Wyndham Worldwide held its Fourth Quarter Earnings Conference Call Tuesday evening, and CEO Steve Holmes discussed the vacation rental business, working with HomeAway and Airbnb, and their new cohesive brand Wyndham Destination Network.
Vacation Rentals Revenue
We learned from Holmes that Wyndham’s vacation rentals revenue for the quarter “was up 8% in constant currency and excluding the impact of acquisitions in the Canvas divestiture. That increase reflects an 8.1% increase in transaction volume and flat average net price per rental.”
Holmes added, “We expect vacation rental transactions to grow 5% to 7% and average net price per rental to decline 1% to 3% primarily reflecting foreign exchange.”
Holmes also said, “We are moving to a more expensive vision of the business which combine offerings from our vacation rental and timeshare exchange brands to enable our Wyndham Worldwide customer base to experience vacation of their dreams. With rising awareness of the sharing economy and increasing consumer demand for unique places to stay, we believe this new strategy will drive higher customer engagement and higher growth in years to come.”
“Our portfolio of managed vacation rental brands posted great results in 2015. While some of our largest European vacation rental competitors had declines in vacation volume in 2015, all our brands both in Europe and the U.S. posted transaction increases enabling us to achieve transaction growth on organic basis of 7%.”
Wyndham Destinations Network, fka Wyndham Exchange & Rentals
Holmes: “Now turning to Wyndham Destination Network. As discussed on last quarter’s call, we changed the name from Wyndham Exchange & Rentals to reflect our standing as the world’s largest provider of professionally-managed unique vacation accommodations. Anything from cottages to castles to timeshare resorts.
“We continue to see momentum in our rental brands which strengthen our core customer source markets, which are the U.K., Denmark, the Netherlands, Germany and the U.S. Despite new entrants into the rental market, we’ve seen little impact in the competitive landscape. With the strength of our brands and the depth and breadth of our offerings, we provide a great value proposition to both homeowners and travelers. These attributes enables us to be largely insulated from economic as well as geopolitical risks and produce reliable consistent results.”
Working with HomeAway, Booking.com and Airbnb
According to Holmes, “Last year we bolstered our strong proprietary distribution network through global partnerships with online portal such as HomeAway and Booking.com. We’ll continue to pursue the strategy in 2016. We have local presence and global average, which provides strong advantages compared with the full rent by owner option in the same channels. Providing the wide distribution for a property owners has been a primary strategy for the Wyndham Destination Network and it’s working. For example, ‘Know This All’, our Danish brand now sources renters from over 80 countries, that’s up from 50 countries just 18 months ago.”
When asked whether Wyndham would consider working with Airbnb, Holmes responded, “As I commented, we are using Booking.com and HomeAway for some of our distribution. And HomeAway has been in this market for quite some time. This is not — they are not a new entrant and Airbnb has been there for a while.”
Holmes continued, “Airbnb’s systems do not accommodate our rental model as well as some of the others do. So as of right now, we’ve run some test that require a lot of manual effort to try to use Airbnb as a distribution channel force, because that’s really what they are. But we have not been able to find an automated way to do it. So I think it’s unlikely that they will be a big distribution avenue for us, but HomeAway and Booking.com will continue to be.”