Online Travel: a Deep Dive

Europe and beyond

June 2016
 Table of contents
1. Introduction

2. Macro view

3. Strategic landscape

4. Funding & valuation data

2
 About this report
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
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

10,000+ contributors Curation & research Big data analytics on

(founders, VCs, …) by Dealroom’s team 500,000+ companies

3
 Authors and contributors
Yoram Wijngaarde
Founder of Dealroom.co
Former tech, media and telecom M&A advisor at Lehman Brothers and NOAH
Advisors
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.
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.
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).
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
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.
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.
Editors
Julien Puls
Content curator
With Dealroom since 2014. Formerly at CMB Capital
Université Jean Moulin, Lyon
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.
Contributors
John Erceg (private investor, hotelier, serial entrepreneur) RJ Friedlander (Founder & CEO, ReviewPro)
Founder of Budgetplaces, sold in 2011 to private equity. Over 17 years experience in Internet and technology
MBA from IESE business school, Worldwide Market in Europe, the US and Asia. Led projects that have
Development Manager for HP. From California, lived in generated more than $300 million in revenue. Senior
Barcelona since 1994. executive at Grupo Planeta for about 10 years.
Jose Luis Martinez (CEO at HundredRooms)
Patrick Martin (Partner - LD&A Jupiter Corp Finance)
Former Head of Kayak in Spain, and Managing
M&A advisor in media & tech since 1993. Former Head of
Director of Spain and Portugal. Former Director for
Media at Alegro Capital, Co-CEO of 2k Media, and Managing
Spain eDreams ODIGEO. Advisor to Board of
Partner of Helkon Media.
Directors in Minube. In 2008 founded Viamedius.
Chris Moller (Campanda CEO & founder, Möller Ventures) Elliott Pritchard (CMO, Triptease)
Campanda is a booking platform for RVs which raised €5m Former Chief Marketing Officer at Travel Republic, he
series A last year. Chris is also the former CEO and founder has assumed leading positions at P&O Cruises,
of erento, a marketplace for renting goods and services, Kuoni, and MarketingNet.
sold in 2011 to Russmedia.
Friedrich von Scanzoni (CEO, Burda Asia) Axel Schmiegelow (CEO of iTravel)
Serial entrepreneur focused on the web, social
Broad management experience in digital media (13 years),
media, and software. itravel is an experience-based
in start-up, growth and restructuring environments. Former
online and mobile tour operator that offers leisure
Managing Director International at HolidayCheck and VP of
travelers a platform to fully customize trips.
VP Corporate Development at Tomorrow Focus.
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.
4
 Introduction
■ 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
Online ■ However, “offline and other channels” does not necessarily equal “old-fashioned”. It includes
migration 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

■ 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
Market power ■ 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

■ 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
New
developments ■ 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

5
 Core travel segments
■ 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%
Meta-search ■ 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

■ 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
Booking ■ 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

■ 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
P2P
■ Other attractive segments include camper vans (Campanda), boats (Sailsquare), and cars (Blablacar)

■ 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
Packaged tours 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

■ 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
B2B tools ■ 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

■ The default online travel model has been “search & book”, but there is still a huge underserved “on-demand” consumer market

Apps ■ 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.
 Identified companies to watch
Seed stage
AllTheRooms (all room types)
Meta-search ComparaBUS (all ride types)
Tiqets (events)
HeyCaptain (boat rental)
Booking Campday (campings)
Loco2 (trains)
Yestudent (budget)
Handiscover (disabled)
P2P MyTwinPlace (home share)
Click & Boats, Barqo (boats)
Gruppal (Turkey)
Packaged tours Hey Jude (personal assistant)
Advalley (hoteliers)
B2B tools MaxMind (hotel GDS)
Poshberry (loyalty)
Touchotel (hotel)
Apps Polarsteps (diary)
Hot Hotels (hotel)
more seed stage »
View underlying data »
https://app.dealroom.co/lists/10049
Early stage
HundredRooms (rooms)
Holidu (vacation rentals)
Tripping (vacation rentals)
Kiwi.com (low cost flights)
Voopter (Brazil flights)
TravelPerk (business)
Couverts (dining)
Cruisable (cruises)
Stratajet (private jets)
Musement (guided tours)
Hipcamp (campings)
Campings.com (campings)
Homestay (vacation rentals)
Sailsquare (sailing)
TourRadar (tours)
Travelata (Russia)
Lola Travel (custom)
iTravel (custom)
Festicket (festivals)
Travador (packaged weekends)
Lodgify, Kigo (vacation rental)
Triptease (site conversion)
Channelrush (hoteliers)
BD4Travel (big data)
Alice (concierge)
Avvio (booking platform)
Dayuse (budget hotels)
Byhours (budget hotels)
Ulmon (guide)
TRAFI (journey planner)
HotelCloud (concierge, B2B2C)
more early stage »
Late stage Buyout stage
HomeToGo (rooms) Skyscanner (flights, CPA)
Momondo (flights, CPC)
Amoma (budget)
Budgetplaces (budget hotels)
Dreamlines (cruises)
HRS (hotels)
GetYourGuide (events)
Atrapalo (events)
Auto Europe (cars)
Hotel Urbano (hotels)
Motorhome Republic (motorhomes)
Tripsta (flights)
OneTwoTrip (flights)
Wimdu (vacation rentals)
9Flats (vacation rentals)
Campanda (camper vans)
Blablacar (ride share)
Travelbird (email deals)
Evaneos (France) Holidaycheck (Reviews)
Emesa (discounts) Unister (Germany)
Secret Escapes (club) Accor Hotels (Hotels)
Inspirato (club) Decolar (LatAm)
Viajanet (LatAm)
SilverRail (rail operators)
Eviivo (hoteliers)
Siteminder (hoteliers) TravelClick (hoteliers)
Snapshot (analytics) RateTiger (hoteliers)
Revinate (review analytics)
Reviewpro (review analytics)
HotelTonight (hotels)
More data
CityMapper (journey planner)
available online
more late stage »
7
 Table of contents
1. Introduction

2. Macro view

3. Strategic landscape

4. Funding & valuation data

8
 Bookings of $1.3 trillion globally
of which over $450 billion online ...
Booking volume by type Booking volume by geography

9
Source: PhocusWright 2015 estimates and 2010-2015 % CAGR. Eurostat. Dealroom.co analysis. Excludes managed business travel.
 Online travel is dominated by
Priceline, Expedia, Airbnb, and Google
$ 68B gross bookings $ 60B firm value
= 13 x $ 4.6B EBITDA
Booking, Kayak,
OpenTable, Agoda, ...

$ 78B gross bookings $ 17B firm value

= 10 x $ 1.7B EBITDA
Expedia, Trivago, HomeAway,
Orbitz, Travelocity, Wotif, ...

$ 9B $ 25B firm value

eDreams, Opodo
Govoyages

$12 B $ 1B firm value

$5B $ 625M firm value

= 6.4 x $ 94M EBITDA

10
Source: PhocusWright 2015, adjusted for acquisitions, equity research, Dealroom estimates.
 But there is still plenty of room to
grow, via existing and new channels
Global market share UK, France, Germany

11
Source: PhocusWright 2015, adjusted for acquisitions, equity research, Dealroom estimates. Excludes managed business travel.
 Offline still accounts for over 60% of
bookings (except for low cost airlines)
European booking volume by channel
Skyscanner etc. Via GDS, direct phone, travel agents, ...

$58 billion opportunity for:

Booking.com etc.
- Booking.com and other OTAs
- Hotelier’s direct online channel
- On-demand apps
Lastminute, Unister etc.
Traditionally the domain of TUI, Thomas Cook etc
A $41 billion opportunity for innovative, flexible and
customisable travel solutions

As percentage

Already 90% direct online

12
Source: PhocusWright 2015, adjusted for acquisitions, equity research, Dealroom estimates. Excludes managed business travel.
 UK and Germany stand out in size, but
Southern Europe offers more growth
Booking volume % volume growth

13
Source: PhocusWright 2015, adjusted for acquisitions, equity research, Dealroom estimates. Excludes managed business travel.
 Mobile bookings are still nascent
European online booking volume European mobile booking volume

Online

14
 Table of contents
1. Introduction

2. Macro view

3. Strategic landscape

4. Funding & valuation data

15
 Expansion of accommodation types
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.
City Rural Beach | Ski
$180B bookings (3) $10B (3) $180B bookings (3)

Expedia
Booking.com
TUI
Hotels Lastminute
B&B Unister
1 million properties (1) 7travel
(= 25 million rooms)

Bookable
Apartments, Rooms, Villas
1.5 million properties (2) Airbnb, Homeaway, Wimdu
(= circa 2 million rooms)

Hostels Hostelworld

Campers / Campings (€10B) Campanda, Motorhome Republic

Cruises Dreamlines

Meta-search: Trivago, Kayak, Hometogo, HundredRooms, Holidu, ….

Source: Dealroom.co, Euromonitor.
1. Of which about 250K in Europe.
2. Of which about 500K in Europe. 16
3. Europe: $50B in cities, $50B in beach & ski, $5B in rural. Excludes managed business travel.
 Booking dominates hotel distribution
chain, mainly via paid search
Hotels Hotel Guests
Search

circa

€80 €100
circa
Trivago
Kayak
€20 HundredRooms
AllTheRooms
HomeToGo
Hotelier Stack: Direct Holidu Consumer Stack:
MaxMind, Avvio, Triptease, Advalley
Google search
(and Google Hotel Finder)
Loyalty & CRM

PMS On-Demand Apps:

(Property Management System)
HotelTonight
Booking Engine Touchotel
Expedia, Airbnb ...
Dayuse
Channel Manager Polarsteps
Ulmon
Reputation management TRAFI
GDS Blink Booking (Groupon)
HotelBeds

Tour Operators
TUI, Thomas Cook, ...

Source: Dealroom.co 17
Note:€20 is indicative cost per booking. Booking commission typically ranges from 10-30%.
 Hotelier distribution stack
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 Direct Online Channels

Customer Retention
- Reputation management Buying traffic (cost per click)
- Google Hotel Ads (Hotel Finder)
(ReviewPro, Revinate) - Trivago Direct Connect (Expedia)
- Still in somewhat experimental phase
- Loyalty (Advalley) - In theory, hotel could outbid OTAs, if it can
get conversion rates on par
Integrated PMS, revenue
management and booking: Online presence
Eviivo - Online suite & booking engine
(Avvio, BookingSuite)
BookingSuite - Conversion optimisation (TripTease)

Walk in (= on-demand)
Guest management:
Alice (Expedia invested) Intermediated Channels
HotelCloud (app for guests) OTAs (agency model):
- Booking.com (15-30% commission)
- TripAdvisor Instant Booking (15%)
- AccorHotels opened its booking platform
Analytics dashboard: to independent hoteliers
Snapshot - Other OTAs
Channel Managers
Matching inventory with multiple distributors Tour operators (merchant model):
- GDS / Bedbanks (Hotelbeds).
TravelClick, RateTiger - Relationship with agent, not customer
Siteminder, Channelrush

18
Source: Dealroom.co
 Global Distribution Systems (GDSs)
still manage 20% of European travel
Amadeus Sabre Travelport Hotelbeds

Sabre
GDS Amadeus
Abacus (ownership stake)
Apollo Galileo Worldspan Hotelbeds

HQ Spain United States United States Spain

$1.3B
Market cap €18.3B $7.7B $1.7B
(April ‘16 acquisition price)

12 month share price

+2% +6% -16% private
performance

Net revenues
$3.9B $4.3B $3.0B $3.4B $2.2B $2.4B $1.1B $1.2B
2015 and 2016

EV / EBITDA
12.5x 11.5x 9.7x 8.6x 6.7x 6.0x 15x 12x
2016 and 2017

Publicly listed Publicly listed Publicly listed Cinven, Canada Pension Plan
Ownership (BC Partners, Cinven sold down (Silver Lake, TPG selling down (Blackstone sold down most of (acquired from TUI
ownershiP) ownership) ownership) in April 2016)

19
Source: PhocusWright 2015, Dealroom.co
 Industry consolidators
eDreams LastMinute ProSieben Thomas
Priceline Expedia TUI TripAdvisor Airbnb Ctrip Recruit
ODIGEO Group (via 7Travel) Cook

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

Market share Adding B2B

Market share Increase online Increase online Buying tour Small Strategic VC Strategic VC
Acquisition strategy Hotel stack Unknown Divesting classifieds
Diversify scale scale operators acquisitions investments investments
Diversify models

Selected Acquisitions Kayak HomeAway Opodo Rumbo Etraveli LateRooms. Öger Tours Kuxun.cn Accoleo Tuniu TravelBook.ph
2012, $1.8B 2015, $3.9B 2011, merger 2012, $81M 2015, €235M com 2010, N/A 2009, $12M 2011, N/A 2015, $500M 2015, n/a
2006, round
Booking.com Orbitz (incl eDreams lastminute.com Travelstart GBP120M Hotels4U.com holidaylettings. CrashPadder Blacklane
2005, $135M eBookers) 2011, merger 2015, $120M 2010, N/A 2008, GBP 21.8 co.uk 2012, N/A Yongche 2014, $3.3M
2015, $1.6B HotelBeds M 2010, N/A 2013, $60M round
Hotel Ninjas Govoyages Jetcost Gotogate NabeWise
Group round
2014, N/A Trivago 2011, merger 2013, N/A 2009, N/A Elegant Resorts Oyster 2012, N/A Tripping
sold
2012, $632M 2008, N/A 2013, N/A ToursForFun 2014, funding
Buuteeq bravofly Seat24 Localmind
(62%) AsiaRooms. 2014, $100M round
2014, N/A (founded) MyTravel Group LaFourchette 2012,N/A
com
Travelocity 2007, merger 2014, $140M Tujia TravelBook.ph
PriceMatch Volagratis SRG Online 2007, $67.5M Fondu
2015, $280M 2014, $100M 2013, joint
2015, N/A (founded) Viator 2012, $0.6M
Transat - round venture
Wotif 2014, $200M
OpenTable French Unit Vamo 2012,
2014, $658M eLong Mytour.vn
2014, $2.6B 2016, $62M Iens.nl N/A
2015, $400M 2012, joint
Auto Escape 2015, $11M
Rentalcars (38% stake) venture
2014, $85M
2010, N/A Dimmi
Travelfusion Pegipegi.com
CarRentals. 2015, N/A
Agoda 2015, $160M 2012, joint
com
2007, N/A venture
2008, N/A MakeMyTrip
Swoodoo 2016, $180M
Venere
2010, N/A (27% stake)
2008, N/A

Hotels.com
2001, N/A
More data Qunar
2015, (45%
stake)

available online Suanya

2015, $16M

View underlying data » 20

https://app.dealroom.co/lists/10048
Fragmented European OTA landscape
Mid-sized online tour operators will likely seek scale via strategic
combinations, exits or private equity sponsored roll-up

More data
available online

View underlying data » 21

https://app.dealroom.co/lists/10053
 Table of contents
1. Introduction

2. Macro view

3. Strategic landscape

4. Funding & valuation data

22
Quarterly funding is trending upward,
albeit skewed by a few large rounds

View underlying data »

23
https://app.dealroom.co/funding-rounds?industries=travel.must
 Selected recent exits
Transaction
Date Target Acquiror Selling Investors Previously Invested Capital
Value

May-16 Splendia Voyage Prive n/a Omnes Capital, Alten Capital €4.3M

May-16 Hotelbeds Group Cinven (consortium) €1.2B TUI n/a

Index Ventures, Balderton Capital, Accel

Apr-16 HouseTrip TripAdvisor n/a €54.3M
Partners

PROfounders Capital, Index Ventures,

Apr-16 onefinestay Accor Hotels €148M Canaan Partners , Intel Capital, Accor €73.5M
Hotels, David Magliano

Oleg Tscheltzoff, Alven Capital, Index

Mar-16 Capitaine Train / Captain Train TheTrainline.com €165M Ventures, CM-CIC Capital Prive, €9.6M
TheTrainline.com, Xavier Niel

Veraison Capital AG, Schroders, UBS

Feb-16 Kuoni EQT Private Equity $1.4B Fund Management, Classic Fund public
Management, Go Investment Partners

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

BC Partners, Insight Venture €50M

Mar-14 CarTrawler €440M ECI Partners, founders
Partners (50% stake)

View underlying data » 24

https://app.dealroom.co/exits?industries=travel.must
 The most funded companies

View underlying data »

25
https://app.dealroom.co/companies?hq_regions=Europe+incl+Israel.must&industries=travel.must&sort=-total_funding
 The largest rounds

View underlying data »

26
https://app.dealroom.co/funding-rounds?industries=travel.must
 The most active funds

View underlying data »

27
https://app.dealroom.co/markets/industries/travel/top-funds
Trading valuation multiples

28
 Transaction valuation multiples

More data
available online

View underlying data » 29

https://app.dealroom.co/exits?industries=travel.must
 Rich data and analytics
on private tech companies.

https://app.dealroom.co