Last week we heard of huge news in the vacation rental space that is sure to send waves far and wide. Expedia, one of the leading companies in the travel booking industry has agreed to buy HomeAway for $3.9 billion in cash and stock in a deal that is to be finalized Q1 of 2016.
HomeAway features more than a million individual paid vacation rental listing in 190 countries. The company also owns a portfolio of brands that many of us in the vacation rental industry know as commonplace staples of the industry including vrbo.com, vacationrental.com as well as a number of smaller international sites.
This announcement has massive implication on everyone in the industry from booking websites like Airbnb to service providers like us here at Parakeet. It is clear that Expedia’s purchase of HomeAway was a direct move into competition with Airbnb and their insane growth over the last several years. The move also positions Expedia ahead of their largest competitor, Priceline Group, who currently does not have a stake in the vacation rental industry.
What does it mean for the industry?
This is the question on everyone’s mind at the moment. When you look at other large scale tech acquisitions in the recent past, the acquirer has let the acquired remain autonomous while still having access to the distribution, technology and capital resources of the larger parent company. This seems to also be the case for this acquisition as Expedia announced that HomeAway would stay based in Austin, Texas.
We predict that HomeAway will begin to move out of the shadow of Airbnb over the coming months with a direct play in the “sharing economy” space. The consolidation of the large players in the space will create a sort of land grab scenario for smaller service providers who need to make sure they have distribution channels through these sites in the United States as well as foreign markets. All in all, we look forward to the growth and maturation of the vacation rental space and are happy to be part of this flourishing industry.