
16
City$180B bookings (3)
Rural$10B (3)
Beach | Ski $180B bookings (3)
HotelsB&B
1 million properties (1)
(= 25 million rooms)
Bookable Apartments, Rooms, Villas
1.5 million properties (2)
(= circa 2 million rooms)
Hostels
Campers / Campings (€10B)
Cruises
Booking.com
Hostelworld
Airbnb, Homeaway, Wimdu
ExpediaTUI
LastminuteUnister 7travel
Campanda, Motorhome Republic
Dreamlines
Source: Dealroom.co, Euromonitor. 1. Of which about 250K in Europe.2. Of which about 500K in Europe.3. Europe: $50B in cities, $50B in beach & ski, $5B in rural. Excludes managed business travel.
Meta-search: Trivago, Kayak, Hometogo, HundredRooms, Holidu, ….
Airbnb’s rise is displacing city residents and even impacting housing market prices, but so far “only” about 5% of new rooms were added to the total pool.
GuestsHotels
Booking dominates hotel distribution chain, mainly via paid search
17
circa
€80 €100
HotelSearch
TrivagoKayak
HundredRoomsAllTheRoomsHomeToGo
HoliduHotelier Stack:
Loyalty & CRM
PMS (Property Management System)
Booking Engine
Channel Manager
Reputation management
Direct MaxMind, Avvio, Triptease, Advalley
Expedia, Airbnb ...
Tour OperatorsTUI, Thomas Cook, ...
GDSHotelBeds
Consumer Stack:
Google search(and Google Hotel Finder)
circa
€20
Source: Dealroom.coNote:€20 is indicative cost per booking. Booking commission typically ranges from 10-30%.
On-Demand Apps:
HotelTonight Touchotel
DayusePolarsteps
UlmonTRAFI
Blink Booking (Groupon)
Buying traffic (cost per click)- Google Hotel Ads (Hotel Finder)- Trivago Direct Connect (Expedia)
- Still in somewhat experimental phase- In theory, hotel could outbid OTAs, if it can
get conversion rates on par
Online presence- Online suite & booking engine
(Avvio, BookingSuite)- Conversion optimisation (TripTease)
Walk in (= on-demand)
Hotelier distribution stack
18Source: Dealroom.co
OTAs (agency model):- Booking.com (15-30% commission)- TripAdvisor Instant Booking (15%)
- AccorHotels opened its booking platform to independent hoteliers
- Other OTAs
Tour operators (merchant model):- GDS / Bedbanks (Hotelbeds).
- Relationship with agent, not customer
Direct Online Channels
Intermediated Channels
Hoteliers of all sizes are keen to regain some control over their distribution, and are willing to invest in online presence, loyalty, and guest management
Vistors
Hotel Management
Channel Managers Matching inventory with multiple distributors
TravelClick, RateTigerSiteminder, Channelrush
Customer Retention- Reputation management
(ReviewPro, Revinate)
- Loyalty (Advalley)
Integrated PMS, revenue management and booking:
Eviivo
BookingSuite
Guest management:
Alice (Expedia invested)
HotelCloud (app for guests)
Analytics dashboard:
Snapshot
Global Distribution Systems (GDSs) still manage 20% of European travel
19
Amadeus Sabre Travelport Hotelbeds
GDS Amadeus Sabre Abacus (ownership stake) Apollo Galileo Worldspan Hotelbeds
HQ Spain United States United States Spain
Market cap €18.3B $7.7B $1.7B $1.3B(April ‘16 acquisition price)
12 month share price performance
+2% +6% -16% private
Net revenues2015 and 2016
$3.9B $4.3B $3.0B $3.4B $2.2B $2.4B $1.1B $1.2B
EV / EBITDA 2016 and 2017
12.5x 11.5x 9.7x 8.6x 6.7x 6.0x 15x 12x
OwnershipPublicly listed
(BC Partners, Cinven sold down ownershiP)
Publicly listed(Silver Lake, TPG selling down
ownership)
Publicly listed(Blackstone sold down most of
ownership)
Cinven, Canada Pension Plan (acquired from TUI
in April 2016)
Source: PhocusWright 2015, Dealroom.co
View underlying data » https://app.dealroom.co/lists/10048
Industry consolidators
20
Priceline Expedia eDreams ODIGEO
LastMinute Group
ProSieben (via 7Travel) TUI Thomas
Cook TripAdvisor Airbnb Ctrip Recruit
Net revenue (2015) $9.2B $6.7B $517M $278M $3.7B $22B $11.4B $1.5B $900M $1.7B $14.5B
Market cap $63B $17B $259M $169M $11B $9B $1.6B $10B n/a $20B $19B
12 Month change +7.8% +4.6% -31% -39% +2% -8.6% -46% -11.5% n/a +139% -5%
Firm value $66B $18B $625M $90M 11.5B $10B $1.7B $9.3B $10 - 21B $21B $17B
Acquisition strategyMarket shareHotel stack
Diversify
Market shareDiversify Unknown Increase online
scaleIncrease online
scale Divesting Buying tour operators
Adding B2B classifieds
models
Small acquisitions
Strategic VC investments
Strategic VC investments
Selected Acquisitions Kayak 2012, $1.8B
Booking.com 2005, $135M
Hotel Ninjas 2014, N/A
Buuteeq 2014, N/A
PriceMatch 2015, N/A
OpenTable 2014, $2.6B
Rentalcars 2010, N/A
Agoda 2007, N/A
Swoodoo 2010, N/A
HomeAway 2015, $3.9B
Orbitz (incl eBookers)
2015, $1.6B
Trivago 2012, $632M
(62%)
Travelocity 2015, $280M
Wotif 2014, $658M
Auto Escape 2014, $85M
CarRentals.com
2008, N/A
Venere 2008, N/A
Hotels.com 2001, N/A
Opodo 2011, merger
eDreams 2011, merger
Govoyages 2011, merger
Rumbo 2012, $81M
lastminute.com 2015, $120M
Jetcost 2013, N/A
bravofly (founded)
Volagratis (founded)
Etraveli 2015, €235M
Travelstart2010, N/A
Gotogate2009, N/A
Seat24
SRG Online
LateRooms.com 2006,
GBP120M
HotelBeds Group sold
AsiaRooms.com
2007, $67.5M
Transat - French Unit 2016, $62M
Öger Tours 2010, N/A
Hotels4U.com 2008, GBP 21.8
M
Elegant Resorts 2008, N/A
MyTravel Group 2007, merger
Kuxun.cn 2009, $12M
holidaylettings.co.uk
2010, N/A
Oyster2013, N/A
LaFourchette2014, $140M
Viator 2014, $200M
Iens.nl2015, $11M
Dimmi2015, N/A
Accoleo 2011, N/A
CrashPadder 2012, N/A
NabeWise 2012, N/A
Localmind 2012,N/A
Fondu 2012, $0.6M
Vamo 2012, N/A
Tuniu2015, $500M
round
Yongche2013, $60M
round
ToursForFun2014, $100M
Tujia2014, $100M
round
eLong2015, $400M (38% stake)
Travelfusion2015, $160M
MakeMyTrip2016, $180M (27% stake)
Qunar2015, (45%
stake)
Suanya2015, $16M
TravelBook.ph2015, n/a
Blacklane2014, $3.3M
round
Tripping2014, funding
round
TravelBook.ph2013, joint
venture
Mytour.vn2012, joint
venture
Pegipegi.com2012, joint
venture
More data available online
Fragmented European OTA landscape
21 View underlying data » https://app.dealroom.co/lists/10053
Mid-sized online tour operators will likely seek scale via strategic combinations, exits or private equity sponsored roll-up
More data available online
1. Introduction
2. Macro view
3. Strategic landscape
4. Funding & valuation data
22
Table of contents
View underlying data » https://app.dealroom.co/funding-rounds?industries=travel.must
23
Quarterly funding is trending upward, albeit skewed by a few large rounds
View underlying data » https://app.dealroom.co/exits?industries=travel.must
Selected recent exits
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Date Target Acquiror Transaction Value Selling Investors Previously Invested Capital
May-16 Splendia Voyage Prive n/a Omnes Capital, Alten Capital €4.3M
May-16 Hotelbeds Group Cinven (consortium) €1.2B TUI n/a
Apr-16 HouseTrip TripAdvisor n/a Index Ventures, Balderton Capital, Accel Partners €54.3M
Apr-16 onefinestay Accor Hotels €148MPROfounders Capital, Index Ventures, Canaan Partners , Intel Capital, Accor Hotels, David Magliano
€73.5M
Mar-16 Capitaine Train / Captain Train TheTrainline.com €165MOleg Tscheltzoff, Alven Capital, Index Ventures, CM-CIC Capital Prive, TheTrainline.com, Xavier Niel
€9.6M
Feb-16 Kuoni EQT Private Equity $1.4BVeraison Capital AG, Schroders, UBS Fund Management, Classic Fund Management, Go Investment Partners
public
Nov-15 Hostelworld.com IPO €245M Hellman & Friedman €202.5M (acquisition)
Oct-15 Etraveli ProSiebenSat1 Media AG €235M Segulah Advisor AB n/a
Jan-15 TheTrainline.com KKR €450M Exponent Private Equity n/a
Mar-14 CarTrawler BC Partners, Insight Venture Partners €440M ECI Partners, founders €50M
(50% stake)
View underlying data » https://app.dealroom.co/companies?hq_regions=Europe+incl+Israel.must&industries=travel.must&sort=-total_funding
25
The most funded companies
View underlying data » https://app.dealroom.co/funding-rounds?industries=travel.must
26
The largest rounds
27
The most active funds
View underlying data » https://app.dealroom.co/markets/industries/travel/top-funds
Trading valuation multiples
28
Transaction valuation multiples
29 View underlying data » https://app.dealroom.co/exits?industries=travel.must
More data available online
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