Travelucion Media Investment Overview
Travelucion Media, a wholly owned subsidiary of Cuba Ventures Corp. (TSX-V: CUV), is a cash flow positive online travel and digital media marketing company that specializes in travel marketing, electronic reservations and online booking solutions for international visitors to Cuba. Travelucion Media has developed and owns one of the most significant portfolios of Cuban focused web assets with 432 websites collectively generating over 30 million page-views per year, directing traffic to the main booking and e-commerce sites. Since 1995 these proprietary websites have been promoting Cuba and offering online travel services to the Caribbean nation. The websites cover all facets of the island including specific tourist destinations, hotels and resorts, golf, spas, restaurants, classic car rentals, Cuban culture, health, commerce, food and much more.
Travelucion Media was formed in 2011 in the Canary Islands of Spain and is a certified European Travel Supplier. However, the roots of the company go back over 20 years ago when the founder and President of Travelucion Media, Steve Marshall, engaged the Cuban Minister of Tourism to develop a web presence that would promote tourism to Cuba. This was during a time when the Cuban government was desperate to develop a tourism industry for much needed revenue. With an agreement in place, it was the desire of Mr. Marshall to break into the relatively non-existent online marketing and digital media sector in Cuba. This evolved into Travelucion's 432 domains and multilingual Cuba centric websites which generate over 30 million page views a year and have been developed to corner niche segments relating to almost every conceivable facet and location in Cuba. The intention being to own a proprietary network of web assets which operate in unison to channel visitors toward the company’s e-commerce booking sites. Travelucion Media has also developed a strong social media platform consisting of passionate Cuba social media followers across Facebook, Twitter, Pinterest and Instagram.
Travelucion Media has evolved into a dominant force in the travel sector to Cuba with a strong customer base in Europe and South America with a goal of breaking further into the North American market. Its predecessor company moved its Information Technology (IT) headquarters from Havana to Tenerife on the Canary Islands, Spain in 2006 where eventually in 2011 Travelucion Media was established to own all the web assets and propriety systems now operating the websites and e-commerce sites. 3rd parties moved the company into the e-commerce space and specifically the building of online booking platforms that are fed traffic from the websites. This includes bookings for hotels, private residences, car rentals, tours, and a variety of other types of bookings as well. Through legacy agreements with Cuba's largest travel companies, Travelucion's emblematic e-commerce brands like Havanatur.com provide the company with access to a broader and more diverse portfolio of Cuban travel and tourism packages than any other travel provider. The company also has close relations with a Havana based Cuban wholesale travel agency with an office providing representative and logistical onsite staff in Cuba to cater to client arrivals and personalized on-the-ground services, including high level VIP services. The company’s booking model is one where a customer can go online and build, with a shopping cart, their own unique vacation to truly experience Cuba. Over the years, Travelucion Media has serviced hundreds of thousands of customers booking travel to Cuba.
Travelucion Media generates its revenue through direct on-line sales through the e-commerce sites owned and operated by the company. All foreign travel agencies operating in Cuba must obtain an operating license to access a state-run agency and supplier of rooms and services, which are in order of size and sales volume: Havanatur, CubaTUR, Gaviota Tour, Cubanacan, Ecotur. Travelucion Media is in a unique position due to its long operating history in Cuba to be able to provide Cuban travel bookings through these locally operated suppliers in particular Havanatur, CubaTUR and Gaviota Tour. Travelucion’s proprietary online booking systems have been developed to poll prices from each agency to determine the lowest price and best travel options for customers. This is a competitive advantage unique to Travelucion Media and provides the company’s customers the ability to indulge in high end hotel and spa accommodations or create uniquely Cuban travel packages with exclusive private home rentals, antique car services and access to a multitude of guided or self-discovery tours across Cuba in addition to basic hotel and car rental bookings.
2015 was a transformation year for Travelucion Media largely due to the notable change in U.S. government policy toward Cuba and the company’s revenue growth since Obama gave his historic speech in December 2014 was over 150% through the end of 2015. This represents a large interest from the rest of the world who want to go to Cuba before the embargo is potentially lifted as well as an elevated interest from the American travelers which is expected to continue to grow. The increasing U.S. interest in Cuba can be seen by the increase in the number of visits to Travelucion’s websites which generate over 30 million page-views a year. Before December of 2014, only 11% of visitors to the Cuba centric websites were American but this shot up to over 33% of visitors after Obama’s announcement. However, given the general U.S. tourist ban still in place, this online American traffic represents only 6% of the company’s online booking sales as the conversion rate on American traffic is still quite low compared to other countries. The company sees this latent demand as excellent growth potential without any additional marketing initiatives and is set up to handle the travel requirements of qualified U.S. travelers to Cuba.
Travelucion Media also has a strong presence in the rapidly growing specialty and adventure travel sectors. The company’s predecessor was originally built around this type of business model catering to large groups of American travelers in the early 2000’s. In addition to hotel and car rental bookings, Travelucion Media offers a wide array of products including historic car rentals, private residences and B&B bookings, specialty tours pre-qualifying Americans to travel to Cuba, ecotourism, and health tourism to name a few. In particular, Travelucion Media will continue to build on its 4,000 private home (Casa Particulares) rental listings database using a model similar to that of Airbnb and HomeAway. The company is focused on developing its business to cater to the traveler who wants the freedom to buy this type of customized experience.
Travelucion Media has recently signed an exclusive contract to market Cuban medical treatments across its 432 Cuban related websites. The value of the global medical tourism market by 2019 is estimated to be US $32.5 billion, and with rising healthcare costs and wait times in developed countries, Cuba is perfectly situated to become a key destination for this as it has one of the best healthcare systems in the world. As per the contract, Travelucion Media will keep a 10% commission on all medical procedures and treatments booked through its websites. This includes 252 medical procedures and treatments which will be offered through the websites, all of which are ISO 9001 compliant. They range from minor treatments and procedures to cosmetic and plastic surgery to major surgeries and cancer treatments.