Expedia Buys HomeAway (VRBO etc) And How This Affects You

Blog

Don’t Panic, Yet!

After years of speculation about whether it would be Expedia, TripAdvisor, the Priceline Group, or Google to purchase HomeAway, Expedia Inc. agreed to acquire the vacation rental giant for $3.9 billion in cash and stock.

In tandem with the acquisition announcement, HomeAway revealed it will change its business model midway through 2016 and will add a booking fee for consumers. Until now, unlike Airbnb, HomeAway charged fees to hosts but not to guests.

How Will This Affect You?

For a few months, this will probably not affect you too much at all if you are HomeAway (VRBO, Fewo, Owners Direct etc.) customer. All these businesses (Booking.com, Expedia etc.) are in the “instant online booking”, wholesale and redistribution business. Only 50% of HomeAway properties are currently bookable online and many of these are delayed approval, so they will be hard to assimilate. eExpect it to be a feeder station and as you can see, soon to be remodelled on who pays the extra.

HomeAway have been making the usual -“Must have Book Now” button noises for 12 months and various other suggestions such as including your own payment provider etc. They have been improving integrations and releasing new versions etc. This may all well see some strategic changes to fit with the Expedia model.

The slow-down in adoption of “performance booking contracts” adoption, the questionable average income per property compared to PriceLine for example, or Airbnb, explains the consumer fee. There is much less margin in the system than hotels. This may see more acceptance of a book now model but it will not replace the personal approach and host and availability controls that thousands of managers and owners require.  No wonder the board of HomeAway unanimously agreed to the sale!

It also means a much more serious approach for inventory data distribution. The general travel business (hotels, planes etc.) is all about wholesaling, fine margin management on huge volume, plus vast replicated distribution. Hardly suitable for a cottage down the end of the lane, a lodge on Lake Victoria or a rustico in the mountains!

Do not ignore these changes however, they affect us all.

Planning

We have all seen this coming in one shape or form and as the last bastion of a large portal providing direct consumer contact, based on subscription, this does change things.

Over the coming months we will be publishing advisory blogs, data sets and advice on how to use these mega businesses to your best advantage. Also information on how to re-market, collaborate, brand and control the booking flow and not have your business be controlled.

Comments

Get in touch