Last Update07 Aug 25Fair value Decreased 10%
TibiT has decreased future PE multiple from 22.0x to 15.0x, decreased shares outstanding growth rate from 0.0% to -0.0% and increased timeframe from 3 years to 5 years.
As of 2024, On The Beach (OTB) holds an estimated market share of approximately 3.5% of the UK's online travel agency (OTA) market. This figure is based on the company's reported Total Transaction Value (TTV) of £1.2 billion for the fiscal year 2024 and the broader UK online travel market size of approximately £34 billion (converted from USD 42.6 billion).
It is important to note that a precise, universally agreed-upon market share figure is difficult to ascertain due to the varied ways the travel market is segmented. However, by focusing on the online travel segment where On The Beach primarily operates, this calculation provides a strong indication of their position within the industry.
Expected Increase in Market Share
There is a strong expectation, supported by company strategy and analyst outlook, that On The Beach's market share is poised to increase in the coming years. This is driven by several key factors:
Strategic Growth Initiatives: On The Beach has a clear strategy for capturing a larger slice of the market. This includes:
- Expansion into New Markets: The company has recently expanded its offerings to include city breaks and has entered the Irish market, significantly increasing its total addressable market.
- Focus on Premium and Long-Haul Holidays: OTB is actively working to attract customers in the higher-margin premium and long-haul holiday segments. This not only grows revenue but also diversifies their customer base.
- Partnership with Ryanair: A significant recent development is the strategic partnership with Ryanair. This agreement provides OTB with direct access to Ryanair's flight inventory, enhancing their operational efficiency and offering more competitive pricing and choice to customers.
Strong Financial Performance and Positive Outlook: On The Beach has demonstrated robust growth, with a 15% increase in their Total Transaction Value in fiscal year 2024. The company has publicly stated a medium-term ambition to more than double its TTV to £2.5 billion, which would inherently lead to a significant increase in market share.
Favorable Market Conditions: The demand for package holidays remains strong in the UK, with a significant majority of travelers opting for this type of vacation. On The Beach's online-focused, asset-light business model allows them to be agile and competitive in this environment.
Analyst Confidence: Market analysts have generally expressed a positive outlook on On The Beach's future performance, with many reiterating "buy" ratings and citing the company's growth potential and strategic initiatives as key strengths.
In conclusion, while On The Beach currently holds a modest but significant share of the UK online travel market, their proactive growth strategies, strong financial performance, and favorable market positioning strongly suggest that their market share is likely to increase in the foreseeable future.
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Disclaimer
The user TibiT has a position in LSE:OTB. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
