Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



3 HomeAway Numbers You Shouldn't Miss

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Investors often read only the earnings headlines, but a ton of useful information can usually be gleaned from the related conference calls. For those interested in the online travel industry, HomeAway (UNKNOWN: AWAY.DL  ) provided some useful information on last week's earnings call on the developing marketplace for vacation rentals. The sector is starting to cross over into the traditional online travel industry with a pilot test with Expedia (NASDAQ: EXPE  ) , and the company is starting to face tough competition from TripAdvisor (NASDAQ: TRIP  ) .

With the vacation rental market starting to be integrated with the more traditional vacation planning marketplaces, enormous opportunity presents itself to the company that can grab the most listings to become the dominant market leader. One way to grab the most listings is to generate more bookings per listing than competitors, and the Expedia deal promises to help in that area. Three numbers provided in the earnings call shouldn't be missed by investors.

Signing up Expedia
The initial test of 12,000 properties on Expedia will add a new source of customers for vacation rentals that typically focus on hotels for vacation plans. The pilot is expected to launch early next year with properties throughout the U.S. and Mexico. With a successful test, the service could eventually be launched to include all of the 775,000 properties on the HomeAway sites.

Expedia offers access to several leading travel websites, including,, and Hotwire. The typical customer for these online travel sites doesn't consider using vacation rentals. With offering sites in more than 60 countries, the potential exists to expand this partnership beyond North America. The average HomeAway subscriber only gets 10 bookings per year with an average booking of approximately $1,300. The company has plenty of runway for increasing bookings on existing listings.

Bought 8,000 New Zealand listings
HomeAway announced that it bought a 55% stake in Bookabach to add 8,000 listings in New Zealand and around the region. The key to this relatively small purchase is adding more exposure to a rapidly expanding Asia Pacific market. In addition to the Bookabach website focused on New Zealand, it also provides access to Bookastay that offers vacation rentals in Australia.

The interesting number is the vast 8,000 listings from a relatively small country. New Zealand ranks considerably smaller than most developed nations with only 4.4 million residents as of 2012. It isn't even 2% of the population of the U.S. that reached 313.9 million in 2012.

Drop in ASPs
HomeAway was very honest that average selling prices, or ASPs, will decline going forward. The company has several valid reasons, but declining revenues per user or listing is typically a negative sign to investors of competitive threats. The third quarter ASP was $390, a 15.7% increase over the $337 from last year.

One of the prime reasons listed for the expected declining ASP in the fourth quarter is a geographic expansion to places that have lower rates. While this would be a valid reason for lower ASPs and ultimately lead to higher revenues, the biggest concern is the growing presence of TripAdvisor in the vacation rental space that could push down listing fees.

In the recent quarterly call, TripAdivsor noted reaching 500,000 vacation rental listings. More importantly, the company is focused on the pay-for-bookings plan over subscriptions. Interestingly, HomeAway recently launched the concept to attract new listings that were likely moving over to TripAdvisors site While the move could be good for property owners and managers, it might lead to lower fees for HomeAway.

Bottom line
The vacation rental space appears to be under-monetized currently with HomeAway only completing 10 bookings a year per listing. Not to mention that the vast listings of a small rental service in New Zealand suggests a much larger global opportunity. The company has made an interesting push into more mainstream listings of vacation rentals via the pilot test with Expedia. Success of this partnership could help increase bookings per listing and eventually the ASP. It could also help hold off the growing competitive threat of TripAdvisor.

More compelling ideas from Motley Fool
As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

Read/Post Comments (2) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 17, 2013, at 4:10 AM, Paroshep wrote:

    Interesting article but the global companies you mention have a lot of global competition that should be factored in as well.

    For instance the U.K. has several large competitors.


  • Report this Comment On November 17, 2013, at 3:05 PM, SimonWM wrote:

    Interesting report, but analysts seem to think this is purely taking a rental and plugging it into the hotel market using then same model.

    The comment: "HomeAway only completing 10 bookings a year per listing".

    On average a rental only gets 15 bookings per year anyway, so they have done very well indeed as most businesses have several channels.

    Book-online and removing owners contact with guests AND reducing the already tight margins to run a single home, means analysis based on early adopters is seriously flawed in established locations.

    Moving away from subscriptions to Book Now for any of these companies will only alienate their loyal customers and open up the market.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2726482, ~/Articles/ArticleHandler.aspx, 9/30/2016 6:20:27 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,308.15 164.70 0.91%
S&P 500 2,168.27 17.14 0.80%
NASD 5,312.00 42.85 0.81%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
AWAY.DL $0.00 Down +0.00 +0.00%
HomeAway CAPS Rating: ***
EXPE $116.72 Down -1.68 -1.42%
Expedia CAPS Rating: ***
TRIP $63.18 Up +0.18 +0.29%
TripAdvisor CAPS Rating: *****