Up, Up and Away!
Expedia just finished clicking its ruby slippers together three times chanting ‘There’s no place like HomeAway’ and lo and behold after shelling out $3.9 billion, HomeAway now belongs to Expedia! The Expedia and HomeAway combination is a natural match for the two companies. Expedia books flights, car rentals, and hotels for its customers – why not expand the hotel bookings to vacation homes. Congruently, HomeAway offers vacation home listings – why not allow for booking vacation homes, and in addition how about booking a flight or car rental with that order. Thus one plus one equals three in this merger, which explains why investors are cheering the acquirer’s stock up as well.
How can this merger affect individual owners who have their vacation homes listed on HomeAway? The deal could benefit vacation home owners by creating significantly larger demand for their business. The first thing to note is that a vacation home may be very different from a hotel. Some owners offer the exclusive use of their entire home. This may be a large house which could hold up to 8-10 people. Homeowners also have a whole different set of restrictions or allowances compared to hotels, for example with regards to the number of people that can stay in the home. Basically this allows people booking their vacations to have many more options than simply a hotel. There will be a host of various types of living spaces that Expedia users will likely be able to choose from, from the trusted website.
Will AirBnb competition pick up? AirBnb has no doubt been eating to Expedia’s hotel booking business. Consumers may book flights with Expedia but then find cheaper or more suitable living spaces with AirBnb. There was very little overlap between hotels and people’s residences – until now. Vacation homes can be a little different than AirBnb in terms of exclusivity and tailoring homes to a niche audience, but there is certainly some overlap between the two competitors as Expedia fights back against AirBnb to claim a larger portion of its ‘hotel’ bookings revenue.