AUSTIN, Texas—When Carl Shepherd and Brian Sharples met over coffee one sunny day in Austin, in February 2005, they had no idea their seed of an idea would blossom into an enterprise with more than a million listings in 190 countries and worth $3.9 billion.
That’s the value placed on HomeAway by online travel agency Expedia, Inc., which on 4 November announced its intentions to acquire the vacation rental platform in a deal expected to close during the first quarter of 2016.
external
|
external
|
The two co-founders likely also had no idea the broader space in which they’d operate within the sharing economy eventually would become so crowded. Platforms such as Airbnb, Onefinestay and Tujia are but a few. New entrants seemingly emerge with each passing day.
Hotel News Now spoke with HomeAway’s chief revenue officer, Jon Gray, about the platform’s place in the sharing economy, how its surrounding landscape has changed, and whether it will one day distribute hotel rooms.
Hotel News Now: Where does HomeAway fit within the broader accommodations space? Does it complement or compete with hotels?
Jon Gray, Chief Revenue Officer, HomeAway: “HomeAway serves families and groups who want to vacation together. By renting an entire home, travelers get more space and privacy for less than the cost of multiple hotel rooms. While vacation rentals may compete with hotels in some cases, a majority of rentals exist in markets underserved by hotels.
“Keep in mind that vacation rentals have been around a long time. We didn't invent the category, we just aggregated the supply online and created a service that makes it easier for travelers to find and book a property. As the vacation rental experience improves, certainly families and groups will increasingly choose renting a home.”
HNN: Who are HomeAway’s direct competitors?
Gray: “HomeAway competes directly with other traditional vacation rental inventory listed on sites like TripAdvisor, Booking.com and (Wyndham Vacation Rentals).”
HNN: What makes HomeAway different from other platforms?
Gray: “HomeAway is different from others because of our focus on listing entire homes, not rooms or spaces, the majority of which are in traditional vacation destinations. Also, individual owners manage the majority of homes listed on our sites, which means that much of HomeAway’s inventory is unique and cannot be found elsewhere. Also, based on survey data, we know that HomeAway drives more bookings for owners and property managers than other sites.”
HNN: HomeAway was founded in February 2005. How did the hotel industry first react upon its inception?
Gray: “For many years, hotels and others did not pay much attention to vacation rentals. When HomeAway was founded in 2005, overall consideration for the category was very low; approximately 8 to 10% of Americans even knew renting a home was an option. Unaided awareness for vacation rentals has since increased to more than 35%.”
HNN: It seems hotel executives are only now paying attention to the so-called sharing economy. Why? What has changed to make them more aware?
Gray: “As companies like HomeAway have invested in marketing, awareness among consumers has grown. Also, staying in a vacation rental is a very popular experience. Our surveys show that 84% of travelers plan to stay in a vacation home again after doing so for the first time.
“From a business perspective, the industry has grown too large to ignore. It’s estimated to be worth $100 billion in the U.S. and Europe alone, and we predict HomeAway owners and property managers will generate $14 (billion) to $16 billion in bookings this year.”
HNN: How has HomeAway changed since its inception—in terms of offerings, target customers, geographic footprint, etc.?
Gray: “Since inception, HomeAway’s geographic footprint has grown dramatically. Today HomeAway lists nearly 1.2 million properties in 190 countries. As we successfully grew our business through acquisition, we faced some unique technological challenges along the way, including the long process of migrating 20-plus sites onto a single platform.”
(Editor’s note: The HomeAway portfolio includes the vacation rental websites HomeAway.com, VRBO.com and VacationRentals.com in the United States; HomeAway.co.uk and OwnersDirect.co.uk in the United Kingdom; HomeAway.de in Germany; Abritel.fr and Homelidays.com in France; HomeAway.es and Toprural.es in Spain; AlugueTemporada.com.br in Brazil; HomeAway.com.au and Stayz.com.au in Australia; Bookabach.co.nz in New Zealand; and Asia/Pacific short-term rental site travelmob.com. HomeAway also operates BedandBreakfast.com.)
“Now, with that hurdle mostly behind us, we are making investments to improve the traveler experience. We will do so by better matching travelers with the perfect rental, offering more comprehensive protection and making our mobile experience even more robust. … Ultimately, our business is evolving from a simple classified listing service to a transactional marketplace that offers various tools and services powered by technology.”
HNN: Can hoteliers distribute their rooms on HomeAway?
Gray: “We do not currently allow hotel rooms on HomeAway sites as the inventory is inconsistent with what travelers are looking for when they visit HomeAway. If a hotel has a product that is consistent with the experience of staying in a home, offering things like full kitchens and living rooms, then we will consider listing it.”