Madrid G, Group 4, eDreams

Today I'm going to talk about eams

focusing on its business model and how

it strategically adopted after co

starting with the industry context.

Ereams operates in the online travel

agency or OTAA industry. This is a

highly competitive and very transparent

market where customers can easily

compare prices across platforms. Because

of this margins tend to be low and

companies rely heavily on scale and

efficiency to survive.

In terms of the operating model, Ereams

is an asset light digital intermediary.

It doesn't own planes or hotels.

Instead, it connects the travelers with

airlines and travel service providers

for its online platform. This makes the

business highly scalable as growth

doesn't require

heavy physical investment. The value

proposition for customers is simplicity

and personalization.

ED eS aggregates multiple travel options

in one place, optimizes prices, and uses

customer data to tailor offers. This

makes travel search faster, cheaper, and

more relevant to individual users.

Looking at the revenue model,

historically, Ereams relied one on one

off commissionbased transactions.

However, this has gradually shifted

towards recurring subscription-based

revenues which we will explore later.

Its cost structure is heavily driven by

technology and marketing. A large share

of costs are variable which give the

company operating leverage meaning

profit can grow faster when scale is

achieved. Finally, the strategic

rationale behind recent changes comes

from industry fragility and demand

volatility. Travel demand is highly

sensitive to external shocks which

pushed ereams to focus on building a

more resilient growth model. Before co

eams followed a transactional revenue

model revenue mainly came from

commissionbased fees on individual

flight or hotel bookings. The problem

with this model was that the margins per

user were low while customer acquisition

costs especially through Google ads were

very high. This made the business

extremely vulnerable to crisis. When CO

19 hit and travel stopped, revenues

dropped between 79 and 92%. Because

there were no recurring income base,

cash flow collapsed almost immediately.

In response, Ereams made a strategic

pivot after co toward a subscription

model called Eream Prime. Instead of

relying purely of on one-off bookings,

customers now pay a membership fee,

which creates predictable and recurring

revenue. This dramatically improves

visibility and stability of cash flows.

There's also a strong cost advantage.

Prime members are more loyal and tend to

go directly to the app instead of

searching Google, which significantly

lowers customer acquisition costs.

Most importantly, this model increases

resilience. Even when travel demand

slows, subscription fees continue to

generate cash. Today, Prime accounts for

around 74% of Eream's cash revenue

margin show how central it has to be it

has become to the business.

Moving on to the next slide. From

Ereams's perspective, Prime delivers

three major advantages. First is

predictable cash flow. Subscription

revenue is recurring and stable and now

now represents a majority of cash

revenue margin. Second is sup superior

profitability. Prime is the main profit

engine of the company contributing

roughly 87% of total cash marginal

profit. This is far more profitable than

simply selling tickets.

Third is higher customer loyalty. Prime

members book around book about 3.8 times

more frequently than non nons

subscribers. This improves retention and

th further reduces reliance on paid

advertising like Google ads. From the

customer's perspective, Prime also

creates clear value. Customers receive

immediate savings through guaranteed

discounts on flights and hotels, which

often exceed the cost of subscription

itself.

There's also increased flexibility and

security, especially if you through

features like cancel for any reason,

which allow risk-free booking. This has

increased renewal rates by around 15%.

Finally, Prime enables personalization.

AIdriven offers are tailored to

individual travel habits, creating a

Netflix-like experience for travel where

recommendations improve improve the more

the service is used.

Overall, Prime aligns the incentives of

both the company and the customer,

making it making it a strong strategic

response to an unstable industry.

Now, moving on to SL the next slide.

This slide shows how the company managed

the crisis and how that sets up that

sets up its long-term outlook. On the

left, we see the uncontrollable

variables, global lockdowns, border

closures, and virus variance, which led

to an extreme 92% revenue drop in 2020.

These were external shocks no company

could fully avoid. What really mattered

was how management responded. On the

right are the controllable variables.

First, cost flexibility.

With an 80% variable cost structure,

cost fell almost immediately when sales

stopped.

Protecting cash without the need for

bailouts. Second, liquidity defense. The

company secured 142 million in

liquidity, ensuring survival through the

downturn. And third, innovation. Instead

of cutting R&D, they continue investing

and launched new new prime features

during the crisis. Looking ahead to the

2030 road map, three priorities stand

out. One is AI acceleration with AI

already writing 30% of new code and

powering billions of daily predictions.

Two is diversification, reducing

reliance on flights by expanding into

trains and new markets like Latin

America. And finally, the target scaling

the script subscription base to 13

million members 13 million members by

2030. Overall, strong crisis management

didn't just ensure survival. It created

a platform for long-term growth.

>> On this slide, uh we're looking at how

eams balances cost and benefits to

perfect to protect profitability uh in a

very low margin industry. So, one key

strategy is using flights almost as a

loss leader. In some cases, Ereams earns

very little or even nothing on the

flight itself. But the real value comes

later in the booking journey. um extra

like baggage, seat selection, travel

insurance uh and service fees generate

margin and help offset that initial

loss. So the flight attracts the

customer but the add-ons create the

revenue. Um the second element is the

prime subscription model. Uh for

customers the benefit is immediate. They

get discounts right away on flights and

hotels. For ereams the cost is offering

those discounts but the upside is much

bigger. The annual subscription creates

predictable reoccurring revenue and many

users stay subscribed longer than

expected.

Um over time this also reduces customer

uh acquisition costs because prime

members come back directly instead of

through paid ads. Finally, there's

automation versus human support. Eream

relies heavily on automated systems to

handle bookings and changes. This allows

them to manage huge volumes with

relative uh relatively few employees um

keeping costs low. The trade-offs is

customer experience. When problems

happen, uh users may face delays or

frustration. In this case, part of the

cost is shifted to the customer while

eams protects uh its margins.

Uh now moving on to the next slide. uh

it explains why Ereams has been able to

maintain its position uh despite uh

intense competition. So starting with

one major advantage is uh they're the

pioneer of the travel subscription

model. Um while competitors like Trip

Advisor uh tried similar ideas, Eream

successfully scaled uh Prime to millions

uh Prime to millions of members. That

scale matters because Prime users behave

differently. they book much more

frequently and go straight to the app

instead of using Google. Another

advantage is uh supplier

diversification. Even with ongoing

conflicts with lowcost airlines like

Ryan Air, Ereams has maintained market

share by working with alternative

platforms uh and expanding into trains

uh car rentals and flexible cancellation

features.

Lastly, uh Ereams has strong flight

focused technology especially uh virtual

uh inner lining. This allows them to

combine flights from airlines that don't

officially uh cooperate, creating

cheaper or more convenient routes uh

that customers can't easily find uh

elsewhere.

So for the final slide, uh I'm going to

be talking uh about just how everything

comes together. Um mobile uh mobile

commerce uh has completely reshaped

Ereams' business. Uh the app is now uh

the core of the prime ecosystem shifting

the company uh from simply selling

tickets to owning the the customer

relationship. That's why most of the

revenue and profit mainly comes from

Prime members. Mobile uh mobile also

increases booking uh frequency with uh

push notifications uh constantly

updating users um that are obviously on

phones and uh travel definitely becomes

more habitual with this behavior. This

allows ereams to market directly to

customers without paying search for

search engines. Finally, AI powered

automation supports this uh entire model

from personalized offers to handling

trip disruptions. AI allows ERAs to uh

scale efficiently and uh in a very vital

industry. Overall, uh mobile commerce

hasn't just supported eam's strategy, it

has driven their transformation.