In yesterday’s meeting with investors, Expedia took time to provide an update on activities related to their recent purchase of HomeAway. Expedia CFO Mark Okerstrom described the growth opportunities for HomeAway in two pieces, secondary homes and primary homes in urban markets.
Okerstrom also laid out a two phase plan to increase revenue for HomeAway which included 1) take what HomeAway already has, turn it to be 100% online, and better monetize transactions, and 2) leverage opportunities in the urban market.
“The traveler fee has been launched in the US, early. Encouraging signs. We like what we see,” said Okerstrom.
“We have really tilted the focus of this business from being a very supplier-focused business focusing on one side of the platform, focusing on getting subscription renewals – the right thing to do at the time – to really a two-sided platform, taking this formula (that Dara described to you) of bringing online marketing, world-leading conversion platforms, utilizing test-and-learn technology and supplier facing technology and turning it into a real online business”
Okerstrom added, “We’ve taken some of the money that we’ve seen incremental from the traveler fee, and we’ve started to put that back into the business. The introduction of a ‘Book with Confidence Guarantee’ essentially says, ‘Traveler, if you book on the HomeAway platform, and you don’t like the property or you have a dispute with the owners about the damage deposit, we will take care of it for you.”
“This is a difficult transition that we are pulling off, but we are opportunistic about what we’ve seen so far.”
During the Q&A, Expedia admitted that they had seen a “tick down in conversion rates” on HomeAway.
“It is so early, and the teams are still testing various combinations of subscription rates and traveler fees, so it is too early to give a take rate. We have seen a tick down in conversion rates as you actually might expect, nothing out of the ordinary, entirely expected.”
“We feel good about what we see,” he restated.
Expedia Inc. CEO Khosrowshahi reiterated that Expedia believes it can build HomeAway into a business with $350 million in earnings before interest, taxes, depreciation and amortization (EBITDA) by 2018, up from about $120 million last year.
after listing 2 properties with VRBOHomeaway for the past 15 years, its time to say goodbye. one of my listings expires next week, and the other one expires in a few months. I do not trust VRBOHA anymore. they have been boiling us frogs slowly in their pot of greed for months now and I was too dumb to notice. Now I am faced with the choice of just selling the houses and getting out altogether, or possibly looking into long-term rentals which means i wont get to enjoy going to our house with my family. thanks for NOTHING VRBO HA. you are the worst
I have been an extremely loyal Homeaway customer for 8 years, but will not be renewing my subscription when it expires next week. My million-dollar plus vacation home on the beach is not a commodity that can be booked without an open email conversation with my prospective guests — I have too much to lose. HA now punishes owners who do not like to use its expensive and buggy payment platform by hiding us at the bottom of the listings.
Further, HA displays punitive and false comments like
This owner accepts fewer than average inquiries
if the owner does not use the HA payment platform
or
To book this property, you need to complete your booking through checkout on the HomeAway website. We can’t protect your payment if we don’t know you’ve booked through us
The latter casts doubt in the mind of the traveler about working with me directly, despite my long record of excellent reviews from many travelers.
I have lost all trust and faith in HA and will no longer do business with them as either an owner or a traveler.