Travel booking giant Expedia has announced an agreement to acquire HomeAway, adding vacation rentals to its portfolio of accommodation options.
Expedia, Inc., (NASDAQ: EXPE) will acquire HomeAway, Inc., (NASDAQ: AWAY) and all of its brands for an equity value of approximately $3.9bn in cash and Expedia common stock, the companies announced Nov. 4.
The Boards of Directors of both companies unanimously approved the transaction, which is still subject to closing conditions including regulatory approvals and the tender of a majority of the outstanding shares of HomeAway common stock. The companies expect the transaction to close in the 1Q16.
HomeAway’s brands include 19 international HomeAway sites, VRBO.com (Vacation Rentals By Owner), VacationRentals.com and about a dozen others.
The transaction will give Expedia an entrée to the so-called “alternative accommodations” space, which is estimated at $100bn in revenue annually.
"With our expertise in powering global transactional platforms and our industry-leading technology capabilities, we look forward to partnering with [HomeAway] to accelerate their shift from a classified marketplace to an online, transactional model to create even better experiences for HomeAway's global traveler audience,” Dara Khosrowshahi, Expedia’s CEO, said in a statement announcing the transaction.
HomeAway participants own and manage 1.2 million properties around the world.
"We could not be more excited about joining the Expedia family of leading travel brands and what this move means for our very bright future," said Brian Sharples, Chief Executive Officer of HomeAway, Inc., noting that the company has been moving toward a fully online bookable marketplace and closer to the type of transactional business model with which Expedia has tremendous experience.
"We're eager to benefit from Expedia's distribution, technology and expertise, which will allow us to provide an even better product and service experience for our owners, property managers and travelers,” Sharples continued. “In this way, I believe our combination with Expedia will turbocharge our growth and industry leadership for many years to come."
Expedia has built a travel empire with a market value of nearly $18bn, in part from buying other booking sites. Expedia is parent company for a broad range of travel brands including Orbitz, Travelocity, Hotels.com, Hotwire.com, trivago, European hotel reservation specialist Venere.com and CarRentals.com, among others.
However, on a conference call to discuss the transaction, Expedia officials said HomeAway would continue to be run almost autonomously from its current headquarters in Austin, Texas.
Vacation rentals have been growing in popularity and notoriety, thanks in part to the high profile of Airbnb. While their models are somewhat different, they are not identical. Neither are the property owners who list their properties or the people who rent them. Airbnb focuses on temporary accommodations, either in individuals’ homes or other properties they own while HomeAway, VRBO and other sites like Dwellable.com focus on vacation rentals.
In addition, Airbnb tends to attract a younger demographic of traveler as well as property owners who are offering accommodations on a peer-to-peer level. Some have opined that property owners who use HomeAway, VRBO and similar sites tend to be property professionals who list either for a living or quite a bit more frequently than Airbnb hosts.
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