HomeAway is a fast-growing publicly traded company doing innovative things in the rental lodging space. As one of the world’s leading on-line marketplaces, with more than one million listings in 190 countries, their goal is to offer a complete marketplace for a traveler to choose from – including the demand for vacation ownership and resort-style accommodations.
In the past few years, they have partnered with the vacation ownership industry to grow the selection (an additional revenue stream beyond traditional vacation home rentals offered by owner or property managers) and for resort to monetize unsold or unused inventory. Blurring those lines, the vacation rental traveler and the timeshare buyer both possess similar attributes – from education, to income, family size, and the number and type of vacations they take each year.
Developments touched base with President & COO Brent Bellm early in 2015, and here are a few clips from that conversation.
You have now been an ARDA member for 2 years. What sparked the genesis of this relationship?
HomeAway’s venture into the vacation ownership industry began with initial conversations I had with Larry Gildersleeve in Seattle a few years ago. From that conversation, Larry came on board as our consultant and was instrumental – working with Jeff Hurst, HomeAway’s vice president of global e-commerce – to explore distribution partnerships with vacation ownership companies.
Beginning in 2012, we engaged a number of vacation ownership industry leaders, including Westgate Resorts and Wyndham Worldwide, to distribute their inventory on HomeAway to gauge the demand of timeshare-style accommodations from HomeAway travelers. Traveler demand showed a very strong initial surge, and we knew we could create a synergy within the industry.
Our relationship with ARDA was initiated at the same time. HomeAway is an ARDA Trustee Member, and we have attended the last two ARDA World conferences – as well as penned by-lined articles for Developments – and we provide front-line support in the legislative and regulations realm as well.
What platforms and functions does HomeAway off that you are most excited about – anything new that you’ve just launched or are releasing in 2015?
In the last two years, we have grown on-line booking for owners and property managers significantly, and most recently, with vacation ownership suppliers. On-line booking is paramount to meet the increased demand for travelers. To meet this demand, HomeAway is striving to make all of our listings bookable online within 24 months.
With this function comes the ability for any HomeAway listing to be listed on a pay-per-booking model. The commission-based listing model, apart from our annual subscription-based model, provides vacation ownership-style properties the option to be listed on HomeAway with no financial risk, only paying a ten percent commission at the time of booking. This method makes properties like unoccupied timeshare units able to list at various times of the year on an as-needed basis. Pay-per-booking is a new offering for vacation ownership suppliers and will have a great impact on increasing the selection of properties for vacation rental travelers to choose from.
One new initiative for 2015 is the expansion of our product offering to support “multi-unit” listings, for suppliers that rent multiple, comparable units at the same location. We recognize the difficulty that both suppliers and travelers feel when trying to navigate multi-unit inventory across the vacation rental landscape. As such, throughout 2015, HomeAway will be actively working on a variety of new products to help address many of the pain-points that both suppliers and travelers feel around timeshares, resorts, and other multi-unit accommodations. These new product offerings will be aimed at developing supplier tools that help them more efficiently manage the marketing and booking of multi-unit properties and streamlining traveler search and booking experience for these properties.
What key partnerships have been critical to your foray into the vacation ownership space?
Our most valuable partner to date has been VacayStay Connect (formerly Vacation Storebuilder). When HomeAway pilot-tested timeshare inventory on our site, the demand was very impressive, but the integration between the individual timeshare companies’ and HomeAway’s booking systems left a barrier to success in maximizing the properties’ bookings.
HomeAway has had a relationship with VacayStay Connect for a number of years, involving their e-commerce site building for property managers, and when we identified the opportunity to bring value to the vacation ownership industry, we engaged VacayStay Connect to work with us on facilitating the technical integration between HomeAway and vacation ownership rental suppliers.
VacayStay Connect now offers a turn-key solution for vacation ownership suppliers to showcase and rent their resorts on the HomeAway network of sites, using HomeAway’s on-line booking capability and commission-based pay-per-booking listing options, enabling suppliers to rent portions of their inventory at no financial risk. The booking capability integration provides a top-notch listing to attract travelers with updated rates and availability calendars and a secure, seamless booking and payment process.
Impactful industry figureheads such as Diamond Resorts International, Interval International, Westgate Resorts, and Wyndham Worldwide are already onboard with the new VacayStay Connect program, listing their inventory with HomeAway. If resort developers and vacation ownership rental departments are interested in accessing the massive demand for their properties on the HomeAway network, VacayStay Connect is now offering this integration capability.
What trends – whether technological or consumer/social or economic – are you hoping to capitalize on to place HomeAway as a leader in this market? And what are the biggest threats to success in this space in the next few years?
The prevalence of e-commerce and the desire for travelers to experience a seamless booking and payment process is the most important initiative for HomeAway at this time. We made a declaration in December that our goal is to enable on-line booking for 100% of our inventory in the next two years. The traveler experience in vacation rentals is unmatched in the travel industry once they stay in a home, but the booking experience is often one that turns travelers away.
Mobile use in the travel industry is also a point of focus for HomeAway. In 2014, we garnered nearly 40% of our site traffic through mobile devices and experienced and uptick in the bookings from those devices. Additionally, we announced HomeAway mobile app integrations with car service, Uber, and grocery delivery service, Instacart, as well as Gogobot, a provider of traveler-sourced local information and recommendations. HomeAway is planning more mobile integrations in the near future to further enhance the vacation rental process from search to book-to-stay.
As far as threats are concerned, our largest concern is not a threat but an opportunity. With each year that passes, more and more travelers are choosing vacation rentals for their next trip. It is our responsibility as an industry leader to bring more people to this wonderful experience and keep them coming back.
With a constant increase in popularity comes negative attention as well, and government regulation is a rather hot topic in many communities. HomeAway has always been a proponent of fair and balanced vacation rental regulation, and we believe that proper education of both owners/managers and local governments is important to come to an agreement on how local governments can collect their due taxes and/or licensing fees, and vacation rental owners can continue to rent their homes without their property rights being infringed upon.
AirBnB, ZipCar, and Uber are good examples of the success of “shared economy” products recently enjoying fast growth. How is HomeAway’s business model similar and/or different?
Unlike Airbnb, HomeAway only lists whole vacation homes and never chargers travelers a fee. Vacation is the number one reason guests book a HomeAway rental and therefore the average party size is larger and length of stay longer. The companies’ business models are also very different – the majority of HomeAway’s listings are subscriptions, though the company does offer a pay-per-booking model, whereas Airbnb takes a percent of every transaction from both the host and guest.
We don’t put ourselves in the same sharing categories outside of home rentals, but Uber is something HomeAway is very excited about! This year, we actually integrated the Uber app functionality within the HomeAway app, so travelers can now order an Uber from the HomeAway app.
In the next five to ten years, what game-changing innovations and key changes do you foresee for hospitality/lodging?
The key to growth and innovation in this industry will lie on the shoulders of mobile traffic and booking. Mobile devices are the first thing we interact with in the morning and the last thing at night. As I mentioned before, our site traffic last year was about 40 percent sourced from a mobile device and that has only been growing from previous years. A sophisticated site search and booking process not only needs to continually evolve but also needs to add services, which is where key integrations will provide an influential role.
In the vacation ownership business, specifically, I believe we will see more resort developers and suppliers testing the waters of the vacation rental market for their unused and unsold properties. I believe we’ll also see further distribution of these properties not only on our sites but on third party sites as well, such as Expedia.com, with whom HomeAway already lists pay-per-booking properties currently. Increased but also high-quality exposure is essential in this competitive environment and we want to partner with professionals such as those in the vacation ownership industry to ensure we’re offering the best accommodations for our travelers.