In yesterday’s meeting with investors, Expedia took time to provide an update on activities related to their recent purchase of HomeAway. Expedia CFO Mark Okerstrom described the growth opportunities for HomeAway in two pieces, secondary homes and primary homes in urban markets.
Okerstrom also laid out a two phase plan to increase revenue for HomeAway which included 1) take what HomeAway already has, turn it to be 100% online, and better monetize transactions, and 2) leverage opportunities in the urban market.
“The traveler fee has been launched in the US, early. Encouraging signs. We like what we see,” said Okerstrom.
“We have really tilted the focus of this business from being a very supplier-focused business focusing on one side of the platform, focusing on getting subscription renewals – the right thing to do at the time – to really a two-sided platform, taking this formula (that Dara described to you) of bringing online marketing, world-leading conversion platforms, utilizing test-and-learn technology and supplier facing technology and turning it into a real online business”
Okerstrom added, “We’ve taken some of the money that we’ve seen incremental from the traveler fee, and we’ve started to put that back into the business. The introduction of a ‘Book with Confidence Guarantee’ essentially says, ‘Traveler, if you book on the HomeAway platform, and you don’t like the property or you have a dispute with the owners about the damage deposit, we will take care of it for you.”
“This is a difficult transition that we are pulling off, but we are opportunistic about what we’ve seen so far.”
During the Q&A, Expedia admitted that they had seen a “tick down in conversion rates” on HomeAway.
“It is so early, and the teams are still testing various combinations of subscription rates and traveler fees, so it is too early to give a take rate. We have seen a tick down in conversion rates as you actually might expect, nothing out of the ordinary, entirely expected.”
“We feel good about what we see,” he restated.
Expedia Inc. CEO Khosrowshahi reiterated that Expedia believes it can build HomeAway into a business with $350 million in earnings before interest, taxes, depreciation and amortization (EBITDA) by 2018, up from about $120 million last year.
We have built a website that allows owners to add their home with no service fee, no one time fee or booking charges, no hidden charges at all. We do offer upgrades to owner’s, but these are only if they would like even more benefits from our website.
Take a look at all the Florida Villas we have at https://villaagogo.com/ . Every Florida Villa is available to view here: https://villaagogo.com/florida-villas/
We also have a great guide for anyone visiting Florida, https://villaagogo.com/guide/
Because of the new fee, we are trying other options and hope to leave HomeAway in the next year or two. We opened a new account with Tripadvisors VHR which basically matches the old VRBO and half of our rentals since then have come from our new VHR add. The resort that we own in has approximately 250 owners of which 100 actively participate on our Facebook page. VHR seems to be the consensus choice right for the owners who are looking at options that are more friendly than Expedia and VRBO. We will also look closely at Booking.com. Airbnb does not fit our needs right now but we will keep an eye on them. With a few small changes, they would be a great fit for us.
As hard working owners, my husband and I built our little rental cottage on our property with our bare hands – got county approved and paid very high fees to county and yearly subscription fees to VRBO worked extremly hard at our 68 5 Star reviews-we did this so we could afford to send our son to college and for the last 3 years we have done well-until this last 3 months with all the changes our phone and contacts are dead-our few loyal returning guests are shocked by the added fees, and believe it or not, the county wants to tax the new service fees and our cleaning fees as well. We dare not raise our rates-VRBO and Homeaway will fail, but because we understand hard work we will not-its just a shame.
My In the words of MySpaces long forgotten CEO – Oh shit, where did everybody go….
Im just not understanding this whole disagreement with vrbo at all. After 20 years of using VRBO, a homeowner still doesnt have a website that draws its own traffic, others feel like theyre being played, a successful listing site that draws a lot of traffic is canceled because the owner cant figure out how to promote online.
Renting properties short term is becoming more of an online business, which running a vacation home will require more skill on how to do. That is the problem. Sooner or later, owners and managers will have to realize the days of easy money eventually turns into a bubble and the real players are the ones who remain which will be those who have used listing sites like vrbo for a few years until they can be completely independent. Vrbo has been an awesome partner. They allow me to run my own business the way I like. They have never interfered with trying to control my taxes, my leads, my phone numbers or any refunds. The problem that everyone has bought into was accepting such a horrible website like airbnb which, thanks to them has had vrbo change its tune. Unless owners disengage with airbnb, these changes will continue to happen. The boys at airbnb have created putting the guests first like Sam Walton did with his customers at Walmart. And I know I don’t have to explain how vendors were put into the grinder for Walmart.
Putting the customer first works until the customer takes advantage and wants an excuse for a last minute cancellation, have parties and ruin homes. If owners disengage from a leading website, it will only be more challenging to attract traffic, emails, phone numbers etc. that can grow your following organically. The new fee allows the guests to cancel at the last minute or get a refund if they dont like your place even after countless professional photos and details. This move comes from sites like airbnb which owners and guests have all approved. As long as vrbo doesnt keep the guest phone number and email from me prior to booking, who cares. I am now accepting an alternative payment plan PLUS coming out a hero to help my guests save money on fees. Wow. What a concept. With this I’m growing my following, accepting payments, sending monthly newsletters, drawing traffic to my website and receiving texts from returning guests who have thanked me for the heads up. I’m still an online marketer with a successful online business.
Please – do me a favor and remove your listing from vrbo if you want. That will just leave me with less competition to grab the traveler, become a hero and create loyalty with them by staying in touch with them.
I too did NOT RENEW my subscription with VRBO in February for 1299. Expedia needs to remember that their product that they are selling is actually owned by individual property owners. After ten years as a subscriber to VRBO enough is enough. The changes have not only impacted both the renters and owners financially, it has also put a barrier between the relationship with the renters and the owner. I have rented my oceanfront property for twenty six years and HIGHLY value the relationship that is built with each renter. I am very dissatisfied with the new policies, and would NOT RECOMMEND Expedia VRBO to either property owners or as a former VRBO renter. Shame on you
If you are looking to advertise your Orlando vacation rental without any service fee and just 150 per year please consider our website. We have over 600 Florida vacation rentals already and receive around 50,000 visitors per month – http://www.vr360homes.com. See what current owners are saying about our site and the results it produces here – http://www.vr360homes.com/Advertise-Florida-Villa.aspx
I encourage vacation rental owners to be proactive and develop your own credit card system with a vendor. Bypass the Homeaway-initiated service fee with your guests. This is your property that you own. The guests stay in your property, not Homeaways property. As vacation rental homeowners, we have options. We also have objectives such as sales and profit targets, just like Homeaway.
I completely agree. Those who see this as a negative are not looking at their business from their own perspective but someone elses. This has been a huge win for me because now that I have another way to offer how people can pay, Im also coming out like the hero. Ive been working on my own mailing list since I started – a year ago – and so far Ive already received guests returning.
It amazes me how vacation rental owners dont take advantage of improving their own businesses and instead rely so heavily on these listing sites. Who cares how they are working. As long as they share the information on people inquiring about my property, I could care less about how they make their money.
I totally agree in full with all your points
Homeaway-VRBO management, for the past decade, knew little about the vacation rental business. They succeeded by using borrowed money to acquire vacation rental websites, not by actual organic growth.
Now the new owners, Expedia management, appears to know even less about the vacation rental industry than Homeaway did.
Feb. 18th 2016 – the date that homeaway has begun the transition to GoneAway; as I; along with many countless others will not renew – or use any site related to Expedia again!
I was in the process of booking a home – had negotiated the rental in good faith – and was the blindsided by a 499 USD service fee the day that the new fee went into effect. This caused so much confusion and anger that between myself and the owner that we could not agree and the reservation fell through. Expedia, Vrbo, HomeAway – you are on my permanent scheisse list. Never ever Ever will I do business with you or any of your subentities again.
As an owner advertising on VRBO, I used to send people to my listing when I met them offline or on Facebook and they asked where they could learn about our house, because all the information was there in one spot and the VRBO website was well-known and easy to find. And I paid a healthy sum to advertise there, so why not take advantage? Now, obviously, I’m not going to do that anymore and risk having potential guests dinged for the traveler fee. I may still leave my listing there, but I have no interest in helping HomeAway collect its fees.
Such a shame to ruin a well-loved and trusted company – VRBO. I am taking care now not to book anything that is remotely related to Expedia. I am gobsmacked by their greed and heavy handedness towards owners and guests alike.
As a guest I have already moved on to Villas and Homeescape
after listing 2 properties with VRBOHomeaway for the past 15 years, its time to say goodbye. one of my listings expires next week, and the other one expires in a few months. I do not trust VRBOHA anymore. they have been boiling us frogs slowly in their pot of greed for months now and I was too dumb to notice. Now I am faced with the choice of just selling the houses and getting out altogether, or possibly looking into long-term rentals which means i wont get to enjoy going to our house with my family. thanks for NOTHING VRBO HA. you are the worst
I have been an extremely loyal Homeaway customer for 8 years, but will not be renewing my subscription when it expires next week. My million-dollar plus vacation home on the beach is not a commodity that can be booked without an open email conversation with my prospective guests — I have too much to lose. HA now punishes owners who do not like to use its expensive and buggy payment platform by hiding us at the bottom of the listings.
Further, HA displays punitive and false comments like
This owner accepts fewer than average inquiries
if the owner does not use the HA payment platform
To book this property, you need to complete your booking through checkout on the HomeAway website. We can’t protect your payment if we don’t know you’ve booked through us
The latter casts doubt in the mind of the traveler about working with me directly, despite my long record of excellent reviews from many travelers.
I have lost all trust and faith in HA and will no longer do business with them as either an owner or a traveler.
amen. i feel the same way.
The guests belong to us, the owners, you guys are just rental brokers and a greedy one. The Internet discussion forums enable us, the owners to get organized, find alternative where your proven tactics – buy all rivals – will not work. The sharing economy changes the rules of the game. Remember the date February 2016 is the start of the decline of the gigantic rental brokers.
I renewed my subscription in September of 2015 with no inclination whatsoever to believe what I had paid thousands for would drastically change with little or no warning. I have advertised with VRBO and HomeAway for more than 16 years. I am appalled not only at the extent of their greed, but also their total disregard for the potential effect on the property owners as well as the traveler.
VRBO and HomeAway have lost my trust and I will not renew my advertising on either site. I won’t do business with a company whose leadership finds it acceptable to pull this kind of stunt on their faithful client base. This company is clearly greed-oriented and I have no doubt they anticipated this type of backlash. Considering the huge profits to be made overnight by taking an additional 9 percent from transactions, the potential loss of several thousand angry property owners was not given a second thought. The move was unethical and I predict the company will fail within the next year.
Renters nor owners are fools. Stop trying to play us, you just want money and it’s SO easy to see. Nobody wants to be your customer anymore, renters or owners. And you own NOTHING. The jokes gonna be on you. Fools.
“we are opportunistic” Opportunistic: exploiting opportunities with little regard to principle or consequences. Exactly.
How are all those lawsuits from owners and the big class action suits being filed over your takeover of what USED to be the #1 by owner rental site working out for you
Expedia will lose what made HA-VRBO great…..the owners. The heavy handed, sneaky way this fee was rolled out is unbelievable. Many owners no longer trust the company. Many are not renewing. The unique, well cared for properties will be leaving and in its place will be property managers who care nothing about the inventory. Thanks Brian for ruining a once great, very unique company. Enjoy the ride boys, it’s going to be bumpy.
Well said Mary. I for one am disgusted on this transition of VRBO to Homeaway to Expedia. Each new transition has added additional fees and mores requirements with a complete disregard to the people for owners, VRs and guests. Look at the Book Now feature. They claimed guests wanted to be able immediately book a home they find. Most of my guests want to search around, allow family members to give input and then negotiate a price. Book Now was merely the first step in implementing the Travler Fee. Careful Homeaway or your greed may sink you.
Now children, all those big words dont fool anybody. Pull your big boy pants up and say the truth ….we NEED more money …and we can just suck it out of our customers guests, they will hardly notice.
Well they have noticed, and more and more are noticing. And your customers are going to stop using the Expedia brand. Period. Flights, hotel bookings . Spin that to the shareholders.