Monday, November 23, 2015

How much is your vacation rental worth to Homeaway?

Save $25 on new 12-month listings at HomeAway.com with code G307. Expires Dec 31st, 2015.

I am sure most people have seen the news that Expedia is buying Homeaway for just under $4 billion. Expedia, one of the largest online travel businesses owning brands such as Hotels.com, sees
Homeaway helping it compete with AirBnB.

Homeaway currently has about 1 million properties listed on its various vacation rental sites. That means that Expedia are paying about $4,000 per property! Since a standard listing costs about $400, that means they are paying for 10 years worth of listings, right?

Well, probably not. With the acquisition, expect to see a shift towards more "transaction" revenues rather than annual listing fees.

At the moment, Homeaway generate revenues of about 3.5% of the value of all bookings made through their sites. However, they expect that to double as they move more of the listing base to the "commission-based" model rather than annual listing fees.

Furthermore, they expect the value of bookings to significantly increase as a result of Expedia's marketing.

So what does this mean for you, as a Vacation Rental owner? Well, increased bookings is good news! However, if you are still on an annual listing fee plan, it's possible that your property won't get the same marketing exposure on Homeaway sites as those on a commission basis. So, maybe you should consider switching?



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