Monaker Group Offers a New Approach to the Vacation Rental and Tourism Industry

07.18.2017

The company’s primary focus is to be a business to business supplier, offering major online travel distribution companies access to its instant booking Vacation Rentals properties by way of its API or a white label solution. This allows well established travel distribution partners immediate entry into the rapidly growing Alternative Lodging Rental (ALR) space. Monaker’s vacation rental products are formatted and bookable within the parameters of the travel distributorMKGI2s’ website. This low cost marketing solution delivers Monaker products to websites that already have millions of travel shoppers as opposed to spending significant marketing money to attract consumers to their website.

The Company is in final stages of integration with its first major travel distributor to offer Monaker’s ALR inventory through their channels and anticipates several additional contracts this year.

The company also recently launched its NextTrip website, which features 1.4 million vacation rental properties for instant booking of Alternative Lodging Rentals as well as providing consumers comprehensive travel services including hotel, cruise, car rental and tour bookings through its own consumer facing website and app.

Highlights

– Monaker Group’s 1.4 million instantly bookable vacation rentals expected to grow to over 2 million as it processes already contracted inventory.

– Approximately 65 percent of equity is held by insiders and directors, who have mostly funded the company’s travel business and technology build, inspiring more confidence for retail investors.

Monaker Group Inc. (MKGI) is a logistic company, expanding its portfolio through the integration of technology and tourism. The company presents an interesting investment opportunity as it gears to carve a niche in the online tourism market. It recently launched its proprietary booking engine and secured substantial inventory for instant booking of vacation rental properties. It further plans to introduce Artificial Intelligence to smoothen the process of online travel booking. The stock has shown solid growth in the recent past, which is expected to grow further as the Monaker Group goes ahead with its plans.

The online tourism market is expected to be worth over $817 billion by 2020 while the global vacation rental market is likely to touch $193.89 billion by 2021.

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The market is still in a nascent stage and with the launch of its website, and pending integration with its first major distribution partner, Monaker Group is strategically positioning itself in the growing market. The company has also taken the initiative of making all its ALRs instantly bookable.

With 1.4 million instantly bookable ALRs, Monaker Group has surged past the industry veteran Airbnb which has only a million instantly bookable listings, putting the company in good stead. However, unlike Airbnb, Monaker Group is not restricted to merely ALRs, it also offers 200,000 hotels, 400 airlines, all major car rental companies, and 10,000 tourist activities, making it a one-stop shop for all your travel needs through its NextTrip.com website. Monaker Group is also neck to neck with another industry major Booking.com, which claims to have 1.3 million bookable accommodations (a mixture of vacation rentals, Bed & Breakfasts and conventional hotels) on its website. As mobile net surfing is gaining ground, the company has also launched its app for both Android and iOS operating systems. The simultaneous launch of the website and the app will help Monaker Group in gaining synergies. Monaker Group expects its total ALRs listings to jump from 1.2 million to more than 2 million as it is still in the process of uploading and certifying its additional inventory from secured contracts.

The company plans to further boost its position in the ALRs segment as it intends to launch Phase II in late summer this year. Under this phase, it is expected to launch group planning, cruise booking as well as restaurant reservations. This strategy will help Monaker Group in differentiating itself from other ALRs players such as Airbnb as the company now provides a whole gamut of travel services. Its upcoming NextTrip planner will also let the users import their bookings from other websites, adding further to the user experience. Such comprehensive portfolio of services is expected to increase customer stickiness and thus boost the overall customer base for the company.

Monaker Group is also working on its technology front as tourism industry evolves in the digital age. The company introduced its Monaker Booking Engine (MBE) last year, which allows the users to carry out customized search for ALRs on the website. It is also collaborating with industry partners to promote the use of MBE on their booking platforms. Monaker Group has already signed with one such partner and the numbers are likely to increase this fiscal. It further plans to augment the search function with the integration of the search engine with Artificial Intelligence (AI). The integration will likely result in smoother functioning and reduced decision- making time.

Apart from operational innovation and technological advancements, Monaker Group is also working on the financial front. It changed its corporate structure which resulted in $40 million worth deferred tax credit, which the company will be eligible to set off against its future earnings. It also raised $3 million and $1.6 million through two separate equity issues this year. Currently, over 65 percent of the company’s equity is held by directors and insiders, ensuring that the major stakeholders do their best to increase their equity price. The company’s efforts to boost its position in the online travel market have shown their impact on its market price as well. In the past six months, the stock price has gainedover 12 percent. It shows a zig zag pattern where every dip offers a good investment point. As the company moves ahead with its plans, the stock is expected to move closer to its 52 week highs. However, there are certain risks attached to the company as well. The stock has shown volatility in the past, which may continue in the future as well. Thus, the stock is recommended to investors with a medium to high risk appetite. Another risk factor is related to the operational area of the company, where it is expected to face stiff competition from established players in the market such as Priceline.com (PCLN), TripAdvisor Inc. (TRIP), Expedia (EXPE), HomeAway (AWAY) bought by Expedia, and Airbnb. Such competition may strain the company’s potential margins. However, Monaker Group is likely to use technological innovation to gain an edge over its competitors and reduce the impact of competition. Overall, Monaker Group remains an attractive investment opportunity for medium term investors.

 

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