Holiday lets make more than buy-to-lets – how might EIS investors benefit?
Archived article: please remember tax and investment rules and circumstances can change over time. This article reflects our views at the time of publication.
Holiday homes now generate more income for their owners than long-term rentals in the UK. Landlords have been outstripped: over the past decade, holiday-let earnings have grown more than 60% on average, compared with just 5% for buy-to-lets.
But it seems holiday lets could do even better, as it’s currently estimated more than half of holiday nights still go unsold.
One reason is the market is dominated by small-scale (fewer than 10 properties), non-professional owners, often running their lets as a side activity alongside other jobs or whilst retired. Hence, many lack the time or expertise to promote and manage their listings on multiple booking platforms – something that could increase their bookings and earnings severalfold.
This is something tech entrepreneur Doug Stephenson experienced first-hand. Both his parents and grandparents have holiday let businesses. Trying to help them, he realised there wasn’t an easy way for hosts to address the huge problem of unsold dates and ramp up their marketing quickly.
Doug set up traveltech company Travelnest Limited to address this.
A £64 billion global addressable market for Travelnest EIS, currently fundraising
Travelnest has developed an easy-to-use platform for holiday-let owners – giving them global reach with minimal admin, through a single dashboard.
Instead of having to create an account to add a listing to each of the various booking sites – and then going from site to site to manage the multiple listings, calendars and bookings – owners can do it all through Travelnest.
They upload their holiday property, and Travelnest simplifies the rest. It helps them list, price, market and manage their bookings – including communicating with guests and taking payments – across 30+ major travel booking sites such as Booking.com, Expedia, Tripadvisor and Airbnb. The platform also helps owners boost the performance of listings by giving them marketing tips, industry insights, and access to a knowledgeable support team.
The company reports it has to date increased customers’ earnings by up to 4x.
Owners pay a 20% fixed-rate commission of total booking value through channel partners and 5% for direct bookings. There are no subscription fees or set-up costs.
Travelnest estimates there are c.16 million holiday property owners around the world – c.271,000 in the UK, its initial market. Globally, it’s a £64 billion addressable market.
Travelnest is active in 50+ markets worldwide. It has grown rapidly since the platform launched in 2018 and shown resilience through the pandemic. It generated £6.8 million in booked revenue in FY22 – 152% CAGR since FY18.
The company is backed by leading institutions, including Mangrove Capital Partners (an early backer of five unicorns, including Skype) and Scottish National Investment Bank.
Interested in investing under EIS in this traveltech platform, alongside VC backers?
Ahead of a larger planned Series B round in 2025, Travelnest is launching a £5 million bridge round aiming to fund the business to profitability, forecast in 2025 – not guaranteed. Approximately half the fundraising target is being met by existing institutional investors – Wealth Club investors can invest alongside (applications processed on a first-come, first-served basis). The minimum investment is £10,075.20 and you can apply online.
Based on the company’s forecasts, the target return in FY28 for investors in this round is 14.6x (IRR 53%) before EIS tax relief – high risk and not guaranteed.
Important: this is a single-company EIS private offer with no diversification. There is no guarantee the company will be successful: you could lose your money. Before investing, please read carefully all the information to ensure you understand and are comfortable with benefits and risks.
Wealth Club aims to make it easier for experienced investors to find information on – and apply for – investments. You should base your investment decision on the offer documents and ensure you have read and fully understand them before investing. The information on this webpage is a marketing communication. It is not advice or a personal or research recommendation to buy any of the investments mentioned, nor does it include any opinion as to the present or future value or price of these investments. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.
Learn more about Travelnest EIS - the product, management, strategy, forecasts, risks, charges, our view and more.Read more and see how to apply online