Expedia Agreed to Buy HomeAway: 3.9 Billion Reasons to Rethink Your Vacation Rental Business

November 6, 2015


Expedia Buys HomeAwayIf you’re a vacation rental manager and you happen to live under a rock or without internet access, then you probably missed that Expedia agreed to buy HomeAway.

According to several sources, including the Wall Street Journal, “Expedia Inc. agreed to pay $3.9 billion to buy vacation rental site HomeAway Inc., capping a string of increasingly expensive acquisitions and moving more directly into competition with Airbnb Inc.”

Wow! So what does this mean? Certainly, the details will iron out and we’ll know more over the course of time, but here are 3 initial reactions from the Q4Launch office.

1. You Have to Build Your Own Brand

At HomeAway, your individual listing was about one of one million. When someone is looking for a vacation rental in your area, your competitor’s property is literally right next to yours. Now, the possibility exists that your property will be competing with the hotels on Expedia. HomeAway may continue to operate independently, but with Expedia in the mix, it’s not outside the realm of possibility that your vacation rental properties will now have even more lodging competition.

How do you combat that? You build your own brand! We aren’t saying that you should avoid the larger listing sites at all costs because we recognize that your properties need to be where the consumers are going. However, if you are 70% or more reliant on third-party sites like HomeAway for your business, you need to really think about whether or not you’re comfortable with your business model changing overnight and you having no decision in the matter.

Bottom line: You have to regain control of your customer and build your brand!

2. The Vacation Rental Industry is Here to Stay

Ok, so that might not be earth-shattering news for anyone currently in the industry, but has there been a stronger statement exclaiming exactly that? Sure, Airbnb is valued at more than $25 billion, but Expedia has now lumped vacation rentals into their broader travel mix that include, airlines, rental cars, hotels, etc. Staying in a vacation rental is just as acceptable and mainstream as staying in a hotel.

3. HomeAway is Changing their Model to Compete with Airbnb

The same Wall Street Journal article states, “HomeAway said it would start charging some travelers fees to book properties on top of the commissions it already charges homeowners. The fee copies the structure Airbnb uses to collect revenue, though Mr. (Bryan) Sharples (CEO at HomeAway) said HomeAway would seek to undercut its rivals’ overall charges.”

A few things to think about:

  • Were you already planning on raising your rates in 2016? And will you still be able to raise your rates if HomeAway will automatically start charging the guests a fee on top of your listing price?
  • If HomeAway is trying to copy the model set forth by Airbnb, is it smart to put some listings on Airbnb (the “best” listing model already in place) as opposed to waiting for HomeAway to catch up?
  • Is all this too much to think about? Wouldn’t it be better to collect the majority of your bookings directly through your website?

In Conclusion

It’s no secret that the best place to finalize a booking is currently – and will always be – directly through your website. Direct bookings are the only way for you to completely control the process, build your brand, and own your customers.

If you are ready to take the step to decrease your dependence on third-party booking sites, we are here to help. Just click here, and we’ll set up a time to chat about our strategy that has helped our customers achieve these goals!