BUDH getting some print:
STOCKSTREETUSA - stockstreetusa.com
STOCK FLASH!! (BUDH) 23 X 24
Budethotels.com Inc. (OTCBB: BUDH)
The web site currently features over 1,200 hotels and motels
unique to BudgetHotels.com and an additional 20,000 properties through
various affiliated partners. The traffic to the Company?s Web site has
been steadily increasing and reached 76,000 unique visitors in August of
2000. Given the growth in the online travel industry, the Company
believes that in addition to upgrading its existing software and
hardware, with the implementation of an aggressive sales and marketing
campaign, the Company can increase the number of unique visitors per
month to over 470,000 within one year, thereby significantly increasing
the revenue potential from the Web sites and the profitability of the
Company.
Recent Price: $0.15
52-Week Range: $0.01-$0.53
Daily Volume (3-month average): 36,000
Daily Volume (10-day average): 54,000
Shares Outstanding: 13.2 million
Public Float: 5 million
Market Cap: $2 million
Last 9-Months Revenues: $596,986
Last 9-Months Net Income: $80,969
Projected Revenues (2001): $2.075 million
Projected EPS (2001): $0.05
Projected Revenues (2002): $4.426 million
Projected EPS (2002): $0.20
Projected Revenues (2003): $6.787 million
Projected EPS (2003): $0.35
Company Website: budgethotels.com
<http://www.budgethotels.com/>
Contact Information:
Bill Marshall, CEO
Tel: 1-800-548-4432
E-mail: wmarshal@budgethotels.com <mailto:wmarshal@budgethotels.com>
Budgethotels.com, Inc. is becoming a leader in providing innovative
Internet hotel reservations and its Info Center division is rapidly
expanding its advertising board locations for services for budget
travelers. There are currently 73 Info Center Boards across the U.S.A
and Canada. Budget travel is by far the largest segment of the rapidly
growing travel industry with expenditures of over 750 billion. The
Company?s original Web site, as previously discussed, was launched in
March of 1996 and since that time has developed seven additional Web
sites. A summary of the existing Web sites are as follows:
www.budgethotels.com, www.new-york-motels.com, www.san-diego-motels.com,
www.miami-lodging.com, www.seattle-lodging.com, www.chicago-motels.com,
www.cheap-motels.com, www.cheap-lodging.com.
The Company is presently using a manual reservation system for its own
unique properties primarily the various listed hotels/motels that
advertise on the Company?s advertising display boards. The visitor to
the Web site phones budgethotels.com from a number indicated from its
Web page and an in-house reservation clerk makes the reservation on
behalf of the consumer and invoices the hotel for its commission of
usually 10%. The Company has also developed partnerships with budget
motel and hotel providers across North America and Europe which have an
approximate inventory of over 20,000 listed properties. To date the
Company has affiliations with the following: Hotelquest, HRN, 1Travel
(car & airline), World res and is in negotiations with Pegasus Systems
Inc.
INVESTMENT SUMMARY
- Budethotels.com Inc. has positioned itself for rapid growth in the
coming three years. 2000 has been a pivotal year for BUDH. The company
becomes profitable by increasing its sales over 32% in the first 9
months of fiscal year of 2000 over the same period of 1999. The
company's potential for growth is more evident and could prove
significant with the major expanding of its web presence and new
marketing plan. The number of online travelers has grown 190% from 29
million in 1996 to 85 million in1999, according to a report by the
Travel Industry Association of America (TIA). The report, "Travelers?
Use of the Internet," also found the correlation between the online
population and travel is so strong that almost all Internet users are
also travelers, with 93% of Internet users (91 million US adults)
responding that they took at least one trip of 100 miles or more,
on-way, away from home in 1999. More than 52 million online travelers
used the Internet for this purpose in 1999, an increase of 54% from
1998. Internet travel planning has increased a remarkable 1,500 % since
1996, the report found. Online bookings have increased as well, with 32%
of online travel planners making reservations online. This translates to
16.5 million online travelers, an increase of 146% from 1998. Nearly
half (8.2 million are frequent travelers, making five or more trips
during the past year. Most travelers are satisfied with their online
travel experience, with nearly one-half (45%) saying they would use the
Internet more next year for travel planning or reservations, according
to the report.
- While 52.2 million online travelers use the Internet to plan travel,
only 16.5 million (32%) actually make travel reservations online,
according to TIA?s report. Online travel reservations include actually
booking or paying for an airline ticket, hotel room, rental car, or
package tours. This is up from 6.7 million in 1998 and 5.4 million in
1997, representing a 206% increase over a two-year period. While many
travelers use the Internet to plan their trip, most are still hesitant
to purchase their travel products online. In fact, 69% of online
travelers look but don?t book online. This conversion rate is rising,
however. It now stands at 31%, up from almost 20% in 1998, according to
TIA. The top reasons for not booking travel online are security and
customer service.
- According to Bear Stearns, which sponsored a panel discussion on
Internet travel at the American Gaming, Lodging, and Leisure Summit,
Internet travel sales will approach $30 billion by 2003. Online travel
is already the largest commerce category, but the projection for 2003
will still represent only a fraction of the $3.7 trillion estimated to
be spent on worldwide travel sales "The potential for growth is
staggering," said James Kissane, Bear Stearns? senior managing director
and computer services analyst. "If you can capture even a fraction of
the overall spending numbers, you can do extremely, extremely well." The
battle for supremacy continues in the online travel market, according to
Bear Stearns, and there is no category killer such as an eBay or
Amazon.com Companies that can build consumer recognition and consumer
confidence are likely to do well because customers new to online
commerce look for brands they know. The potential for growth in the
online travel industry is significant. As noted in the previous section,
BUDH owns over 80 domain names related to travel, economy and budget.
Over the long-term BUDH plans to expand its reach as an online
travel/destination portal by developing Web sites in these specific
areas.
- As future revenue from the web sites will be driven largely by
e-commerce and online travel bookings, market data on both are presented
below. Though competition is intense, e-commerce, particularly online
travel, is the fastest growing segment of the IT industry. In addition
to developing new Web sites, the Company plans to begin generating
strategic partnerships with ancillary travel service providers such as
car rental companies, cruise lines, amusement parks, entertainment
venues, tour companies, restaurants, and providers of travel insurance
etc. These partnerships will be similar in nature to the agreements with
hotels/motels. All of the Company?s partners will be able to list on the
Company?s Web site at no cost, in exchange for the Company receiving a
set percentage of the revenue generated by the partner by customers
booking through the Company?s Web site. Management, in tandem with its
efforts on site development that it will increase the length and
frequency of visits to BudgetHotels.com?s site, will expend considerable
time and funds on promoting the site in order to attract new visitors.
Higher usage figures are directly related to higher potential revenues
from advertising, commission income and other revenue streams. Site
promotion efforts will consist of trade show marketing, international
marketing and alliance and publicist marketing.
- Key factors mark BUDH as an outstanding investment opportunity: (1)
huge potential of significant revenue and earnings growth, (2)
capitalization of strong industry growth of online travel booking, (3)
great ability to adopt to changing market, and (e) key management. These
astonishing factors along with the fact that the Company will launch a
new marketing plan lead us to believe in the future success of the
Company in this explosive industry.
- We view BUDH as an excellent growth company with exceptional potential
for capital appreciation over both the short term and the long term. The
marketplace is going to recognize the importance of BUDH technology and
market opportunity. Bearing in mind that significant company
developments will occur in the coming weeks, along with industry
projections, leads us to believe that BUDH is an excellent investment
opportunity. As some major developments are in the works, we believe the
stock could move quickly to $0.50 to $0.60. The peers in the industry
typically trade at a market valuation of 26.7x projected earnings and,
therefore, BUDH appears to trade at a deep discount to its peers in the
industry. Over the next 12 months, we are projecting a target price of
$1-$1.50, 20 to 30x its projected earnings, based on 14 million shares
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