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Expedia to buy Homeaway

By Ronald Lee
Published: 11/05/15 Topics: Advertising, AirBnB, Vacation Rentals Comments:

There’s always a bigger fish. Serial purchaser Homeaway has itself been acquired by Seattle based Expedia. And the price paid for the vacation rental giant? $3.9 billion. The deal is the sign of the times for digital travel sales, which has experienced massive M&A activity, like much of the economy this year.

While Homeaway has been busy dominating the vacation rental industry through acquisitions, Expedia has been doing the same in the wider digital travel sales. Homeaway’s many purchases this year (including Seattle based Dwellable just last month), pale compared to Expedia’s yearly activity which include massive purchases of Orbitz and Travelocity. Previously Expedia had focused on hotels, and so the addition of Homeaway to it’s portfolio presents some interesting changes.

Just what is Expedia’s plan with Homeaway? Expedia’s CFO said Homeaway would remain relatively autonomous, with it’s headquarters based in Austin. The main gain for Expedia appears to be hedging. Airbnb is one of the biggest travel competitor left to face Expedia, and of course, focuses on short term vacation rental stays. Expedia’s purchase of Homeway is a smart move to counter Airbnb’s growing share of the market.

The sharing economy is an attractive market compared to the business of connecting hotel users to hotels. Virtually any home in the world can become a rental property for Airbnb and Homeaway, and Expedia is diversifying to protect against pressure on the hotel industry. Plus, individual home owners are a more attractive partner than big hotel changes. Home owners have very little leverage or sophistication in the business, and generally take what portals like Homeaway and Airbnb offer them. However, distribution might become easier with the Expedia and Homeaway merger.

What can customers look forward to? Integrated booking might be a long shot, but this merger could give customers the ability to directly compare hotel and vacation rental accommodations. This doesn’t appear to be the play the companies are making, but we’ll have to wait and see.

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Author: Ronald Lee – Reporter, Vacation Rental Association
Blog #: 0478 – 11/05/15