How much is your vacation rental worth to Homeaway?

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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?

Tripadvisor acquires Holiday Lettings

Tripadvisor is one of the best known travel advice sites but is now getting serious about entering the holiday rentals market place.

Following on from the acquisition in 2008 of a majority stake in Flipkey in the US, Tripadvisor launched vacation rentals on its site in 2009 and in June 2010 acquired one of the better known European holiday rentals sites, Holidaylettings

For the moment at least, HolidayLettings will continue to be run independently, but no doubt Tripadvisor will be looking to leverage the synergies between HolidayLettings and the other Tripadvisor brands.

For owners who advertise with HolidayLettings, this should be good news. With 46 million visitors per month, Tripadvisor and its associated companies should be able to bring a lot more potential renters to the HolidayLettings site, which should translate into more holiday rental bookings.

In addition, the extra resources that Tripadvisor can bring to the table should help with increase funtionality on the HolidayLettings site.

No doubt Tripadvisor will also look to significantly increase the number of holiday rental properties on Holiday Lettings, (HolidayLettings are launching an affiliate marketing programme to incentivise adding properties) but hopefully, this won't result in the site suffering from the overcrowding problems of other large sites.

The acquisiton also indicates that perhaps Tripadvisor plans to take on Homeway in the battle to become the leader in the online vacation rentals marketplace. Tripadvisor's positioning as a trusted source of independent recommendations presents some interesting possibilities ...