1. Homeaway.com
Jc Magnin
Jeanchristophe.magnin@essec.fr
Business sectors ‘The largest investment from an internet
The vacation rental market is estimated to 48 company in the last 8 years’6 (Wall Street
US$ Billion for US and Europe only. It is Journal): Institutional Venture Partners (that
spliting in two segments: Rent-by-owners (56%) ponied up $45 million)7, Technology Crossover
and professional Properties Managers (44%)1. Ventures and Redpoint Ventures raised a total of
$250M in order to acquire Homelidays in
Homeaway is positionned on both segments and February 20098.
is specialized in Online vacation rentals2. In
2007 it generated 12% of the overall vacation Business model
rental revenue. More than 17% are expected by As a company that offers vacation rentals
20103. The company targets leisure customers. Homeaway competes on Consumer Services
Industry (by operating like any other travel
Geographical overview of operations agency), but also in the Leisure (by providing
Homeaway started its operation in United States, lodging offers) and Media (by collecting and
and expanded it through European countries delivering information) industries9.
including France, United Kingdom or Germany.
Nowadays, the company is offering vacation Homeaway's business model is based on online
rentals in 145,000 locations in 118 countries. subscriptions paid by homeowners and property
managers10. Hence, the company’s challenge is
Key developments in the company's to acquire as much as possible owners listings.
history
Thus, Homeaway connects homeowners and
In 20054 Austin Ventures and Redpoint
properties managers with travellers who then
Ventures raise $49M in order to FeWo-direkt.de
can browse hundreds of thousand destinations in
(December), Holiday-Rentals.co.uk (February)
more than a hundred countries11.
TripHomes (February), A1Vacations (February),
GreatRentals.com (February), and CyberRentals
BUT by becoming the world’s leader of the
(February).
Online Vacation Rentals companies,
HomeAway also attracts attention of direct
‘2006 Fund raising record on the internet
competitors such as Forgetaway.com12,
sector’5: Institutional Venture Partners and 13 14
Hotels.com , and Group RCI . The competition
Trident Capital raised $160M to acquire
also includes independent Property Managers,
VRBO.com, November 2006.
In 2007 Homeaway OwnersDirect.co.uk (July),
VacationRentals.com (May 2007) and Abritel.fr
6
(January 2007). HomeAway in the News 2008, HomeAway.com, HomeAway website, 2008,
http://www.homeaway.com
7
HomeAway: A Find in Online Vacation Rentals, Spencer E. Ante, 2009,
http://www.businessweek.com
8
HomeAway company Profile, CrunchBase, 2009,http://www.crunchbase.com
9
HomeAway.com competitors, Hoovers, Hoovers website, 2009,
1
Vacation Rental Marketplace: Poised for Change, PhocusWright, 2009, http://www.hoovers.com
10
http://www.phocuswright.com Some companies (like Wal-Mart) thrive despite recession, Brian Sharples HomeAway
2
HomeAway vacation Rentals, Homeaway.com, 2009, http://www.homeaway.com Chief Executive, 2008, http://www.usatoday.com
3 11
2008 TripAdvisor, blog flipkey.com, http://blog.flipkey.com How do the sites work?, Online Press Kit, HomeAway, HomeAway website, 2009,
4
Homeaway.com acquisitions, CrunchBase, CrunchBase website, 2009, http://www.homeaway.com
12
http://www.crunchbase.com Forgetaway.com deal only by rent-by-owners, http://forgetaway.weather.com
5 13
HomeAway Secures Record $160 Million in Financing, Venture Capital News, Venture http://www.hotels.com
Capital Reporter website, 2006, http://www.venturecapitalreporter.com 14
Group RCI focus on Vacation Exchange & Vacation rental, http://www.grouprci.com

2. Real Estate companies, and new entrants in the products (including dogs allowance)22. Finally it
market that represent potential threats15. provide more space and amenities than generally
available in Hotel rooms23.
Key partnerships
In 2006, Homeaway has formed a partnership So why consumer would use Homeaway’s
with news and information USAToday in order website? Simply because vacationers can use the
to increase its traffic16 and create more visibility site to browse listings and user reviews, view
for properties owners17. pictures, and check pricing and availability. As
Brian Sharples underline it, "We want to make it
Hence, consumers can access to Homeaway as easy as booking a hotel room", and "We
throught USAToday (via the adress invested pretty heavily in staff and technology to
http://usatoday.homeaway.com). But according scrutinize the listings".
to the currently Homeaway’s homepage design,
this page looks outdated. Moreover, neither Moreover a more detailled attention much
advertising nor announcement still stands for describe whom the company targets. A March
any partnership. 2009 snapshot of HomeAway Unique Visitor
ranking let appear that there is a total of 831,734
More recently, another known partnership of the unique visitors24, increasing of 11,6% from the
company is the ‘The HomeAway.com Credit month before and 60,6% comparing to last
Card Acceptance Program’ developped by year’s same period25.
Payment Processing, Inc.18 allowing Properties
Owners to accept credit card payements such as A February 2009’s Audience Makeup shows
bookings and deposits fees. In order to fully that there was 583,800 people who viewed
implement this service, Homeaway develops its 15,3M of HomeAway website pages. Moreover,
own tools allowing owners to manage 55% are female, 35% are 50= (29% are 35-49,
reservation and payement processes easily. That and 24% are 18-34), 91% pf visitors are
is, rentors can access to these services via caucasians, 66% has no kids between 0-17 years
HomeAway Connect website19. old, 35% earn more than $100K, and 17% went
to graduate school when 43% went to college.
According to a constantly growing expansion,
mainly by acquisition Homeaway did not let Finally visitors also use bookit.com, books
appear any further partnerships. lodging at bedandbreakfast.com, and consults
travelpost.com26.
Why would a consumer use the
system? Why would a supplier allow its
Consumer who is seeking value will find it in inventory to be sold over this system?
the vacation rentals20. Homeaway highlights first The business model of Homeaway defines
factor of choice, as rental prices are often suppliers as Rent-by-Owners as well as
cheaper than staying in a hotel21. But vacation Properties Managers. Thus, the first factor that
rentals are also based on a privacy approach, and would conduct these suppliers to use
it is definitely a familly & groups oriented Homeaway’s website is first of all because
renting can bring extra money27.
15
HomeAway: A Find in Online Vacation Rentals, Spencer E. Ante, 2009,
http://www.businessweek.com
16 22
Business Wire Why Vacation Rentals?, Homeaway, HomeAway.com website, 2009,
17
HomeAway.com selected by USATODAY.com to Power its Online Vacation Rental http://www.homeaway.com
23
Classifieds, Press Releases, HomeAway website, 2006, http://www.homeaway.com Why would I choose a vacation rental home over a hotel?, Online Press Kit,
18
Credit Card Acceptance Program in partnership with Homeaway.com, Payment HomeAway, HomeAway website, 2009, http://www.homeaway.com
24
Processing Inc., https://www.paypros.com The Unique Visitors metric only counts a person once no matter how many times they
19
HomeAway Connect services & tools, Homeaway Connect, Homeaway Connect visit a site in a given month
25
website, http://www.homeawayconnect.com HomeAway site analytics, 2009, http://siteanalytics.compete.com
20 26
HomeAway: A Find in Online Vacation Rentals, Spencer E. Ante, Business Week February 2009’s HomeAway quantscast, 2009, http://www.quantcast.com
27
website, 2009, http://www.businessweek.com HomeAway: A Find in Online Vacation Rentals, Spencer E. Ante, 2009,
21 Some companies (like Wal-Mart) thrive despite recession, USAToday, USAToday website, 2008, http://www.usatoday.com http://www.businessweek.com

3. Homeaway average rental price is $236 per With its last fund raising, the company had
night28, while homeowners pay $275 annually to strengthed its business, mainly by retiring its
list their property for a whole year. remaining debt. Brian Sharples announce that it
will also be used to companies acquisition, melt
Therefore, in order to sold their inventory the down the company strategy (by hiring Mike
company use different chanels: First Homeaway Butler, the former chief marketing officer of T-
is able to brings travelers through nearly Mobile USA (DT), or launching advertising
200,000 search terms on main Search Engines. campaign with Publicis). The challenge is pretty
More than tjis, every month 1.3 million travelers clear "We want to have a $10 billion market
worldwide receive the Homeaway Traveler capitalization in five years"32.
Newsletter. Then, the company is regularly
highlighted in the press (475 publications Recently, a company investor declared that this
including USA Today, National Geographic funding is "A statement of 'game over' for
Traveler, New York Times, Wall Street Journal, competitors"33. And from a structural point of
Money, and Travel & Leisure since 2006)29. view Homeaway planed to geographical expand
in Asia and South America34.
Methods of Operation
Homeaway does not distribute products. The As Douglas Quimby, senior director of research
platform provides a service in order to connect for PhoCus Wright said, "It's an unbranded
Renters with Owners and Property Managers, world, the biggest challenge Homeaway have to
throught its distribution channels (competitors overcome is in safeguarding its customer
and companies that she bought). In these experience"35.
processes no outsourcing appears. But according
to its recent partnership with Payment
Processing Inc. in order to develop financial
services to its customers30, some outsourcing
aspects could evolve in the coming years.
More, as well as other Online selling platforms
such as eBay or Amazon.com who operated on
similar fragmented markets, the company fulfills
its customer’s proposition by providing a “Make
it easy” and “Self catering reservations”
system31. Comparing to its traditional street
competitors, being an online company give to
Homeaway the opportunity to reduce its
structural costs, to make its visibility constantly
growing and increase its reactivity to the market
variation, mostly throught its 12 (inter)national
websites.
Key Strategic direction
32
HomeAway: A Find in Online Vacation Rentals, Spencer E. Ante, Business Week
website, 2009, http://www.businessweek.com
28 33
Aren't vacation rentals all luxury properties and expensive to rent?, Online Press Kit, Venture Investors Bet $250 Million On Vacation‐Rental Site HomeAway , Ted
HomeAway, HomeAway website, 2009, http://www.homeaway.com McMahan, Wall Street Journal, 2008, WSJ.com
29 34
The HomeAway Network, HomeAway.com website, 2009, Some companies (like Wal-Mart) thrive despite recession, Updated 12/5/2008,
http://www.homeaway.com http://www.usatoday.com
30 35
Credit Card Acceptance Program in partnership with Homeaway.com, Payment HomeAway: A Find in Online Vacation Rentals, Spencer E. Ante, Business Week
Processing Inc., https://www.paypros.com website, 2009, http://www.businessweek.com
31
HomeAway: A Find in Online Vacation Rentals, Spencer E. Ante, Business Week
website, 2009, http://www.businessweek.com