Online travel report by Dealroom June 2016

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Information about Online travel report by Dealroom June 2016

Published on July 1, 2016

Author: yoramw

Source: slideshare.net

1. Online Travel: a Deep Dive Europe and beyond June 2016

2. 1. Introduction 2. Macro view 3. Strategic landscape 4. Funding & valuation data 2 Table of contents

3. 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

4. Yoram Wijngaarde Founder of Dealroom.co Former tech, media and telecom M&A advisor at Lehman Brothers and NOAH Advisors Authors and contributors 4 Julien Puls Content curator With Dealroom since 2014. Formerly at CMB Capital Université 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, 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, 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, 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, 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) Minube is a leading UK based travel guide, a community of over 1.5 million like-minded travelers. Carlos was formerly 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. Nico van der Veen (Founder & CEO, MaxMind) MaxMind is an independent connector between hotels and OTA's, delivering real-time rate and availability data, reservation software suite and reservation API essentials.

5. 5 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

6. 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 6 1. Market industry interviews. 2. Statisa. 3. PhocusWright. Core travel segments

7. 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) Booking Tiqets (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) P2P Yestudent (budget) Handiscover (disabled) MyTwinPlace (home share) Click & Boats, Barqo (boats) Homestay (vacation rentals) Sailsquare (sailing) Trip4real (tours) 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 tools Advalley (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) Apps Touchotel (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

8. 1. Introduction 2. Macro view 3. Strategic landscape 4. Funding & valuation data 8 Table of contents

9. Bookings of $1.3 trillion globally of which over $450 billion online ... 9 Source: PhocusWright 2015 estimates and 2010-2015 % CAGR. Eurostat. Dealroom.co analysis. Excludes managed business travel. Booking volume by type Booking volume by geography

10. 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, Opodo Govoyages $ 25B firm value $ 1B firm value $ 625M firm value = 6.4 x $ 94M EBITDA Online travel is dominated by Priceline, Expedia, Airbnb, and Google 10 Source: PhocusWright 2015, adjusted for acquisitions, equity research, Dealroom estimates. $ 68B gross bookings $ 78B gross bookings $5B $12 B $ 9B

11. But there is still plenty of room to grow, via existing and new channels 11 Source: PhocusWright 2015, adjusted for acquisitions, equity research, Dealroom estimates. Excludes managed business travel. Global market share UK, France, Germany

12. Offline still accounts for over 60% of bookings (except for low cost airlines) 12 Source: 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 etc A $41 billion opportunity for innovative, flexible and customisable travel solutions Skyscanner etc. Lastminute, Unister etc.

13. 13 Source: 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. 14 Mobile bookings are still nascent European online booking volume European mobile booking volume Online

15. 1. Introduction 2. Macro view 3. Strategic landscape 4. Funding & valuation data 15 Table of contents

16. Expansion of accommodation types 16 City $180B bookings (3) Rural $10B (3) Beach | Ski $180B bookings (3) Hotels B&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 Expedia TUI Lastminute Unister 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.

17. GuestsHotels Booking dominates hotel distribution chain, mainly via paid search 17 circa €80 €100 Hotel Search Trivago Kayak HundredRooms AllTheRooms HomeToGo HoliduHotelier Stack: Loyalty & CRM PMS (Property Management System) Booking Engine Channel Manager Reputation management Direct MaxMind, Avvio, Triptease, Advalley Expedia, Airbnb ... Tour Operators TUI, Thomas Cook, ... GDS HotelBeds Consumer Stack: Google search (and Google Hotel Finder) circa €20 Source: Dealroom.co Note:€20 is indicative cost per booking. Booking commission typically ranges from 10-30%. On-Demand Apps: HotelTonight Touchotel Dayuse Polarsteps Ulmon TRAFI Blink Booking (Groupon)

18. 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 18 Source: 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, RateTiger Siteminder, 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

19. 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 revenues 2015 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 Ownership Publicly 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

20. 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 strategy Market share Hotel stack Diversify Market share Diversify Unknown Increase online scale Increase online scale Divesting Buying tour operators Adding B2B classifieds models Small acquisitions Strategic VC investments Strategic VC investments Selected Acquisitions RocketMiles 2015, $20m PriceMatch 2015, N/A Hotel Ninjas 2014, N/A Buuteeq 2014, N/A OpenTable 2014, $2.6B Kayak 2012, $1.8B Rentalcars 2010, N/A Swoodoo 2010, N/A Agoda 2007, N/A Booking.com 2005, $135M 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 Go Voyages 2011, merger Lastminute.com 2015, $120M Jetcost 2013, N/A Rumbo 2012, $81M Bravofly (founded) Volagratis (founded) Etraveli (Seat24 + SRG Online) 2015, €235M Travelstart 2010, N/A Gotogate 2009, N/A Transat - French Unit 2016, $62M Isango! 2013, N/A HotelBeds Group sold AsiaRooms 2007, $67.5M LateRooms 2006, GBP120M Öger Tours 2010, N/A Hotels4U.com 2008, GBP 21.8 M Elegant Resorts 2008, N/A MyTravel Group 2007, merger HouseTrip 2016, N/A Iens.nl 2015, $11M Dimmi 2015, N/A LaFourchette 2014, $140M Viator 2014, $200M Oyster 2013, N/A Holidaylettings. co.uk 2010, N/A Kuxun.cn 2009, $12M CrashPadder 2012, N/A NabeWise 2012, N/A Localmind 2012,N/A Fondu 2012, $0.6M Vamo 2012, N/A Accoleo 2011, N/A MakeMyTrip 2016, $180M (27% stake) Tuniu 2015, $500M round Tujia 2015, $300M round eLong 2015, $400M (38% stake) Travelfusion 2015, $160M Qunar 2015, $7B merger ToursForFun 2014, $100M Yongche 2013, $60M round TravelBook.ph 2015, n/a Blacklane 2014, $3.3M round Tripping 2014, funding round TravelBook.ph 2013, joint venture Mytour.vn 2012, joint venture Pegipegi.com 2012, joint venture More data available online

21. 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

22. 1. Introduction 2. Macro view 3. Strategic landscape 4. Funding & valuation data 22 Table of contents

23. View underlying data » https://app.dealroom.co/funding-rounds?industries=travel.must&locations=Europe.must 23 Quarterly funding is trending upward, albeit skewed by a few large rounds

24. View underlying data » https://app.dealroom.co/exits?industries=travel.must&locations=Europe.must Selected recent exits 24 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 €148M PROfounders Capital, Index Ventures, Canaan Partners , Intel Capital, Accor Hotels, David Magliano €73.5M Mar-16 Capitaine Train / Captain Train TheTrainline.com €165M Oleg Tscheltzoff, Alven Capital, Index Ventures, CM-CIC Capital Prive, TheTrainline.com, Xavier Niel €9.6M Feb-16 Kuoni EQT Private Equity $1.4B Veraison 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)

25. 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

26. View underlying data » https://app.dealroom.co/funding-rounds?industries=travel.must 26 The largest rounds

27. 27 The most active funds View underlying data » https://app.dealroom.co/markets/industries/travel/top-funds

28. Trading valuation multiples 28

29. Transaction valuation multiples 29 View underlying data » https://app.dealroom.co/exits?industries=travel.must More data available online

30. Rich data and analytics on private tech companies. https://app.dealroom.co

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