HomeAway, Inc. is the largest online vacation rental marketplace , representing 425,000+ paid vacation rental listings across 118 countries. HomeAway connects homeowners and property managers who advertise (or list) their properties available for rent, with travelers who may choose these alternative accommodations instead of hotels. Together, the HomeAway sites include in the U.S.: HomeAway.com, VRBO.com, VacationRentals.com, CyberRentals.com, A1 Vacations.com, GreatRentals.com, PM.HomeAway.com; U.K.: HolidayRentals.co.uk, Ownersdirect.co.uk; Germany: HomeAway.de; France: Abritel.fr, Homelidays.com and Spain: HomeAway.es.
HomeAway is a privately held company funded by leading venture capital firms Austin Ventures, Institutional Venture Partners, Redpoint Ventures, Technology Crossover Ventures and Trident Capital. Company headquarters is in Austin, Texas with additional offices in Smith Mountain Lake, Virginia; London, England; Kassel, Germany and Marseilles, France.
History
HomeAway, Inc was founded in February 2005 by Brian Sharples and Carl Shepherd who, after experiencing the frustration of finding vacation rentals for family travel, realized the potential of providing a more efficient way to find a vacation home. They initially acquired several sites and consolidated them into one vacation marketplace, launching HomeAway.com in June 2006. The site enabled travelers from having to search multiple regional sites to find a rental.
HomeAway announced in November 2006 its record $160 million in financing to fund global expansion initiatives, including the acquisition of VRBO.com (Vacation Rentals by Owner). The funding represented the largest financing of an Internet software and services company in the world in 2006, according to Standard & Poor's Capital IQ. HomeAway added VacationRentals.com in May 2007 and Homelidays.fr in February 2009 to its stable of vacation rental websites.
On November 18, 2009 - Us Weekly broke the exclusive news that HomeAway announced it will reunite actors Chevy Chase and Beverly D’Angelo in its new national advertising campaign that will recapture the spirit of the 1980s comedy classic, National Lampoon’s Vacation. The new HomeAway ad represents the company’s first ever national advertisement during the CBS television network broadcast of Super Bowl XLIV on Feb. 7, 2010. In addition to signing Chevy and Bev, HomeAway recently purchased an exact replica of the Family Truckster for use in the campaign.
Growing Market
Series D Financing
On November 11, 2008, HomeAway announced it had completed a $250 million equity capital raise, representing the largest minority investment of a U.S. internet company in the last eight years, according to Venture Source. The investment was led by Technology Crossover Ventures (TCV) and with existing investors Institutional Venture Partners (IVP) and Redpoint Ventures.
Forrester
According to Forrester Research analysts, Henry Harteveldt and Elizabeth Stark research on Why Online Vacation Rentals are a New Travel eBusiness Growth Segment , “Thirteen percent of US online leisure travelers rented a vacation home, villa, or condo in the past year, making this market segment an extremely attractive part of online travel’s “long tail” and a new source for travel eBusiness growth. There’s lots of good news: 29% of US vacation renters booked a vacation home online. And compared with the average leisure travel Booker, vacation rental Booker, vacation rental Booker make up a premium audience that includes more quality-focused travelers. The bad news? This audience is more frustrated with the Web, so the planning and booking experience needs to be stellar. Look for this segment to grow as travel intermediaries battle with real estate companies to dominate the space, with the winner providing the broader distribution and greater eBusiness savvy.”
NAR
The National Association of Realtors (NAR) reports a record percentage of new second home buyers – 25 percent – have purchased vacation homes with the intent to rent them out to vacationers, nearly doubling the number from just two years ago (13 percent in 2005).
Arthur Frommer
Travel expert, Arthur Frommer, predicted in 2007 vacation rental will “soar in popularity” because tourists will “at last have learned that such accommodations can be cheaper and infinitely more comfortable than hotels.
Economic Impact
On December 4, 2008 - Edward Iwata reported on a handful of companies, such as HomeAway, which continue to thrive during the recession. Even with the travel industry hurting, HomeAway's year-to-date sales are up 58% over 2007 and should continue to grow during the downturn.
The New York Times reported on August 14, 2008 that an uncertain economy and skyrocketing travel costs have many second home owners turning to vacation rentals to be able to keep their second home, while travelers are turning to vacation rentals to keep traveling, but make their money go as far as possible. Halfway through the 2008 season, vacations (and would-be vacationers) are being squeezed by a shaky economy: fuel prices that nearly doubled since the beginning of the year, airlines that have jacked up fares 17 percent since the start of the year; a dollar that stands like a pygmy alongside foreign currencies.
On May 26, 2008, USA Today posted a piece on tax advantages for those who rent their home for 14 days or less in a give year would not have to pay any tax on their rental income.
On January 20, 2008, David Kaufman’s story, “Number of Rooms Can’t Meet Surging Demand” for the New York Times, found that, “Although they will be much harder to secure in 2008, savings will be available even in the highest-cost destinations for travelers willing to work for them. Henry H. Harteveldt, travel analyst with Forrester Research in San Francisco, suggested opting for apartments instead of hotels for stays over four days or for small groups. “They are far more economical and can feel much more like home,” said Mr. Harteveldt, who suggested using Web sites such as Condo.com and HomeAway.com. “This is something I actually did on a recent visit to New York.”
Traveler Concerns
Some travelers still hold back fear to the phenomenon industry insiders call SNAD: significantly not as described. This involves a property that looks like paradise in the photos, but only to showcase leaky roofs and blocked views when you arrive. As a result, vacation rental companies such as HomeAway offer user reviews - with Expedia soon to follow.
Other potential concerns involve fraud listings where payment transactions occur between traveler and homeowner - only to later find that the listing does not exist. To address this issue, look for companies to offer a Rental Guarantee which promises to repay the cost for fraudulent listings.
Competitive Environment
On August 19, 2008, Orbitz announced its entrance into the vacation rental marketplace. The following day after the Orbitz announcement, Expedia’s TripAdvisor Web site took a majority stake in FlipKey, a website that features vacation rental properties.
References
- ^ *Cain Miller, Claire. "Vacation Rental Site Raises $250 Million", New York Times , November 11, 2008.
- ^ *US Weekly. "Exclusive: Chevy Chase, Beverly D'Angelo to Reprise Vacation Roles", US Weekly , November 18, 2009.
- ^ *Ante, Spencer. "HomeAway: A Find in Online Vacation Rentals", BusinessWeek Online , November 11, 2008.
- ^ *Harteveldt, Harry. "Why Online Vacation Rentals Are a New Travel eBusiness Growth Segment", Forrester Research , March 28, 2008.
- ^ *Frommer, Arthur. "Travel Expert Arthur Frommer Predicts What's Hot for 2007", Los Angeles Times , January 7, 2007.
- ^ *Iwata, Edward. "Some Companies (like Wal-Mart) Thrive Despite Recession", USA Today , December 4, 2008.
- ^ *Cohen, Billie. "Bright Spot in a Bad Economy", New York Times , August 14, 2008.
- ^ *Williams, Alex. "Pfffffffffft! There Goes the Vacation", New York Times , July 20, 2008.
- ^ *Block, Sandra. "Renting out your vacation home can have tax advantages", USA Today , May 26, 2008.
- ^ *Kaufman, David. "Number of Rooms Can't Meet Surging Demands", New York Times , January 20, 2008.
- ^ *Nassauer, Sarah. "Renting a Villa, Not a Dump", Wall Street Journal , November 5, 2008.
- ^ *Kaufman, David. "Orbitz adds vacation rentals to online offerings", Associated Press, August 19, 2008.
- ^ *Munarriz, Rick Aristotle. "Expedia's Widening Hammock"
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