Stepping out of a string of seemingly endless lockdowns into a COVID endemic world hasn’t deterred Aussies from jumping straight back into life as normal. With the holiday period looming people are keen as mustard to get the hell out of dodge and plonk themselves on a beach somewhere for some much needed R&R.
Qantas recently released a roadmap (aren’t we all sick of that word) to return to international travel which had every hodophile beaming from ear to ear. However, the majority of Australians are likely to ‘holiday at home’, travelling domestically instead of embarking on long haul flights overseas.
Two accommodation based companies are capitalising on investor interest in travel and tourism stocks with debuts on the ASX.
Debuting on the 29th of November is Alloggio (Italian for ‘accomodation’), a company that provides short term accommodation through their portfolio of over 879 properties and 13 hotels, predominantly located in key tourism destinations along the east coast.
The Company is seeking to raise $16.5 million, giving them a market capitalisation of $40.1 million. Likened to AirBnB, Alloggio has developed their own cloud based platform for property management, booking and dynamic pricing.
Future growth for the Company is pinned on further development of their platform’s capability, growing their holiday property management rights portfolio via acquisition and organically as well as continued investment in marketing activities to boost brand awareness and market share.
The total addressable market for Alloggio in Australia across all current revenue streams is estimated to be $7.3 billion per year. In FY21, Alloggio generated $11.3 million in revenue and an EBITDA of $4.7 million, representing an increase of 51% and 70% respectively on FY20 despite lockdowns and travel restrictions.
Australia’s rapidly evolving short term rental market is becoming increasingly competitive with AirBnB holding an estimated 73% of the total market share alongside Expedia Group (39%) and Booking.com (21%). That being said, the attractiveness of Australia as a holiday destination, uptick in digitisation of bookings and research as well as vaccine rollouts and reopening of borders mean that there is plenty of room for travel stocks, especially one that consolidates the fragmented base of short term rental hosts and owners with a professional management and integrated services model.
Servicing the hotel management sector directly is SiteMinder (ASX: SDR), a leading open hotel commerce platform. The Company commenced trading on the ASX on November 8th following an oversubscribed IPO of $627 million. Their market cap sits at a hefty $1.36 billion. Their revenue also remained largely unharmed through the pandemic, with a total annual revenue of $101 million achieved in FY21.
Established in Australia in 2006, SiteMinder has pioneered the opening of hotel access to online commerce with over 32,000 hotels, across 150 countries using their platform to sell, market, manage and grow their businesses. Their platform enables hotels to integrate all their software needs into one with an online booking engine, hotel website design tool, access to business insights and payment processing, to name a few.
The global company has offices worldwide and has helped generate over USD $35 billion in hotel revenue over the last year.
With the digitisation of almost every service and industry accelerated by the pandemic, these two stocks are set to go head-to-head upon their ASX debuts, vying for market share in the multi billion dollar travel industry and investors.
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