Our Dtravel Thesis

Publish Date: Feb 3, 2025

Executive Summary

Dtravel is a web3 travel platform that powers direct booking sites for 9,500 operators and is processing annualized $1M of GMV. Dtravel has listings in 117 countries and 1,000+ cities. Since launching in July 2022, travelers have stayed 7,500+ nights, averaging $130 per night with 7 nights per stay. The team is composed of experienced industry professionals. CEO Cynthia Huang founded Airhost Forum, the largest community of Airbnb hosts, while other team members and advisors bring experience from leading travel and hospitality companies, including Expedia, Booking.com, Airbnb, VNTrip, Wheelhouse, and Interhome.
Dtravel is levered to the ecommerce megatrend of going direct to the customer and the rise of alternative accommodations. Much like Shopify, which empowered smaller merchants to create their own website and shifted power away from marketplaces like Amazon, Dtravel is empowering smaller operators to go direct to their end customers. Within travel, intermediaries have historically extracted extremely high fees. Online travel agencies (OTAs) charge independent operators 20-25%+ and marketplaces like Airbnb charge 15%. OTAs spend 40-45% of their revenue on advertising, which is the highest in ecommerce. Over the last few years, large hotel operators have invested heavily in direct and have been able to grow this channel back to 70% of their overall bookings. Dtravel enables smaller merchants to do the same, charging only a 3% take rate and giving the control, flexibility and ownership of the customer.
Dtravel is in hypergrowth mode, with bookings up 4x y/y and listings up 3x y/y. The team ships quickly and has had several key product launches. Dtravel Search is a demand side platform that allows travelers to discover both Dtravel and non-Dtravel powered direct inventory. This massively expands inventory, while over time driving incremental traffic and the ability to increase take rate. In addition, they are rebuilding the review experience from the ground up and are in beta for an AI product which will create an end-to-end travel experience, from discovery to planning to booking.
Dtravel’s ultimate vision is to build an underlying open, permissionless data marketplace, which any business can access. Today, the travel landscape is increasingly fragmented, with walled gardens among the value stack and unstandardized data, which has limited the ability to create a fully end-to-end travel experience. Dtravel Direct and Dtravel Search are the first two first party products that will onboard data to this data layer. Over time, other businesses can both contribute and use this data, which will create data revenue stream for Dtravel. As AI is poised to disrupt the existing market structure, access to data will increasingly become more and more valuable.
We believe Dtravel GMV can increase from $1M to $500M (5bps of the market). At a 5% take rate, this translates to $25M of net revenue and applying a 20x multiple yields a $500M market cap protocol, which is 15x outcome.

Market Overview

The global travel lodging market is estimated to be $800B annually, growing mid-single digits per year.

Hotels represent 70% of this market and grows low-to-mid single digit, with about 40% of the bookings occurring online. With price transparency and good UX, online travel agencies (OTAs) gained share from 17% in 2000 to 51% by 2019. OTAs such as Booking and Expedia have take rates of 10-12% for large hotel chains, with independents paying 20-25%+.

During the pandemic, many hotel operators were frustrated by the top-down decisions and policies of OTAs regarding refunds, even if the hotel operator had already spoken to the customer about credits and other incentives. Having realized the importance of owning the customer relationship and to differentiate their product, the large hotel chains have been focused on driving more traffic directly through their own platforms, through loyalty programs and other incentives. As a result, loyalty membership has increased by double digit CAGR over the last few years, with members comprising of 50-60% of all stays. With an investment and focus on direct bookings, large chains like Hilton, Marriott and Hyatt have managed to shift 70-75% of their bookings to direct bookings.

Alternative accommodations (excluding hotels) represent 30% of the market and grows low double digit, with 80% ecommerce penetration. Vacation rental platforms (Airbnb, Vrbo and Vacasa) aggregate a longer tail of small independent suppliers. Since 2015, vacation rental share has grown from 10% to 30% of total consumer lodging market, growing at 200-300bps per year. Alternative accommodations have benefited from greater work flexibility and the desire to find lodging that can incorporate space for home offices and childcare. Supply has also continued to grow with more education and the rise of the gig economy. Airbnb is more focused on single property hosts versus other players focus more on professional hosts.

Just as hotels transitioned to direct, alternative accommodations are turning to the direct channel as well.

The value of a reservation is significantly greater (10-200% more) when booked direct than through a 3P.

In addition, the length of stay is higher for direct bookings as customers are looking to save more absolute dollars with larger bookings. Longer stays benefit the operator for higher occupancy and less expenses (check in, clean up, etc.)

To give a sense of scale, Airbnb (ABNB) is a $70B public company with 5M hosts and 7.7M active listings on its platform. In 2023, ABNB processed 450M nights, with gross bookings of $73B, growing 16% year on year. ABNB has a 13.5% take rate, generating $10B of revenue and $3.7B of EBITDA.

Dtravel Overview

Dtravel is a web3 platform for vacation rentals. Cynthia was an early Airbnb host in 2014. Given there was limited resources for hosts at the time, she created Airhost Forum for hosts to help one another and share their experiences. It remains the largest community of Airbnb hosts with 50K+ MAUs.

Dtravel was born out of CEO Cynthia Huang’s frustration with Airbnb. Just as large hotel operators have shifted to direct bookings because of high take rates, no control over policies and ownership of the customer relationship, Dtravel is enabling smaller vacation rental operators to do the same. The parallel is very similar to Shopify, which allowed small merchants to build direct ecommerce presence that used to be only accessible to the largest merchants.

Shopify Case Study

Before Shopify, small merchants had to depend on selling their goods on marketplaces like Amazon, which frequently took 20-40% of the GMV. They also didn’t have direct relationship with the end customer and could not build loyalty or differentiate themselves on these third party platforms. Large retailers and brands had entire divisions dedicated to building out their own direct ecommerce platforms. Shopify returned power back to the small merchant, by allowing them to easily spin up a storefront and arming them with value added services across marketing, payments, shipping and loyalty, which had been only available to large retailers. With COVID highlighting the importance of ecommerce as a channel, this became a major investment focus for all merchants.

Over time, Shopify began to help drive demand to its merchants with its Shop mobile app. Every customer of a Shopify merchant would automatically be signed up to Shopify Pay for convenient checkout across its merchant base. They were also enrolled into the Shopify loyalty program and earned cashback and other incentives. Customers also began to use Shop app to manage and track the status of their shipments from Shopify merchants. Once they had engaged the end customer, Shopify created a curated set of personalized Shopify merchants that users could discover and follow. Armed with the data across their entire merchant base, Shopify is able to leverage the wealth of data to better understand shopping patterns and preferences to give the best recommendations across its customer base.

As a result of enabling ecommerce for small merchants, Shopify has grown to become a $100B company with 2M+ merchants on its platform.

Like Shopify, Dtravel Direct enables smaller vacation rental operators to create a direct booking website in under 5 minutes. As mentioned, this historically has been reserved only for the large, branded chains which have been able to grow direct to 70-75% of bookings.

Dtravel Direct is back-end infrastructure that powers direct booking sites. It can be used to 1) create a direct booking website, 2) power an existing website, or 3) form direct booking communities. Dtravel has flexible payment options across card, mobile, crypto, BNPL and localized payment types.

Dtravel shifts power back to the smaller operators and has several key advantages over the larger platforms:

Take rate. Airbnb charges fees of 12.5% and OTAs charge 20-25%+ for smaller operators. Dtravel charges just 3%. Just as Amazon charged 20-40%, Shopify had a 2-3% take rate as well.
Flexibility & control. Much like the large OTAs, Airbnb forced refunds to all guests during COVID, even if the host had negotiated incentives or credits directly with guests. This led to a class action lawsuit, with many hosts going bankrupt. Dtravel gives hosts control and flexibility to set their own terms and policies across check ins, rules, reservation requests and payments.
Brand & customer relationship. Having a direct website allows the operator to build a relationship with their guest. As large hotel operators realized, loyalty programs account for 50-60% of stays and brand drives more repeat visits, by offering targeted special promotions and discounts. Having a Direct Booking website also allows you to upsell additional services or unique experiences during booking or pre-check in, which can add 10-30% to bookings. Properties that become most successful on Airbnb are the ones that have specific branded names.
Other Pain Points. Having operated as an Airbnb host for over a decade and co-founding the largest Airbnb host forum, Cynthia understands the specific pain points of being an Airbnb host. For example, even after customer pays a non-refundable booking, the funds are held in escrow by Airbnb until guest check-in. Airbnb sits on $10B of escrowed funds, which generates hundreds of millions of dollars in interest that is kept by Airbnb. The host, on the other hand, struggles with working capital needs, with upfront capital requirement. Dtravel smart contract remits payment to the host immediately, after deducting the 3% fee.
Ownership. Airbnb recognizes that importance of hosts on its platform and did several things that were unique in a traditional IPO. First, Airbnb sold 3.5M shares (7% of sold and 0.6% of the total) to hosts pre-IPO. However, these were only allocated to an estimated 0.4% of the hosts. In addition, they set aside of 9.2M (1.5% of the total) of the shares for the host endowment fund, which funds programs for hosts (grants, new products, emergency funds). Dtravel takes this a step further, by allocating 25% to the community growth fund and having given 0.25% of the growth fund in fee rebates to hosts.

Supply Side

Dtravel Direct launched in July 2022 and has onboarded 9.5K hosts, growing 3.4x year over year. Total active listings have increased 3x to 4.1K listings. Today, Dtravel has listings in 1000+ cities in 117 countries.

Source: Dtravel Website. User experience for booking direct with hosts

Dtravel is focused on onboarding commercial operators, who have multiple listings. Head of Supply Growth Eric Pace, formerly of Expedia, leads these efforts.

Dtravel has integrated with numerous software providers to make it easier for operators to create Dtravel Direct listings

Airbnb Sync: Allows Airbnb hosts to create a free direct booking site and import all their listings within seconds.
Property Management Systems (Hostaway, Uplisting, Weave): Allows property managers to easily push their listings into Dtravel Search from their existing management systems
Google Vacation Rentals: Had previously been hard for smaller commercial operators to access as it was gated by expensive subscriptions and complex direct integrations. Dtravel completed a direct integration with Google Vacation Rentals late last year, which allows all of its operators to push their listings onto Google’s platform

We believe Dtravel can also offer a host of additional value-added services for its operators that were only accessible to large hotel chains.

As mentioned before, 50-60% of bookings for large hotel operators are from loyalty members. Just as Blackbird is creating a shared loyalty among a collection of independent restaurants, Dtravel will also be able to provide an individual and collective loyalty programs across its operator base.

In addition, large hotel operators have had access to yield management tools to monetize pricing, which has driven and uplift in average room pricing. Dtravel will be able to offer pricing optimization for its operator base, especially given Head of Product Quinn Hubertz’s experience at Wheelhouse/Lyric, the leading revenue management system for Airbnb hosts.

Demand Side

On the demand side, Dtravel has scaled its annualized bookings to $1M, up 4x year over year. To date, the company has processed $1M in bookings across 7.7K room nights. The average booking is 7 nights for $865, which implies ~$130 per night (Airbnb is ~$166)

Airbnb spends 2.1% of bookings & 18% of net revenue on marketing and Booking spends 6% of bookings & 45% of net revenue on marketing. The OTAs have one of the highest spend as percentage of revenue in internet, with most of the spend going to search engines. Impressively, Dtravel has spent zero to date on marketing for demand side as operators bring their own traffic to their site.

Just as Shopify has created a discovery platform within Shop App, Dtravel has recently launched Dtravel Search, a consumer-facing platform designed to drive more demand and traffic to its operators. Inventory does not only include Dtravel inventory from Dtravel Direct but also allows hosts to easily connect their existing direct booking pages by using Dtravel Connect. As a result of driving traffic to non-Dtravel Direct sites, Dtravel also charges a 3% fee. Importantly, this inventory does not include OTA inventory (which costs 20-25% for smaller operators) but only direct booking sites.

If Dtravel is able to successful drive additional demand to its merchants, Dtravel would likely be able to expand its take rate from the 3% it charges today (given independent operators pay OTAs 20-25%+ to drive bookings to them)

Dtravel Search is also building a next-gen travel review system, with an incentive to travelers to provide feedback that is constructive and true. In addition, Dtravel is building out trip management features, which will streamline the experience for travelers. Lastly, Sensei, Dtravel AI product, is being rolled out which will assist travelers in creating personalized end to end trips.

Data Layer

Today's travel experience is highly fragmented across discovery, planning, and booking. All of the platforms (OTA and hotels & airlines) have walled gardens regarding their data. In addition to the lack of access, there is lack of standardization across the different providers, which limits interoperability and makes it impossible to create a personalized, end to end travel experience. For example, every host and guest must rebuild its reviews and reputation on each individual website.

Dtravel’s Nite Protocol serves as a data layer, aggregating operators' and consumers' histories across various platforms."

This will allow platforms to tap into Dtravel’s data to deliver personalized recommendations, assist with trip planning and automatically book reservations.

Third-party applications can access the Nite Protocol API with a fee to query and distribute property data. The amount paid by third-party applications is based on the amount of properties queried and the source of properties queried. Operators can put a price on accessing the listings they manage, which creates a data marketplace.

Dtravel Direct and Dtravel Discover are the first two applications that will be used to on-ramp data to the Nite Protocol. Over time, other applications will be built on Nite Protocol.

Just as AI has allowed Perplexity to challenge Google, AI enables new players to emerge to challenge the current incumbents. From personalized discovery, trip planning and automated booking, AI will shorten the entire booking process, while reducing friction and increasing conversion. Uniquely, given every listing has a smart contract enabled, this will allow agents to book travel for you on-chain. Dtravel will own the data layer, which will power not only their 1P protocols but other protocols and companies that build on top.

Tokenomics

The primary value driver for TRVL will be value accrual from the take rate (currently 3%) on bookings. Over time, revenue will also be generated from the data layer as well through data querying, marketplace fee and as a gas token.

When the protocol reached ~$7M of annualized bookings, the take rate will be used to buy and burn the token. Importantly, there is a strong focus from the team in making any rewards be sustainable (e.g. equal to the take rate)

Separate from TRVL, each Dtravel property will have its own smart contract, embedded with its metadata. With each booking, a Nite Token (NFT) is issued, which represents booking nights that operators can monetize. These could include royalties for trading Nite tokens, borrow & lend, easily buying and selling other people’s reservations (either in high demand or a nonrefundable reservation that is not needed anymore) or selling rights to future cash flows.

In August 2024, Dtravel launched the Rewards Program, which is funded with 150M TRVL (15% of the supply) that rewards value added behavior. Notably, it is a points program with multiple seasons, whereby Dtravel can calculate the value of certain actions and award the correct % of supply. For Season 1, on the supply side, rewards are granted for listings and referrals in new and high demand cities. On the demand side, rewards are given for completed stays and referrals, based on a leaderboard. There are also rewards for other social media activities.

Dtravel sold about 20% of the protocol for $7M at an average of $35M FDMV. The protocol has a very clean cap table, with all of the venture investors fully vested as of December 2023. In addition, the protocol is very well capitalized, with ~55% of the token supply still controlled by the protocol. The team is very thoughtful about token emissions and building a sustainable, durable protocol based on organic demand side revenue. Dtravel raised a new funding rounds in 2024 with Borderless, Modular and Escape Velocity to accelerate growth .

Dtravel was first incubated by Travala, which is an OTA that accepts crypto payments. Travala’s CEO Juan Otero worked at Booking.com before founding Restaurantes.com, an European OpenTable competitor which he sold to Michelin. Travala is doing $100M of annualized GMV, with 3M listings and 200K MAUs, with 70% of users paying with cryptocurrencies. Dtravel is integrated into Travala’s website.

Competitive Landscape

Within the travel landscape, there are a few key players:

Search Engines: top of the discovery funnel. OTA’s spend 40-60% of their revenue on paid advertising and travel is one of Google’s largest drivers for search engine revenue
OTA: charges a 15% take rate, 10% for larger brands and 20-25% for smaller independents. Has grown to 50% of the online travel industry due to good user experience
Airbnb: charges a 13% take rate. Aggregates fragmented long tail supply

Direct Booking Options:

Logify: Dtravel’s closest competitor, allowing operators to create direct booking storefronts. They charge monthly subscription plans and have recently raised a $30M Series B funding round. Whereas 25% of Logiy’s traffic is dependent on paid advertising, impressively, Dtravel has already scaled to 10% of Logify’s unique visitors with zero paid advertising
Property Management Systems (Hostaway, Guestly, Hospitable): easy to do add direct sites, but product is not good. They are focused on being booking engines, but are not able to create fast, responsive and Google friendly websites. Dtravel has built easy integrations to allow websites to be built off of property management systems
DIY: most operators try to build their own direct booking website through Wordpress but requires technical team to build and maintain. Consultants like BNBpro charge thousands of dollars. This was very similar to Shopify early days where DIY was the biggest competition
Generalized website builders (e.g. WIX): Not focused on vacation rentals and cannot provide the verticalized solution & integrations

Impressively, most of Dtravel’s traffic is organic.

Team

Cynthia Huang (CEO). Founded Airhosts forum in 2014, which grew to the largest Airbnb host community. Also founded Altcoin Fantasy, a crypto trading simulator platform that grew to 200K users. Also was head of Product Marketing and New Markets for GrowFlow, a B2B vertical SaaS platform.
Drew Currah (CFO). Formerly Founder of Hexa-Digital, a web3 incubator. Was founder of TradePros, an online marketplace for home improvement services, which had a successful exit.
Thai Ngyugen (CTO). Formerly co-founder and CTO of VNTRIP, the leading OTA in Vietnam, which raised from Ctrip’s co-founder, Alibaba’s CTO, etc.
Bruno Paleo (Protocol Engineering). Formerly Director of Engineering for Cardano. Holds a PhD in theoretical computer science from Vienna University of Technology.
Quinn Jinertz (Head of Product). Formerly Lead Product manager of Wheelhouse, pricing software for Airbnb hosts. Wheelhouse was backed by venture firms such as NEA, Highgate, Tishman Speyer, Signalfire, etc.
James Soulodre (Head of Marketing). Formerly managed partnership marketing campaigns for globally recognized brands like adidas, ASICS and Polartec.
Eric Pace (Supply Growth). Formerly operations at Expedia

Advisors include:

Sicco Behrens: Co-founder of Booking.com
Simon Lehmann: Formerly co-founder of Vacasa Europe, ex-Board member of HomeAway (sold to). Formerly CEO of Interhome, Hotelplan Group, and Swissport
Peter Andruskiewicz: Currently VP of Partnerships & Strategy at Breezeway, a property management solution. Formerly Airbnb North America Strategic Partnerships
Others include Andre Cronje (FTM), Sebastien Borget (SAND) & others

Newstart is the non-technical contributing team to Dtravel. The team is made up of travel and short term rental professionals and operators, digital nomads, crypto travelers, blockchain experts and web3 natives. They are responsible for product, design, operations, growth, customer support, etc.

Blocktech Labs is the technical team contributing to Dtravel, responsible for development of product.

Over time there will be multiple teams contributing to Dtravel. Dtravel has been accepted into the thirdweb and Optimism’s Superchain App Accelerator.

Valuation & Scenario Analysis

Below, we present a few scenarios and illustrative assumptions for Dtravel’s key drivers.

Base Case:

TAM: We assume Dtravel gets to 0.05% of the global lodging TAM of $800B or 20bps of the alternative accommodation TAM of $240B, which translates to $500M of GSV. For context, SHOP has penetrated 3.7% of the global ecommerce TAM of $6.3T.
Take Rate: We believe Dtravel has further upside to take rate, with ABNB priced at 15% take rate and Booking charging independent operators 20-25%+. We assume take rate can increase from 3% to 5%. This results in $25M of net revenue and at a 20x multiple would be a $500M outcome

Upside Case:

Our upside case uses the same framework as our base case. We assume increased penetration from 5bps to 13bps in the core business, marginal penetration in other TAMs.
We assume take rate increase from continued penetration of Dtravel search, pricing optimization and other drivers.
There continues to be call options on the data layer, AI product and review platform; as well as the expansion into experiences and other parts of the booking experience, which is not include in this analysis.

Dislcaimer: all forecasts and assumptions are hypothetical

Risks & Mitigants

Fundamentals decoupled from crypto. Given fundamentals are decoupled from crypto, Dtravel is less exposed to crypto beta and more dependent on execution.
Recession risk. In the event of a major recession, this would hurt Dtravel’s business and fundamentals. However, given Dtravel is still in hypergrowth phase and moving to Dtravel helps save operators money, we believe Dtravel can continue to grow

Special thanks to Cynthia Huang (Founder, Dtravel) and Salvador Gala (Escape Velocity)and for their review and input.

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