The State of Online Travel Agencies - 2019 - Travel Tech Essentialist - Medium PDF

2/11/2020 The State of Online Travel Agencies - 2019 - Travel Tech Essentialist - Medium
The State of Online Travel Agencies -

2019
Full year 2018 results and key takeaways for 10 publicly traded online
travel companies: Booking, Expedia, Ctrip, eDreams Odigeo, Despegar,
On The Beach, Lastminute, MakeMyTrip, TripAdvisor, Trivago
Mauricio Prieto Follow

Mar 28, 2019 · 18 min read
All publicly traded online travel companies have reported their 2018 results.
The first section of this report will cover how these 8 Online Travel Agencies
and 2 metasearch companies compare in terms of revenue, EBITDA,
Enterprise Value and marketing efficiency. In the second section, we will
take a closer look at each company and highlight some of their successes
and challenges.
Some highlights on the group’s 2018 results:

https://medium.com/traveltechmedia/the-state-of-online-travel-agencies-2019-8b188e8661ac 1/43
- Combined revenues grew at a weighed average of 11% and simple average

of 6%.
- Booking and Expedia account for 79% of the combined revenue of the 8
OTAs in this report, as they continue to build up their non-traditional
inventory to compete against the likes of Airbnb.
- All companies in the report have shown significant positive EBITDA figures
for all the years in the reports and double digit EBITDA/Revenue margins
ranging from 10% to 40% with the exception of:
MakeMyTrip: With large and increasingly negative losses MakeMyTrip

has never shown a profit and shows a worrying EBITDA/Revenue
margin of negative 20%. This together with 20% negative revenue
growth place MakeMyTrip as the worst performer in the group and in a
different category by itself.
Trivago: Trivago’s EBITDA/Revenue margin of close to 1% is an order of

magnitude below its peers. Again, with a fall in revenue of 11% last year,
this puts Trivago in the far from stellar category.
Although Ctrip has shown stellar revenue and EBITDA growth over the
period, its EBITDA/Revenue margin of 10% is the worst after
MakeMyTrip and Trivago, and it is also the only company in the group
(apart from MakeMyTrip) which has posted a year of negative EBITDA
in the period studied.
- MakeMyTrip’s and Trivago’s EV/EBITDA multiple shows an unusually high

valuation, particularly when taking into account their challenges and
underperformance.
- Ctrip and OnTheBeach saw the highest growth in 2018, and Lastminute
also had a strong year with successes on its strategic goals as well.
- eDreams Odigeo remains the largest OTA in Europe in Revenue and

EBITDA, but it is losing market share, growing at half the rate of the
European online travel market. The other European OTA in the group,
Lastminute Group, had a solid year of growth, with trends aligned with its
stated strategic goals.
- The largest OTA in Latin America, Despegar, had a subpar year. Its results
were particularly impacted by regional macroeconomic difficulties and
currency fluctuations.
- TripAdvisor is 37% larger in revenues than Trivago, but 20X larger in

EBITDA. Both are impacted by reduced investment by large OTAs like
Expedia and Booking, but TripAdvisor’s EBITDA levels don’t compare with
Trivago’s barely positive EBITDA (never above €28 million over the past 5
years.
_________________________________________________________________
__
Sign up to Travel Tech Essentialist, my brief newsletter sent every two weeks
with my pick of the top 10 news on the online travel ecosystem.
_________________________________________________________________
__
1. 2018 Results
1.1. Revenues
Note: eDreams and MakeMyTrip scal year ends March of the following year. eDreams and MakeMyTrip data shown
for 2017 and 2018 is calendar year (adding the 4 calendar year quarters). On The Beach scal year ends in
September. eDreams: All data comes from companies’ nancial statements.
Booking and Expedia account for 73% of combined revenues of the 10

online travel companies in this report, followed by Ctrip. The remaining 7
companies are responsible for 14% of total revenues.
In 2018, five of the ten companies in this analysis had revenue growth
above 10%, three grew below 5%, and two had revenue decreases of more
than 10%. OnTheBeach had the largest revenue growth in 2018 (+24.5%),
while the world’s largest OTAs — Booking, Expedia, Ctrip — had healthy
double digit growth.
2018 was a bad year for metasearches, with TripAdvisor growing at 3.8%
and Trivago falling by 17.9%. It was also a bad year for OTA regional
champions, with MakeMyTrip (India’s largest OTA) at -17.9%, Despegar
(Latin America’s largest OTA) barely growing at 0.2% and eDreams Odigeo
(Europe’s largest OTA) growing by 3.2%. The one notable exception was
Lastminute Group, which had a strong revenue growth of 14.2% .
Taking a more long term view of revenue growth, we see that with the
exception of Lastminute and eDreams Odigeo, all OTAs and metasearches in
this analysis have had strong compounded annual growth rates well above
10%. Ctrip’s CAGR growth has been spectacular at 41%.
2013–2018 CAGR except for the following; CAGR for Ctrip is for 2014–2018 period. For Trivago and
Lastminute is for 2015–2018. For Despegar and OnTheBeach is for 2016–2018 period. Ctrip, growth rates are
based on local currency in order to remove foreign currency uctuations. All euro and pound based OTAs are
also in their local currency.
If we ignore the two metasearches and just look at the 8 OTAs in this
analysis, the three largest (Booking, Expedia and Ctrip) concentrated 93%
of total revenue for the 8 Online Travel Agencies.
Revenue share of the total revenue of the 8 Online Travel Agencies (Booking, Expedia, Ctrip, eDreams,
Lastminute, Despegar, MakeMyTrip, OnTheBeach). For those OTAs that report in foreign currency, I have
converted their yearly revenue at the average conversion rate for each of the years
1.2. EBITDA and Enterprise Value

MakeMyTrip continues to be the only public online travel company posting
EBITDA losses year after year. With a $172 million negative EBITDA, 2018
was no exception.
There is a very significant difference between the EBITDA of each of the

world’s top 4 Online Travel Agencies. Booking leads by a very large margin
with a 2018 EBITDA of $5750 million, followed by Expedia with $1970
million, Ctrip with $521 million and eDreams with €109 million.
Three Online Travel Agencies had EBITDA decrease from 2017 to 2018:
Ctrip (-7%), eDreams Odigeo (-9%) and Despegar (-24%). Trivago had the
largest percentage increase (+134%), followed by Lastminute (+60%). All

others had strong EBITDA growth rates between 15% and 27%.
Note: eDreams and MakeMyTrip scal year ends March of the following year. eDreams and MakeMyTrip data shown
for 2017 and 2018 is calendar year (adding the 4 calendar year quarters). On The Beach scal year ends in
September. eDreams adjusted EBITDA. Lastminute core business EBITDA. All data comes from companies’ nancial
statements.
EBITDA margin (EBITDA/Revenues) is an assessment of operating

profitability. At 40%, Booking comes up with the healthiest ratio. Vacation
package specialist OnTheBeach also has a high EBITDA margin of 36%, 4
percentage points below 2017. With 21%, flight specialist OTA eDreams
Odigeo has the third highest EBIDTA margin, although down from 24% in
2017. On the low end, Trivago is at only 2%, and MakeMyTrip is on
negative territory.
EBITDA Margin. Source: Companies’ nancial statements
It’s interesting to see how these companies compare from a perspective of

the Enterprise Value to EBITDA multiple. EV is a measure of the company’s
total value (market cap + debt - cash) and EV/EBITDA is a relevant trading
multiple to evaluate companies that are trading cheap or expensive in
relation to comparables. It very surprising to see the very high multiples of
Trivago (88x) and MakeMyTrip (negative EBITDA, so ratio is not even
applicable), particularly given the latter’s severe underperformance and
negative EBITDA year after year. On the other end, Lastminute and
eDreams Odigeo seem to be trading at a too low multiple for companies
that, despite slower recent growth, have consistently been profitable with
solid EBITDA and EBITDA margin.
EBITDA is calendar year 2018. Enterprise Value is taken from Yahoo Finance.
It is difficult to understand how MakeMyTrip and Trivago can justify having

a higher Enterprise Value than eDreams, when all the financials seem to
point to the opposite direction. MakeMyTrip has been around for 20 years,
and the prospects of potential future earnings are looking bleaker for a
company that was founded 20 years ago and has not had a single quarter of
positive EBITDA since 2012. Trivago’s business model seems fragile.
Revenues are highly dependent on extremely high marketing spend, and
Trivago’s EBITDA is slightly positive. eDreams on the other hand, has had
continued revenue growth (albeit low) and has not had EBITDA below $100
million in the period analyzed in this report.
https://www.macrotrends.net/stocks/charts/MMYT/makemytrip/ebitda
1.3. Marketing
The two metasearch companies — TripAdvisor and Trivago — both lowered
their marketing spend in 2018. The one OTA that also decreased its spend
was MakeMyTrip. It decreased by 44%, equivalent to $200 million, which
could explain its lower revenue in 2018, although its EBITDA margin
worsened.
Ctrip had a 16% increase in marketing spend, mirroring its revenue growth.
After three years of marginal increases, eDreams Odigeo’s marketing
investment increased by 12% in 2018, but its revenues only grew by 3%.
eDreams and MakeMyTrip scal year ends March of the following year. eDreams and MakeMyTrip data shown for
2017 and 2018 is calendar year (adding the 4 calendar year quarters). On The Beach scal year ends in September.
Ctrip growth rates are based on local currency in order to remove currency rate impact. eDreams variable costs.
Booking: Performance + Brand. Trivago: Advertising expenses
The marketing over revenues ratio can point to the relative efficiency of
marketing spend. The higher the ratio, the more marketing pressure the
company requires to drive sales, although we also need to take into account
the nature of the product. Trivago, which has traditionally relied on
extensive offline marketing campaigns had a very high 80% ratio in 2018, a
slight improvement from previous years. eDreams Odigeo has the highest
ratio of all OTAs, with 65%, which can be explained in some part to its flight
product specialization. Expedia has been in the low 40’s for the past few
years, while Booking has shown better marketing efficiency results in the
low to mid 30’s. Ctrip (32%) and Despegar (33%) have the lowest ratios.
2. Key Takeaways
2.1. Booking Holdings
The world’s most valuable online travel agency delivers yet another high
revenue growth year. Brands include Booking.com (primarily
international), KAYAK, priceline (primarily North America), agoda
(primarily Asia-Pacific region), Rentalcars.com and OpenTable.
The strength of Booking.com and its relentless focus on the

accommodations product continues to fuel the group’s growth.
Source: Booking Holdings 2018 annual report
Booking continues to strengthen its position in alternative accommodations

in order to compete effectively against Airbnb in this growing category. As
of December 2018, 80% of Booking.com properties are homes, apartments
and other non-traditional places to stay (in 2017 it was 75%). 2018 growth
in non traditional properties was 47%, noticeably higher than the 10%
growth in hotels, motels and resorts.
Booking Holdings’ business is driven primarily and increasingly by its

international (outside the US) results, which consist of Booking.com,
agoda.com and Rentalcars.com, and the international businesses of KAYAK
and OpenTable. This classification is independent on where the consumer
resides.
Share of International (non-US) Revenues*

2015: 80%
2016: 84%
2017: 87%
2018: 89%
* International revenues consist of Booking.com, Agoda and
Rentalcars.com and the international businesses of KAYAK and OpenTable.
This classification is independent of where the consumer is located.
Booking Holdings’ marketing continues to be heavily focused on

performance marketing (search, metasearch…), with 89.7% of its total
marketing spend. The company announced at the end of 2017 an intention
to shift more towards brand advertising (TV, online video, online display),
but its brand marketing share in 2018 is only slightly above 10%, less than 1
percentage point above what it was in 2017.
Booking.com has been expanding its merchant model (where Booking

receives payments from travelers) to provide greater payment options for
both customers and travel providers. Merchant revenues grew 40% in 2018,
significantly above the 7.9% of agency revenues. It is also worth noting the
27% growth in advertising revenues, almost doubling the total revenues
growth rate. The advertising growth is primarily due to the inclusion of
$168 million in revenue related to the Momondo Group for 2018, compared
to $72 million in 2017 (it was acquired in July 2017).
2.2. Expedia Group

Expedia revenues grew 12% in 2018. The group’s core OTA revenues grew
slightly less (11%). Homeaway was the business unit with the highest
growth (29%), while Trivago had a year on year decrease of 7%.
Expedia’s core OTA revenues in 2018 were 75% of total revenues, same as
in the previous year. Homeaway’s share of group revenues continues to
climb, reaching 10% in 2018, while Trivago’s declined from 11% in 2017 to
9% in 2018.
Expedia Group, Revenue by Segment. Source: Expedia 2018 Annual Results
On a revenue by product basis, lodging accounted for 69% in 2018 (up from
65% in 2017), air accounted for 8% (same as in 2017), advertising and
media accounted for 10% (down from 11%), and all other revenues
accounted for the remaining 13%.
Lodging revenue increased 13% in 2018 on a 13% increase in room nights

stayed. Air revenue increased 12% in 2018 on a 5% increase in air tickets
sold and a 7% increase in revenue per ticket. Advertising and media
revenue increased 2% driven by growth in Expedia Group Media Solutions
that offset the decline in Trivago revenues. Other revenue increased 14% in
2018 reflecting growth in the travel insurance and car rental products.
Expedia Group, Revenue by business model. Source: Expedia 2018 Annual Results
International revenue represented 55% of total revenue in 2018 (same as in

2017), growing 12% year on year, (including 1 percentage point of positive
foreign exchange impact). Domestic revenue growth slowed down from
21% in 2017 to 11% in 2018.
2.3. Ctrip
With a 42% share of total revenues in 2018, transportation revenues
remains the largest segment, although it has decreased from 45% in 2017.
The Accommodations and Packaged Tours segments have gained share vs

2017, and now account for 37% and 12% of total revenue respectively.
Ctrip saw a 16% increase in net revenue in 2018. Transportation, Ctrip’s

largest product segment, had the lowest year-on-year growth rate with just
6%. Accommodations, Packaged Tours and Corporate travel saw year on
year growth rates of 21%, 27% and 30%.
Ctrip, Revenue by Segment. Ctrip growth rates are based on local currency in order to remove currency rate
impact. Source: Ctrip 2018 nancial results
Ctrip’s international businesses sustained robust growth momentum. In the

fourth quarter of 2018, revenue generated from international business
made up around 1/3 of group revenue.
2.4. eDreams Odigeo

Includes 4 OTAs brands: eDreams, GoVoyages, Opodo, Travellink. And one

metasearch: Liligo.com
eDreams Odigeo is in the lackluster growth category, with 3.2% revenue

growth in 2018. This growth is less than half the rate of European online
travel, and barely keeping up with the total European travel market growth
rates. This said, it’s much better than European metasearch Trivago (-12%),
Indian OTA MakeMyTrip (-18%) and Latam’s Despegar (0.2%). And
eDreams Odigeo has proven to be able to consistency grow revenues with
high EBITDA margins.
Data for European market is taken from Lastminute’s 2018 annual report
In Q2-Q4 2018 period, EBITDA fell by 11% year on year. In this period,
bookings fell by 12% in eDreams Odigeo’s core markets and grew 6% in
expansion markets, which points to a significant market share loss in its
traditionally strongest markets.
The company has stated that one of its strategic goals for the last 5 years has
been to diversify its revenues away from flights, but results don’t show
much success on this front.
Fiscal Year ends March of the following year. Elaborated from data in eDreams Odigeo FY 2017 and FY 2018
annual reports
eDreams Odigeo provides another breakdown of revenues that shows an

increase in “diversification revenues”. The company’s definition of
“diversified revenues” (flight ancillaries, travel insurance, flight
commissions…) still directly depends on the company’s ability to continue

to drive flight bookings.
“Classic Supplier Revenue” represents GDS incentives for Bookings mediated by us through GDSs and
incentives received from payment service providers. “Diversi cation Revenue”: revenue earned through
vacation products (car rentals, hotels and Dynamic Packages), ight ancillaries (reserved seats, additional
checkin luggage, travel insurance and additional service options), travel insurance, as well as certain
commissions, over-commissions and incentives directly received from airlines. “Classic Customer Revenue”
earned through ight service fees, cancellation and modi cation fees, tax refunds and mobile application
revenue. Source: eDreams Fiscal Year H1 2019
Marketing effectiveness ratio (marketing expenses / revenues) in calendar

year 2018 was 64.8% (spends $64.8 in marketing to generate $100 in
revenues), the highest among all OTAs in this analysis. It is also 6
percentage points worse than in 2013 and 5 percentage points worse than
in 2017. This high marketing expense ratio (compared to the industry) can
be explained in large part by eDreams’ flight product specialization. For this
same reason, eDreams has also one of the highest EBITDA margins in the
industry. The only other OTAs that have a better EBITDA margin than
eDreams are Booking and OnTheBeach.
2.5. Despegar.com
After a 27.5% revenue growth in 2017, Despegar’s revenue growth fell
sharply to 0.2% in 2018. EBITDA also went from +84% in 2017 to a 24%
fall in 2018. These bad results were strongly impacted by currency
devaluation (mainly in Argentina) and also by a macroeconomic crisis in
Argentina, Despegar’s largest market. Controlling for foreign exchange
fluctuations, revenues were up 22% in 2018. Excluding Argentina, adjusted
EBITDA was up by $9 million YoY in 2018.
A look at transactions and gross bookings by country and also by currency

shows how Argentina and currency devaluation dragged down overall
results.
Source: Despegar.com 2018 results
Mobile transactions were up 34% in 2018, accounting to 36% of total

transactions (30% in 2017).
Despegar has successfully diversified its revenue mix away from flights.
Revenue from hotels and packages represented 50% of total revenues in
2016, 54% in 2017 and 60% in 2018.
2.6. Lastminute Group

Includes 6 OTAs: Lastminute.com, Bravofly, Volagratis, Rumbo,
Crocierissime.it, Weg.de. And 2 metasearch: Jetcost and Hotelscan.
Lastminute had a strong year in 2018, growing revenues by 14.2% and core
business EBITDA by 60% while showing clear signs of succeeding in their
declared goal of diversifying away from flights.
For the first time, Lastminute Group’s 2018 Travel & Leisure revenues (DP,
TO, Hotels, Cruises) were higher than their flight revenues, with an
impressive year on year growth of 39%. Travel & Leisure revenues now
represent 43% of total revenues (up from 35.6% in 2017), vs 39.6% for
Flights (down from 46.2% in 2017) and 17.2% for Meta.
Lastminute Group revenue breakdown. Source: 2018 annual report
As we see in the graph above, OTA Travel & Leisure revenue grew by a very
strong 39%, reaching €123.9 million in 2018, €34.5 million more than in
2017. Dynamic packages are a very strong contributor, with almost 50% of
Travel & Leisure revenues in 2018.
Lastminute Group, Dynamic Package revenues. Source: 2018 annual report
Lastminute’s core business EBITDA grew by 60% in 2018, driven by a

+112% EBITDA growth of its OTA business. What is behind this impressive
growth is Weg.de (adding €7.6 million in EBITDA) and OTA organic growth
(adding €8.5 million) mostly as a result of Dynamic Package growth.
Lastminute Group core business EBITDA. Data from Lastminute’s 2018 annual report
The integration of Weg.de, the german package holidays OTA acquired by

Lastminute late in 2017, is evident by the shared captured by Germany of
total Lastminute’s revenues.
Lastminute Group revenues by geography. Data from Lastminute’s 2018 annual report
As we saw in section 1.2, Lastminute is now part of the travel companies

with a strong double digit EBITDA/Rev margin.
2.7. MakeMyTrip
From a top and bottom line perspective, calendar year 2018 (FY ends in
March) was a disappointing year for the Indian leading OTA: 18% fall in
revenues and a negative EBITDA of $172 million (although a 16%
improvement vs 2017). This EBITDA is particularly worrisome given that
MakeMyTrip decreased its marketing spend by 44% in 2018, after doubling
it bot in 2016 and 2017.
Looking at Q2–Q4 2018, we can see that the revenue decrease was caused
by a revenue fall of 48% in MakeMyTrip’s hotels and packages product. Its
share of total revenues went from 67% in the 2017 period down to 49% in
2018. The other products had a year on year increase.
MakeMyTrip Revenue by Product. Source: MakeMyTrip 3rd scal Quarter results
MakeMyTrip has not had a positive EBITDA in any of the years included in
this report (2013–2018), a troubling situation for a company that has the
largest market share in India and that has been operating for 18 years.
MakeMyTrip also reports “adjusted revenues”, which represents IFRS

revenue after adding back promotion expenses (customer discounts,
customer acquisition costs, loyalty programs costs). Analyzing the evolution
of adjusted revenues, gross bookings, and product activity (air segments,
room nights, bus tickets), we do see a growth story.
MakeMyTrip Adjusted Revenue by Product. Source: MakeMyTrip 3rd scal Quarter results
MakeMyTrip Gross Bookings by Product. Source: MakeMyTrip 3rd scal Quarter results
MakeMyTrip Gross Bookings by Product. Source: MakeMyTrip 3rd scal Quarter results
2.8. On The Beach
On The Beach is a UK online retailer specialized in short haul beach

holidays. In 2017, it expanded into Sweden and Norway and in 2018 it
acquired Classic Collection Holidays (for £20m)and launched in Denmark.
With Classic Collection, On the Beach has now a B2B channel through
which they can access millions of short haul beach holidays that had
traditionally only been accessible offline.
On the Beach is the smallest in revenues among the 10 companies, but the
one with the highest year on year revenue growth (24.5%). It also has a
larger EBITDA than Lastminute, MakeMyTrip and Trivago. Part of this
growth however, is explained by Classic Collection, the B2B business
acquired in 2018.
Source: On The Beach 2018 Report
On the Beach’s branded and free traffic increased to 63.9% of overall traffic,
up from 59.3% in 2017. This is a significant share which allows the
company to grow organically, while also investing in performance
marketing for additional growth. The shift towards a greater share of
branded and free traffic is reflected in the company’s continuous
improvement in its efficiency ratio (marketing / revenues): 48% in 2016,
44% in 2017, 36% in 2018.
After significant growth of 51% in the first half of 2018, International

revenue (Sweden, Denmark, Norway) decreased by 5.9% for the full year.
Revenue was heavily impacted by an unusually hot summer in Scandinavia
leading to lower demand for holidays and widespread discounting of
distressed product by Sweden’s leading tour operators.
2.9. TripAdvisor
Hotel-based revenue has lost very significant ground since 2016. It has gone
from representing 80.4% of total TripAdvisor revenues in 2016, to 77% in
2017 to 72% in 2018. Not only has the share decreased, but also the
revenue amount went down by 4%. Looking at the hotel subcategories, it is
the click-based hotel revenue that is responsible for this decrease. The
display-based hotel advertising actually grew by 5% in 2018. It is evident
that both the intended conversion to a metasearch and direct booking

model has not produced the desired effects.
TripAdvisor’s non-hotel revenues, on the other hand, saw a solid 27% year-
on-year growth in 2018. They are now responsible for 28% of total
revenues, 5 percentage points more than in 2017. Three product lines are
included in the non-hotel revenues: experiences, restaurants and
alternative accommodations. Experiences and restaurants grew by 40% in
2018, while alternative accommodations dragged down the growth of the
non-hotel segment to 27%. Alternative accommodations apparently is no
longer a strategic focus for the company given the very strong competition
that they face from the likes of Airbnb and Booking.com. Skift reported that
TripAdvisor is considering a new way of reporting its earnings in order to
“be able to isolate the robust growth of experiences and restaurants”.
TripAdvisor continues to invest in its experiences business. On April 2018,

one day after Booking announced the acquisition of FareHarbor (a tours
and activities tech provider), TripAdvisor announced the purchase of
Bokun, an Iceland-based technology provider for tours, attractions and
experiences. As a result, TripAdvisor had a 60% increase in experience
providers and 90% increase in bookable products in 2018.
TripAdvisor, Revenue by product. (1) Consists of advertising revenue as well as transaction-based revenue
from instant booking. (2) Includes revenue from non-TripAdvisor-branded websites, including primarily
click-based advertising revenue and display-based advertising revenue generated through these websites.
Source: TripAdvisor 2018 nancial statements.
2.10. Trivago
Trivago revenue decreased by 11.6% in 2018 as a result of an 8% drop in
Qualified Referrals (1 QR = Trivago visitor click on an OTA or supplier
direct product offer) and a 3.6% lower Revenue per Qualified Referral
(metric that measures how effective Trivago is in monetizing the leads sent
to advertisers). Europe had the biggest decrease in referrals sent to
advertisers, but its RPQR grew due to a favorable exchange rate fluctuation.
Trivago Quali ed Referrals. Source: Trivago 2018 Annual Report
Trivago Revenue Per Quali ed Referral. Source: Trivago 2018 Annual Report
On the marketing front, Trivago reduced its advertising spend by €152

million or 17.2% in 2018 compared to 2017. It focused on reducing brand
marketing expenditures and increasing the return of performance
marketing campaigns. Of all the companies in this analysis, Trivago has the
highest ratio of marketing costs / revenues, at 80% (down from 85% in
2017).
Trivago continues to generate the majority of its revenues from the largest
two OTA: Booking Holdings (Booking.com, Agoda, etc…) and Expedia
Group (which owns Trivago).
Trivago Revenue Mix per Advertiser. Source: Trivago 2018 Annual Report
Despite falling revenues, Trivago increased its adjusted EBITDA from €6.7
million in 2017 to €15.6 million in 2018. Trivago expects a continued
improvement in EBITDA in 2019, estimating to close the year between €50
million and €75 million.
Trivago remains at a different category vs. its metasearch peer TripAdvisor

in its limited ability to generate EBITDA and revenue growth. This is
worrisome for a company which has been around for 14 years.
. . .
Sign up for my newsletter

Sign up to Travel Tech Essentialist, a newsletter sent every two weeks with my
pick of the top 10 news on the online travel ecosystem.
Email
Email
Sign up
I agree to leave Medium.com and submit this information, which will be

collected and used according to Upscribe's privacy policy.
Notes
-Expedia: Data for Marketing Costs field is Direct Selling and Marketing
(adjusted selling and marketing). Not including Indirect Selling and
Marketing. Adjusted EBITDA
-Booking: Data for Marketing Costs field is Performance Advertising +
Brand Advertising. Not including Indirect Sales and Marketing Costs. Data
for EBITDA field is Adjusted EBITDA.

-eDreams: Fiscal year ends March of the following year. eDreams data
shown for 2017 and 2018 is calendar year (adding the 4 calendar year
quarters). Data for Revenues = Revenue Margin. Data for Marketing Costs
= Variable Costs. Adjusted EBITDA.
-Lastminute: Revenue reported in 2014 and 2015 is Group Revenue. In
2016, 2017 and 2018 it is Core Business Revenue. For 2014–2015 Adjusted
EBITDA figures. For 2016–2018 Business EBITDA figures.
-Tripadvisor: Data for Marketing Costs = Selling & Marketing Direct Costs
(includes stock based compensation expenses). Data for Ebitda is Total
Adjusted Ebitda
-Trivago: Data for Marketing Costs = Advertising expense for annual data.
Revenue is total revenue: related parties + third parties.
-MakeMyTrip: Fiscal year ends march of the following year. Annual 2017
and 2018 is calendar year (adding the 4 quarters).
-Ctrip. Marketing = Sales and marketing
-Despegar. Selling and marketing
-On The Beach: Fiscal year ends September.
Online Travel Online Travel Agency Booking Expedia Tripadvisor
Discover Medium Make Medium yours Become a member

Welcome to a place where words matter. Follow all the topics you care about, and Get unlimited access to the best stories
On Medium, smart voices and original we’ll deliver the best stories for you to on Medium — and support writers while
ideas take center stage - with no ads in your homepage and inbox. Explore you’re at it. Just $5/month. Upgrade
sight. Watch
About Help Legal

The State of Online Travel Agencies - 2019 - Travel Tech Essentialist - Medium PDF

Hochgeladen von

Dokumentinformationen

Originaltitel

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

The State of Online Travel Agencies - 2019 - Travel Tech Essentialist - Medium PDF

Hochgeladen von

Copyright:

Verfügbare Formate

2/11/2020 The State of Online Travel Agencies - 2019 - Travel Tech Essentialist - Medium

The State of Online Travel Agencies -

Mauricio Prieto Follow

Some highlights on the group’s 2018 results:

- Combined revenues grew at a weighed average of 11% and simple average

MakeMyTrip: With large and increasingly negative losses MakeMyTrip

Trivago: Trivago’s EBITDA/Revenue margin of close to 1% is an order of

- MakeMyTrip’s and Trivago’s EV/EBITDA multiple shows an unusually high

- eDreams Odigeo remains the largest OTA in Europe in Revenue and

- TripAdvisor is 37% larger in revenues than Trivago, but 20X larger in

Booking and Expedia account for 73% of combined revenues of the 10

1.2. EBITDA and Enterprise Value

There is a very significant difference between the EBITDA of each of the

largest percentage increase (+134%), followed by Lastminute (+60%). All

EBITDA margin (EBITDA/Revenues) is an assessment of operating

EBITDA Margin. Source: Companies’ nancial statements

It’s interesting to see how these companies compare from a perspective of

It is difficult to understand how MakeMyTrip and Trivago can justify having

The strength of Booking.com and its relentless focus on the

Source: Booking Holdings 2018 annual report

Booking continues to strengthen its position in alternative accommodations

Source: Booking Holdings 2018 annual report

Booking Holdings’ business is driven primarily and increasingly by its

Share of International (non-US) Revenues*

Booking Holdings’ marketing continues to be heavily focused on

Source: Booking Holdings 2018 annual report

Booking.com has been expanding its merchant model (where Booking

2.2. Expedia Group

Expedia Group, Revenue by Segment. Source: Expedia 2018 Annual Results

Lodging revenue increased 13% in 2018 on a 13% increase in room nights

International revenue represented 55% of total revenue in 2018 (same as in

The Accommodations and Packaged Tours segments have gained share vs

Ctrip saw a 16% increase in net revenue in 2018. Transportation, Ctrip’s

Ctrip’s international businesses sustained robust growth momentum. In the

2.4. eDreams Odigeo

Includes 4 OTAs brands: eDreams, GoVoyages, Opodo, Travellink. And one

eDreams Odigeo is in the lackluster growth category, with 3.2% revenue

eDreams Odigeo provides another breakdown of revenues that shows an

commissions…) still directly depends on the company’s ability to continue

Marketing effectiveness ratio (marketing expenses / revenues) in calendar

A look at transactions and gross bookings by country and also by currency

Source: Despegar.com 2018 results

Mobile transactions were up 34% in 2018, accounting to 36% of total

2.6. Lastminute Group

Lastminute Group revenue breakdown. Source: 2018 annual report

Lastminute Group, Dynamic Package revenues. Source: 2018 annual report

Lastminute’s core business EBITDA grew by 60% in 2018, driven by a

The integration of Weg.de, the german package holidays OTA acquired by

As we saw in section 1.2, Lastminute is now part of the travel companies

MakeMyTrip Revenue by Product. Source: MakeMyTrip 3rd scal Quarter results

MakeMyTrip also reports “adjusted revenues”, which represents IFRS

2.8. On The Beach

On The Beach is a UK online retailer specialized in short haul beach

Source: On The Beach 2018 Report

After significant growth of 51% in the first half of 2018, International

that both the intended conversion to a metasearch and direct booking

TripAdvisor continues to invest in its experiences business. On April 2018,

Trivago Quali ed Referrals. Source: Trivago 2018 Annual Report

On the marketing front, Trivago reduced its advertising spend by €152

Trivago remains at a different category vs. its metasearch peer TripAdvisor

Sign up for my newsletter

I agree to leave Medium.com and submit this information, which will be

for EBITDA field is Adjusted EBITDA.