$MKGI, CEO shareholder letter
Dear Shareholders, Over the past 6 months, Monaker Group has undergone a significant transformation in order to position Monaker in the center of the “alternative lodging” space. We have made great strides, including the announcement earlier this month stating the addition of over 150,000 new real-time bookable properties into our inventory, bringing our current inventory level to 250,000 properties. While this inventory is still small in relative terms to the two largest industry players, it is only the first of numerous in-hand contracts that Monaker is in the process of integrating and uploading onto its travel website – www.nexttrip.com. We anticipate to have uploaded over one million properties by this summer, placing us in the top three in the industry. While this is a significant milestone, there is a new feature that we believe is every bit as important as the great inventory offerings: real-time booking. This is a feature most rivals in the alternative lodging space do not have, relying instead upon a time lag between contacting the owner and waiting up to 24 hours before being able to confirm a property’s rental status and booking. This gives Monaker’s NextTrip a strong competitive advantage.
In addition to the significant inventory and booking capabilities, Monaker has also began to seek out key distribution platforms with long-time industry partners. We have already announced distribution partners in the travel agency business (ITO – 20,000 agents and Mark Travel – 70,000 agents), travel clubs (customtravelclubs.com) and online bidding space (uBid.com). These are the first of numerous business-to-business distribution platforms underway which are expected to create a solid base of revenue in order to grow out our direct to consumer platform and business for NextTrip.
Some Background
Alternative lodging is still in its infancy with the two key players - Airbnb and HomeAway - representing roughly 2.5 million of the 20 million estimated vacation lodging properties (per the leading industry experts - Phocuswright). A recent industry Report wrote, “The alternative lodging industry is in a significant growth phase with current estimates of $100 billion for the industry and growing to $169 Billion by 2019” (source). This space is viewed as the hottest area in travel and is showing no signs of slowing as more people discover the value of renting a vacation home versus a conventional hotel.
To date, these two key players have dominated this area and by this summer, Monaker’s NextTrip should rival them in inventory offerings.
Airbnb valuation highlights include:
a pre-market valuation of $25.5 Billion
a growth rate of 139%
over 1.5 million vacation rooms/property listings
HomeAway valuation highlights include:
a growth rate of 35%
over 1.1 million property listings
acquired by Expedia in December 2015 for $3.9 Billion (Expedia’s largest purchase ever).
Monaker’s real-time booking capabilities combined with its expected 1.2 million properties should place Monaker into the center of this strategic, burgeoning space. Attached is a quick summary metric for Monaker (NextTrip) when compared to peers. The table shows Monaker is currently trading at approximately 0.3 times its 2017 financial projections. The industry trades at about 6 to 7 times revenues and the Airbnb valuation is approximately 16 times revenues. Under this model metric the stock could trade in the $20+ range.
In closing, over the past 7 months Monaker has quietly gone about restructuring itself into a key player in the alternative lodging travel space. The opportunity is spectacular and we are now laser focused on the prize. Monaker expects to file its year-end audit in early May and is working with its investment banker on positioning for an up-listing from the OTC Markets to a larger recognized exchange for greater visibility and liquidity for investors. The coming weeks and months should be dynamic as we hit further inventory milestones, integrate the NextTrip platform with several major business partners, and complete the platform architecture accelerating into the B2B and B2C directives.
