Wednesday, November 15, 2006

Homeaway Acquires VRBO

Well, it finally happened: Homeaway, already the largest Vacation Rentals company on the internet, finally acquired VRBO for an "undisclosed" amount. However, Homeaway have raised an amazing $160m in financing to help fund the deal.

Will this be good for vacation rental owners? Already, Homeaway has gotten mixed reviews for it's acquisitions, including Cyberrentals , Greatrentals, A1Vacations and Holiday-Rentals.com. Although Homeaway has tried to offer additional benefits, such as discounted packages on several sites, high profile advertising and new features, many vacation rental owners have complained that they are not seeing the same quantity and quality of renters since those acquisitions, at least partially due to being "lost" among the vast numbers of listings on the Homeaway sites.

Now that VRBO has also been acquired, will that get even worse? Won't the competition on the Homeaway sites get even tougher, with all those extra VRBO listings to compete with?

What about the owners currently listed on VRBO : how will they feel about this acquisition? For many owners, being listed on VRBO was viewed as necessary, but expensive. Despite the often criticised user interface and marginal customer service, VRBO by and large got results. Will this continue to be the case under the management of Homeaway?

You also have to wonder, are the investors in Homeaway getting good value for their purchase? Let's assume that only half of the $160m that Homeaway have raised is going to fund their purchase of VRBO and that most of the vacation rental owners currently listed on VRBO will stay with Homeaway. This still works out at more than $3,000 per listing: that at least 10 years worth of subscription fees, which seems expensive to me.

8 comments:

Anonymous said...

I dumped VRBO several years ago and have not missed them at all.

You have to give the owners credit, they took a basic idea with an ugly web interface, didn't change the interace in 10 years, just increased their fees.

When they started charging extra for more photos and the number of photos you purchased dictated where you would show up in the results was a stroke of genius on their parts. Sure, it screwed the people who initially signed up and had a low listing number but what did they care?

They then found someone to pay them a fortune for their site.

Now, if vrbo goes (further) into the toilet what do they care? They have already made millions off of it.

Harry Johnson said...

As you say Mr Anon, kudos to the guys who made their fortune in the selling of VRBO. As usual in such matters I remember reading a quote from David Clouse (VRBO founder) explaining that they only sold to HomeAway because they had the companies interests at heart! Ha ha quite laughable really!

Anonymous said...

VRBO hasn't been changed because the site infrastructure is solid and is extrememly SEO friendly. Putting the sites organic rank at risk would be the worst move they could possibly do. As for the prices, yes they have gone up but so has traffic and conversion. Lets face it 120,000 rental owners continue to renew every year because it works. VRBO is old and not the best cosmetic site but travelers go there because it contains the most robust inventory choices in the most markets. VRBO was worth every penny!

Alfred said...

"Pricing Power: HomeAway-Owned VRBO Raises Prices--Again!"
January 19, 2009

by Alfred and Emily Glossbrenner, www.fullybookedrentals.com.

Here's the link:
http://www.fullybookedrentals.com/articles/20090115

Frank said...

I have been with VRBO almost 2 yrs, great untill they made me delete all but their 5 basic photo's, talk about too big too fail, from this negative experience I've seen how they lost money on my account & more too come, could not even get a e concern response
Frank Panama

Laila said...

We have been with Home Away and joined VBRO under a Home Away and VRBO special offer. I've been very put off by the limitation to allow only 5 pictures. With Home Away we got 12 pictures initially and now it is 16 pictures. What can one show with 5 pictures. If I get a lot of bookings from VRBO I will continue. But if not, I am certainly opting out.

Anonymous said...

Has anyone ever tried HereStay? They offer reward miles for booking with them, which is more than most rental sites offer.

Bob A said...

I have been a VRBO user since the early 90's. I do everything I can to obtain and hold a high rating and listing position. Until recently, I was one of the top listings in our geographic location. When I checked today, I was on the 7th page. Inquiries have predictably declined. The issue is the insertion of a property sequence within the location. This is redundant; property was and is specific choice option. The properties are not even alphabetical. This sucks.