Expedia Adds HomeAway’s Vacation Rentals To Its Product Portfolio
Expedia (NASDAQ:EXPE), the largest online travel services provider in the world (in terms of booking volumes), announced the continuation of its partnership with leading vacation rentals website HomeAway, last week. The two companies entered into a pilot program in October 2013 by adding approximately 10,000 vacation rentals to the U.S. version of Expedia.com. The extended partnership allows Expedia to list more than 115,000 HomeAway vacation rental properties on its website in the U.S.
Rental owners and property managers will not have to pay more to opt in to the HomeAway expanded distribution network, and will continue to use HomeAway to manage their listings. HomeAway charges users a 10% commission per booking, plus credit card processing fees. Vacation rental owners and property managers who follow the subscription model to pay HomeAway aren’t part of the Expedia tie-up yet, but HomeAway states it will make an announcement in the first half of 2015 to add them to the extended distribution program. [1]
Vacation rentals are privately owned residential properties that property owners and managers rent to travelers on a nightly, weekly, or monthly basis. According to a study by PhoCusWright, the market for vacation rentals in the U.S. stood at $23 billion in 2012, lower than its levels prior to the recession. However, the share of online sales in vacation rentals doubled from 12% in 2007 to 24% in 2012, and this is expected to increase to 30% by 2014. [2]
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Expedia believes that the vacation rentals listing will complement its existing business and will not undermine its hotel bookings, which currently accounts for more than 70% of its revenue. While the partnership will give HomeAway vacation rental owners and property managers exposure to more than 13.4 million monthly visitors on Expedia, Expedia users will get the benefit of being able to bundle home rentals with flights, cars and other travel bookings offered through the website.
Catering to approximately 15% of the U.S. and European vacation rental bookings market, HomeAway is the world’s largest online marketplace for vacation renting. [3] HomeAway’s website has more than one million live listings in 190 countries. [4]
Our $85 price estimate for Expedia, is in line with the current market price.
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- HomeAway Vacation Rentals Get Broader Exposure With Expedia Launch, Skift, September 18, 2014 [↩]
- The Rise of U.S. Online Vacation Rentals, PhoCusWright, October 2013 [↩]
- HomeAway 10-K Report, www.sec.gov, FY 2012 [↩]
- Expedia and HomeAway Expand Rental Partnership, The New York Times, September 19, 2014 [↩]