Auction Booking Engine – Top Price/Performance for Travelers and Fair Prices for Local Service Providers

In tourism, there are still some Gallic villages where the benefits of digitalization have not yet penetrated. As a result, travelers pay too much and at the same time too little of the price reaches the service providers – beneficiaries are large tourism corporations and agencies that buy services in bulk and can dictate prices to local providers due to their market power.

For this reason, Luefty has developed two Technologies that turn the two losers in this situation into two winners. With our booking software and the Luefty platform, we connect travelers directly with tourism service providers. Our auction technology uses artificial intelligence to ensure prices are in line with the market and performance. Automated processes and the elimination of middlemen simultaneously ensure that prices for end customers are lowered while still allowing local suppliers to earn a higher margin. The technology also includes the filling of empty legs, which results in an additional price advantage for travelers, but also in higher utilization for the service provider.

With the offer of airport transfers in the Dominican Republic, we have delivered the proof-of-concept and have already generated initial revenues of € 120,000 in the second fiscal year. We will now scale the offering into new destinations and other services offered by local tourism providers, such as on-site excursion tours and hotel beds/Airbnb locations.

 

The top reasons for investment

• First-mover in auctioning different tourism services
• Proof-of-concept & proof-of-market provided
• Very easily scalable business model
• Enables "fair trade travel" by bypassing agencies and their commissions
• Creates better utilization for tour/travel providers and significantly lower prices for travelers

 

What distinguishes Luefty from a classic start-up is the deep market knowledge and management-expertise: Together we look back on 60 years of activities in tourism, marketing and IT. Our development is not based on a product idea, but on our own experience in the industry and the right solution for an existing need.

 

For the first time, travel prices are optimized by automated auction technology within a booking engine.

Digitization is far from exhausted in the tourism sector. The founding team took advantage of this experience and knowledge and looked for solutions. The result is the proprietary „auction booking engine“ with the Luefty online platform. This can be used worldwide and offers different tourist services at optimized prices, connecting individual travelers directly with service providers.

 

At the heart of Luefty's technology is the auction booking engine.

The auction booking engine handles price negotiations between travelers and service providers completely automatically. Depending on the service provider (e.g. driver service provider for airport transfer, tour operator, hotel operator and many more) a specific auction model is used, which automatically negotiates the prices for the tourist. An essential part of the Luefty "auction booking engine" is our AI (artificial intelligence) software, a self-learning system which analyzes, which price can be negotiated at which time in which region with which service provider.

It is designed to anticipate the optimal price for the service provider's offer and, at the same time, to be able to provide the traveler with a fixed price offer below the usual market price immediately at the time of booking.

Settlement is automatic, without intermediaries, and leads to significant process cost savingsas it connects service providers and service recipients peer-to-peer. Thus, travelers and service providers win and free trade in travel occurs: Fair Trade Travel. Agencies, where a large part of the margins used to end up, are left out of the booking process.

The Luefty online platform is based on the Luefty auction booking engine and mediates different tourism services.

Luefty.com – platform for travel services with transfers as the first offer

In 2021, Luefty began offering transfer services (hotel or airport transfers) via the existing online auction platform as its first service.

Through our internet platform, B2C customers (tourists) and/or B2B customers (e.g. hotels) purchase a transfer service from registered and verified ride service providers.

The customer books at a fixed price, which is usually 20 to 30% below the prices quoted by agencies or travel portals (e.g. booking.com). As a self-learning system, the Luefty AI system determines the route prices and knows which price can be negotiated at which time, in which region and for which route.

The Luefty AI system starts an auction immediately after booking, wherein it sends an offer (paid booking price minus 40%) to all its transfer partners via the Luefty app. These can now "accept" or remain idle. If no transfer partner is found, a repetition with a new offer (booking price minus 30%) takes place.

This auction strategy repeats until the first partner has accepted the offer and is awarded the contract. This principle is illustrated in the following graphic:

The advantage for the ride service provider is the higher share he receives from the sales price achieved through Luefty. By eliminating price-dominating middlemen, the driving service provider is no longer deprived of up to 60% of the booking price in agency commissions. On the contrary, he gets a better starting price right from the start, which he can either accept or (in case of good utilization) refuse. This corresponds to the „Fair Trade Travel“ principle.

By the end of 2022, tour services (sailing trip, quad, zip line, safari, national park tour, etc.) and, from 2023, overnight stays are to be offered via the platform.

First Mover in Auction-Based Offers for Individual Tourists

Luefty faces no competitor with its auction booking engine in its individual tourism market segment and few competitors with its offered transfer and tour service. In essence, the following differentiating features emerge, which give us clear competitive advantages.

 

 

In particular, these include:

 

Better prices for service providers and travelers.

Luefty's auction technology can achieve a lower booking price for travelers based on AI insights and higher revenue for service providers by eliminating middlemen.

 

Luefty Auction Booking Engine.

The unique and proprietary software technology can connect a wide variety of tourism services and can also be used outside of luefty.com by market participants such as travel portals as a complementary product.

 

Auctions of tours

Luefty will be the world's first online platform to offer tour business through auctions, however, the auction will be started by the booker and ultimately can be accepted or rejected by him. The tool is expected to be available in a beta version on the Luefty platform by the end of 2022.

 

Combination of transfers and tours business

The product combination of transfers and tours enables very good cross-selling opportunities and highly competitive pricing.

 

High level of digitalization & global availability

There are countless small transfer companies that are only active in very specific regions and can only conduct their business with a high level of resources. With Luefty, almost all business processes can be automated, making global scaling very easy to implement.

The business modell – Luefty offers almost unlimited scaling and reach potential

Luefty's business model is based on a proprietary auction booking engine combined with AI technology to which almost any tourism service can be docked.

The Luefty online platform is based on the Luefty auction booking engine and mediates tourist services. Depending on the service - e.g. airport transfer, tour, overnight stay, etc., a specific auction model is used, which automatically negotiates the prices for the tourist.

Driving service providers and tour operators as well as hotels can register independently on the platform. Once registered, these service providers are informed about each relevant booking and can participate in the auction of the booked service. When a hotel registers, it receives a sales commission from Luefty for the brokered bookings (airport transfers). The registration process requires service providers to submit information (including personal data, vehicle photos, insurance, licenses), which Luefty checks for authenticity and legality - an important quality assurance aspect.

A dashboard is available to all service providers on the Luefty webpage. This shows details of the stored documents and all bookings made.

 

Hotels and airlines as distribution partners and multipliers

For distribution partners such as hotels or airlines, Luefty is an ideal cooperation partner. In almost all hotels today, local driving service providers are contacted from the reception to organize a transfer for the hotel guests.

Our market research has shown that hotel chains are very interested in outsourcing the transfer handling, so that the hotel staff can concentrate on their tasks. The only prerequisite is a competent and reliable partner like Luefty.

Luefty as a supra-regional and also transnational operating company is of great interest for hotel chains as we offer an efficient process and additional revenue potential (hotel receives commission for each transfer). At the end of February 2022, we agreed on a first test phase with a Spanish hotel chain that has 18 hotels in Spain (Mallorca, Almeria) and an annual transaction volume of 1,400 airport trips per hotel with an average fare of € 50.

If Luefty manages to complete the test phase to the satisfaction of the owners, a a long-term cooperation cooperation with all associated hotels has been promised. This would result in a potential annual transaction number of 25,000 transfers with a gross revenue of approximately € 1.3 million - this is not yet included in the financial plan.

 

For airlines, we strive for integration into the booking process of the flight ticket, so that the traveler can purchase a transfer service in addition to many other products (e.g. additional luggage, meals on board, travel insurance, etc.). This requires an interface to the airline's booking page, so that Luefty can send a transfer offer automatically by providing the hotel address. This process is more complex to implement, but at the same time the potential of such a sales cooperation is enormous.

 

Additional potential through SaaS offering

As soon as Luefty can demonstrate significant market success with the first tourism services (e.g. high transaction numbers), it will be relatively easy to convince globally operating online platforms (Airbnb, booking.com and many more) of the benefits and necessity of our price-optimizing software components.

 

Product development plan and milestones

Luefty has a detailed release plan for implementing and going live with numerous software components. A rough listing of the short- to medium-term plans are shown in the following graphic:

For this year, we have set ourselves the goal of agreeing on a first cooperation with an airline, so that corresponding interface programming will be required. These will also be required for hotel chains associated with us.

From 2024, we plan to integrate purchasing platforms for our numerous drivers. Here we will bundle purchases and negotiate volume discounts with service station operators, for example. We also want to look for alternatives for more favorable payment systems. As we continue to expand, it will be necessary to operate a service center, which can be outsourced if necessary. From 2025, we plan to develop 3D videos for virtual Oculus Tours in hotels.

Focus on a lucrative market niche

Luefty focuses exclusively exclusively on individual travelers (individuals, couples and families with children).

This tourism segment is growing massively due to the increased information possibilities via the Internet and many existing comparison and booking platforms. However, there are almost no globally operating auction companies like Luefty.

Individual tourists travel more frequently and usually undertake additional vacation activities (sports, visits to nature parks, boat trips, sightseeing flights, shopping, dining and bar stays) in addition to beach stays. Overnight stays take place in 3-5 star hotels, golf resorts and increasingly in Airbnb apartments. In addition, they are internet-savvy and have price-conscious booking behavior.

Before the Corona pandemic, there were 1.4 billion airport arrivals per year worldwide. Air traffic is forecast to more than double in the next 20 years.

Horizontal and vertical expansion offers enormous growth potential

Horizontal – expansion of mediated services

A gradual expansion of tourist services is planned. Airport transfers available on the Luefty platform are to be joined by tour auctions, hotel bed auctions, and more in the coming months and years.

 

Vertical – Geographic Expansion

With the Dominican Republic, Luefty is already successfully operating in a long-haul destination, and with Spain and Turkey, we cover two important European vacation countries in 2022. In the short to medium term, Luefty will position itself primarily in countries with strong tourism, especially the classic long-haul destinations.

 

In addition to the expansion of the B2C business and a controlled expansion policy, we are aiming for close cooperations with hotel chains and airlines.

 

Ongoing financing is expected to generate funds for the following measures:

50% of net revenues to fund product development

• Further development of the Luefty app
• Optimization of the existing auction booking engine and Luefty AI technology
• Development and programming of the auction software for tours
• Fine-tuning of the existing Luefty online platform

 

25% of net revenue to fund staff & sales activities

• Build staff in sales, marketing and customer service including costs for travel activities.

 

25% of net revenue to fund marketing activities.

Proof-of-Concept & Proof-of-Market provided

Our auction booking engine is already on the market and is being used in the Dominican Republic, Mallorca and soon in Istanbul and Antalya. Luefty has already generated a turnover of € 120,000 in the second business year with B2C business alone.

 

Unique auction technology & Best prices for buyers and sellers

We link our customers (tourists / travelers) directly with our suppliers (transfer and tour providers) and negotiate prices with the suppliers in an automated way using our auction technology. Intermediaries (travel agents) are eliminated. This way we generate better prices for travelers and service providers.

 

Unique selling proposition

With our "Auction Booking Engine" and the connected tourist transfer and tour services, we have a digital product that is unique in this combination.

This range of services makes it possible to offer complementary additional services in a simple way (e.g. tour-booker receives 50% discount at the driving service provider, etc.) and to generate additional sales.

 

Unicorn potential

Luefty's auction booking engine can be of high value for online travel platforms (Airbnb, booking.com, etc.) in the future. Once it is proven that an auction system in combination with AI technology can optimize prices for the benefit of all, new revenue streams with even greater scaling potential (software licensing business) will open up for Luefty worldwide.

 

Your investment becomes a transfer voucher

The first 100 investors will receive a Luefty service voucher worth 25% of the investment, capped at € 1.000. The voucher is freely transferable and can be used for a transfer or tour booking (available end of 2022) via the Luefty platform.