NextTrip Invests in Luxury Travel Brand Five Star Alliance to secure 49% Stake with an Option to Purchase a Controlling Interest

Rhea-AI Summary

NextTrip (NASDAQ:NTRP) has announced the signing of definitive agreements to acquire a 49% stake in Five Star Alliance, a luxury travel agency, with an option to purchase a controlling interest by April 7, 2025. The initial purchase is expected to close by February 14, 2025, funded through a combination of cash and NextTrip shares.

Five Star Alliance, founded in 2004, features a curated collection of over 5,000 luxury hotels and resorts worldwide, attracting more than 400,000 monthly site visits and maintaining a 4.9-star Trustpilot rating. The company offers a proprietary search engine, exclusive rates, and specialized luxury cruise programs.

Post-acquisition plans include integrating Five Star's luxury hotel inventory, establishing a NextTrip luxury cruise division, and directing Five Star Group leads to NextTrip staff. Five Star's senior management will join NextTrip to help identify synergies and accelerate revenue growth in both travel and media sectors.

Positive

• Option to acquire controlling interest in Five Star Alliance by April 7, 2025
• Access to Five Star's portfolio of 5,000+ luxury hotels and resorts
• Integration with high-traffic platform (400,000+ monthly visitors)
• Transaction expected to be accretive
• Expansion into luxury travel market segment
• Addition of Five Star's senior management team

Negative

• Significant cash and stock expenditure required for acquisition
• Execution risk in integrating two different business models
• Potential dilution from share-based payment component

Insights

Investment Analyst

This strategic acquisition represents a calculated entry into the premium travel market segment, with several notable implications for investors:

Strategic Value Drivers:

• The two-step acquisition structure (49% initial stake with option for control) provides NextTrip operational flexibility while limiting initial capital exposure - a prudent approach for a smaller cap company
• Five Star's 400,000 monthly visitors and 4.9 Trustpilot rating represent significant immediate value, potentially accelerating NextTrip's market presence
• The integration of Five Star's proprietary booking engine with NextTrip's technology platform could create substantial operational synergies

Revenue Acceleration Opportunities:

• Immediate access to luxury hotel inventory expands NextTrip's addressable market
• Creation of a luxury cruise division diversifies revenue streams
• Group lead generation transfer to NextTrip staff suggests quick revenue capture potential

Risk Considerations:

• Integration complexity in merging technology platforms and operations
• Potential cultural challenges in combining luxury and mainstream travel operations
• Execution risk in maintaining Five Star's premium brand positioning

The timing of the deal, aligned with seasonal booking trends, suggests thoughtful strategic planning. The retention of Five Star's senior management team significantly mitigates integration and operational risks while preserving valuable industry relationships.

Technology Integration Specialist

The technology integration strategy reveals several critical success factors:

• The merger of Five Star's proprietary search engine with NextTrip's platform could create a differentiated booking experience in the luxury travel space
• Integration of Five Star's supplier relationships into NextTrip's infrastructure may enable real-time inventory access and enhanced booking capabilities
• The combined platform could leverage advanced data analytics to optimize pricing and personalization, particularly valuable in the luxury segment

Key technical considerations include data migration complexity, API integration requirements and maintaining service continuity during the transition. The retention of Five Star's senior management suggests continuity in technical operations, important for preserving the integrity of their highly-rated booking platform during integration.

Transaction Expected to Strengthen NextTrip's Platform, Unlocks New Integration and Growth Opportunities

Five Star Senior Management to Join NextTrip to Help Define Key Areas of Synergy and Revenue Acceleration in Both Travel and Media

SANTA FE, NM / ACCESS Newswire / February 6, 2025 / NextTrip, Inc. (NASDAQ:NTRP) ("NextTrip," "we," "our," or the "Company"), a leading travel technology company, today announced it has signed definitive agreements to purchase 49% of the membership interests of Five Star Alliance. Additionally, subject to the satisfaction of certain conditions, the agreement provides NextTrip with an option to purchase a controlling interest in Five Star Alliance by April 7, 2025. NextTrip previously announced the signing of a non-binding Letter of Intent (LOI) to acquire Five Star Alliance on November 5, 2024. The initial purchase of the 49% stake is expected to close on or before February 14, 2025, and is subject to satisfaction of customary closing conditions.

The purchase of the 49% stake will be funded through a combination of cash on hand, and NextTrip shares, determined based upon NextTrip's stock price and the terms outlined in the November 2024 LOI, with customary adjustments applied. This transaction is anticipated to be accretive, enabling both companies to begin leveraging shared touchpoints to drive growth in travel bookings.

Founded in 2004, Five Star Alliance is a premier luxury travel agency known for its curated collection of over 5,000 five-star hotels and resorts worldwide.

Key Highlights of Five Star Alliance:

• Proprietary search engine delivering exclusive rates at luxury hotels and resorts

• Strong industry relationships with preferred suppliers

• Specialized luxury cruise programs and group travel expertise

• 20-year legacy of excellence in luxury travel

Five Star Alliance offers personalized recommendations, high-end travel solutions, a proprietary booking engine and established relationships with premium travel providers, resulting in an industry coveted 4.9-star Trustpilot rating. These combined offers have resulted in monthly site visits from over 400,000 viewers and are expected to align seamlessly with NextTrip's technology-driven approach.

"This transaction will strengthen NextTrip's platform, unlocking new integration and growth opportunities to serve both B2C and B2B markets," said Bill Kerby, CEO of NextTrip. "By leveraging Five Star Alliance's expertise, search engine, and supplier relationships, we intend to expand our luxury travel offerings and expect to drive revenue growth."

NextTrip opted to purchase the 49% interest to take advantage of seasonal booking trends, and after closing, the parties will immediately work towards revenue acceleration programs that include:

• NextTrip gaining access to the Five Star luxury hotel inventory

• The set-up of a NextTrip luxury cruise division

• Immediately directing all Five Star Group leads to NextTrip staff for fulfillment

• Review and enhancements of the NextTrip travel agent platform

As part of the transaction, members of senior management from Five Star will be joining NextTrip and will immediately begin working with our team to help define key areas of synergy with a focus on revenue acceleration in both the travel and media areas.

John P. McMahon, Chief Executive Officer and significant owner of Five Star Alliance, added, "We are thrilled to align and move forward with NextTrip, combining our best-in-class technologies and travel packaging to deliver a seamless, end-to-end solution for travelers worldwide. Our traveler-first approach has been developed to ensure unprecedented access to the lowest rates and value-added offerings, all supported by exceptional customer service. Unlike traditional Online Travel Agencies (OTAs), which prioritize their own profit margins, we focus on what's truly best for the customer. Travel is a journey that should never be undertaken alone, and together with NextTrip, we endeavor to redefine the future of travel planning and purchasing."

Additional information about the Five Star Alliance transaction and the terms thereof are included in the Current Reports on Form 8-K filed by NextTrip with the Securities and Exchange Commission (SEC) relating to this transaction.

About Five Star Alliance

Five Star Alliance has been a leader in luxury travel by offering the most comprehensive, hand-picked collection of five-star luxury hotels and resorts worldwide since 2005. Backed by an award-winning staff to guide and assist guests throughout their entire journey, Five Star Alliance provides a full range of travel products including airfare, transportation, luxury river and ocean cruises, group and meeting services, concierge services, and more. Five Star boasts an industry-leading customer satisfaction rating of 4.9 stars on Trustpilot. For more information visit www.fivestaralliance.com.

About NextTrip

NextTrip (NASDAQ: NTRP) is a technology-driven platform delivering innovative travel booking and travel media solutions. NextTrip Leisure provides individual and group travelers with vacations to the most popular and sought-after destinations in Mexico, the Caribbean and across the world. NextTrip Media platform - Travel Magazine offers a social media platform for viewers to explore, educate and share with friends their "bucket list" travel. Additionally, NextTrip is launching an end-to-end content ecosystem that uses AI assisted travel planning capturing advertising, building brand awareness, rewarding loyalty and driving bookings. For more information and to book a trip, visit www.nexttrip.com.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). Statements preceded by, followed by or that otherwise include the words "believe," "anticipate," "estimate," "expect," "intend," "plan," "project," "prospects," "outlook," and similar words or expressions, or future or conditional verbs such as "will," "should," "would," "may," and "could" are generally forward-looking in nature and not historical facts. These forward-looking statements involve known and unknown risks, uncertainties and other factors. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are risks relating to, among other things, closing of the initial purchase of the 49% stake, including the expected timeline for such closing, expectations regarding the acquisition of Five Star Alliance interests by the company, including related to the synergies of the two businesses and future plans related thereto, the company's option to purchase a controlling interest in Five Star Alliance, expected benefits of the transaction and any other statements regarding the company's future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts. This information may involve risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. These risks and uncertainties include, but are not limited to: the risk that the initial closing may not occur on or before February 14, 2025, or at all; the risk that the required conditions underlying the company's option to purchase the controlling interest may not be satisfied; even if such conditions are satisfied, the company may not elect to exercise its option to purchase the controlling interest in Five Star; risks that the transaction disrupts the company's current plans and operations; the diversion of management's time on transaction-related issues; continued availability of capital and financing for the company; the risk that any announcements relating to the transaction could have adverse effects on the market price of the company's common stock or operating results; and the risk that the transaction and its announcement could have an adverse effect on the ability to retain and hire key personnel, to retain customers and/or to maintain relationships with business partners, suppliers and customers. The company can give no assurance that it will acquire a controlling interest in Five Star Alliance. The company disclaims any intention to, and undertakes no obligation to, revise any forward-looking statements, whether as a result of new information, a future event, or otherwise, except as required by applicable law. For additional information regarding risks and uncertainties that could impact NextTrip's forward-looking statements, please see disclosures contained in the company's Annual Report on Form 10-K for the fiscal year ended February 29, 2024 filed with the SEC on September 4, 2024 and our other filings with the SEC which may be viewed at www.sec.gov.

Contacts

Chris Tyson
Executive Vice President
MZ Group - MZ North America
949-491-8235
NTRP@mzgroup.us
www.mzgroup.us

SOURCE: NextTrip, Inc.

View the original press release on ACCESS Newswire

FAQ

What percentage stake is NextTrip (NTRP) acquiring in Five Star Alliance?

NextTrip is acquiring a 49% stake in Five Star Alliance, with an option to purchase a controlling interest by April 7, 2025.

When will NextTrip's (NTRP) acquisition of Five Star Alliance close?

The initial 49% stake acquisition is expected to close on or before February 14, 2025, subject to customary closing conditions.

How many luxury hotels are in Five Star Alliance's portfolio?

Five Star Alliance has a curated collection of over 5,000 five-star hotels and resorts worldwide.

How will NextTrip (NTRP) fund the Five Star Alliance acquisition?

The acquisition will be funded through a combination of cash on hand and NextTrip shares, based on NextTrip's stock price and terms from the November 2024 LOI.

What is Five Star Alliance's current monthly visitor count?

Five Star Alliance receives over 400,000 monthly site visits.