certainly can scare away investors who haven't done the work. but there is an boeing 737 amount of nuance here. Also its important to remember edreams and ryanair have had a bad relationship for over a decade. has not made an iota of difference to edreams numbers.
Thanks for your thoughts. I have heard it claimed that eDreams used Booking Holdings white label product. Do you know if this is the case and is there any scenario why this should concern us?
That is false. In flights, EDreams has been the leader for years in Europe. Booking has no internal flight capabilities - they white label etravelii. Booking tried to buy them but regulators said no, which widens EDreams’ moat imo. In hotels, EDreams gives away their booking fees to Prime customers, which allows them underprice Booking. There’s no way Booking would participate in that.
Thank you for these great answers. I like the idea hence my questions.
I have one final question. What is your response to comment 30 here: https://www.valueinvestorsclub.com/idea/eDreams_ODIGEO/7732249010#messages? In short the comments about how significant the savings on flights are and that people do not realise they are signing up for prime. I have answers in part for these comments but would like to get your take particularly on the savings (for eg regarding signing up for prime, it is very clear to me whether you are opting for prime or not so at worst this issue was only an issue in the past and is no longer an issue.)
so I'll say a couple things (but 310 may have access to VIC so can respond better)>
- on the bookings, i do believe edreams uses to use them for hotel products (never flights) but now edreams is really building out their own hotels product (and my last convo with Dana he told me they were getting really good nps scores on their europe hotel business)
- On savings: I think if you're booking just the flight you will save money almost every time. if you add ancillaries the company says they are still cheaper 60-70% of the time. That said apparently people only add ancillaries 30% of the time. However, I do think that eDreams needs to get more competitive on ancillaries and it is a work in progress
- on not realizing singing up for prime... i really don't get this one, its quite clear as you go through the funnel. but the company understands how there could be edge cases where the customer has not realized and if you read through trust pilot reviews there are cases where company has refunded prime even after the 30 days free trial and let the customer keep the discount. second if everyone was 'tricked' there is no way they would have any retention in year 2 and year 3. and ithey didn't have retention in year 2 or 3 you woudn't see the operating leverage kick in like it has . further prime has an NPS score of over 50. the main reason is not price. its actually service.
Not sure if ive answered your questions (sorry not on VIC) but hope it helps. I'm sure 310 has better answers.
I'd add that the Prime savings for flight increases as the flight's price and complexity increases. Cherry picking a short, point-to-point flight that is well serviced by ultra-low-cost carriers is not something that is indicative of the entire market.
With respect to hotels, it is important to remember that for Prime customers, eDreams makes money off its subscription fee. The booking fee is given back to Prime subscribers in the form of discounts. It will be tough to beat pricing in this business model if your business is based on capturing a take rate.
I doubt it. It’s not having much, or any, impact on their numbers. Liquidity is the issue, which they should solve with a series of tender offers.
Thanks for the article. Do you think the Ryanair commentary is another reason it is cheap? Any thoughts on the commentary in their latest earnings call (go here and search edreams and ota and read the relevant 2 sections, https://app.tikr.com/stock/transcript?cid=413817&tid=2644123&e=1878602970&ts=3134871&ref=1ydie7)?
certainly can scare away investors who haven't done the work. but there is an boeing 737 amount of nuance here. Also its important to remember edreams and ryanair have had a bad relationship for over a decade. has not made an iota of difference to edreams numbers.
Thanks for your thoughts. I have heard it claimed that eDreams used Booking Holdings white label product. Do you know if this is the case and is there any scenario why this should concern us?
That is false. In flights, EDreams has been the leader for years in Europe. Booking has no internal flight capabilities - they white label etravelii. Booking tried to buy them but regulators said no, which widens EDreams’ moat imo. In hotels, EDreams gives away their booking fees to Prime customers, which allows them underprice Booking. There’s no way Booking would participate in that.
Thank you for these great answers. I like the idea hence my questions.
I have one final question. What is your response to comment 30 here: https://www.valueinvestorsclub.com/idea/eDreams_ODIGEO/7732249010#messages? In short the comments about how significant the savings on flights are and that people do not realise they are signing up for prime. I have answers in part for these comments but would like to get your take particularly on the savings (for eg regarding signing up for prime, it is very clear to me whether you are opting for prime or not so at worst this issue was only an issue in the past and is no longer an issue.)
so I'll say a couple things (but 310 may have access to VIC so can respond better)>
- on the bookings, i do believe edreams uses to use them for hotel products (never flights) but now edreams is really building out their own hotels product (and my last convo with Dana he told me they were getting really good nps scores on their europe hotel business)
- On savings: I think if you're booking just the flight you will save money almost every time. if you add ancillaries the company says they are still cheaper 60-70% of the time. That said apparently people only add ancillaries 30% of the time. However, I do think that eDreams needs to get more competitive on ancillaries and it is a work in progress
- on not realizing singing up for prime... i really don't get this one, its quite clear as you go through the funnel. but the company understands how there could be edge cases where the customer has not realized and if you read through trust pilot reviews there are cases where company has refunded prime even after the 30 days free trial and let the customer keep the discount. second if everyone was 'tricked' there is no way they would have any retention in year 2 and year 3. and ithey didn't have retention in year 2 or 3 you woudn't see the operating leverage kick in like it has . further prime has an NPS score of over 50. the main reason is not price. its actually service.
Not sure if ive answered your questions (sorry not on VIC) but hope it helps. I'm sure 310 has better answers.
I'd add that the Prime savings for flight increases as the flight's price and complexity increases. Cherry picking a short, point-to-point flight that is well serviced by ultra-low-cost carriers is not something that is indicative of the entire market.
With respect to hotels, it is important to remember that for Prime customers, eDreams makes money off its subscription fee. The booking fee is given back to Prime subscribers in the form of discounts. It will be tough to beat pricing in this business model if your business is based on capturing a take rate.