Across North America and
HomeAway.com and its sister Web sites in
Currently HomeAway does not handle bookings for the home rentals featured on its Web sites, but it does provide a high-quality site that allows a variety of users to find a vacation home rental in an area of their choice and within their budget. My own analysis is that if the company has 500,000 home rentals that are paying an average of $300 per year for Web site listings, this company is potentially on an annual revenue run rate of $150 million dollars. Not bad for a five year old company that’s part of the fourth-generation dot-com industry.
Recently I interviewed Brian Sharples, CEO and co-founder of HomeAway. He provided some valuable insight on why the vacation home rental market is doing so well and how his company is taking advantage of it.
Sharples said vacationers are looking for value in their experience. According to Sharples, “Families especially find value in vacation home rentals. There is no need to rent several hotel rooms for a family, most vacation homes allow a family to have plenty of room, eat as many meals as they wish in their home away from home, and don’t have extra charges often found in hotels.”
In today’s economy, vacation home rentals clearly appeal to value conscious vacationers.
One vacation rental I viewed on HomeAway is typical of the kinds of homes one can find on its Web sites. It is a two-bedroom, one-bath cottage that sleeps 6 in
Sharples says a vacation home in a high-demand area can bring in $20,000 per year. The cost of the $300 advertisement on HomeAway’s Web sites has a very steep return on investment, so it is easy to understand how HomeAway’s organic growth has been so high. Sharples believes his company with the largest single vacation home web presence has approximately 10 percent of available homes in North America and
Interestingly, HomeAway is planning to have an advertisement spot running on this year’s NFL Super Bowl game, on February 7, 2010. Sharples and his team have been researching this idea for a year and believe they have to be one of the top four or five “remembered” ads of the game to really do well with the advertising expense. The company has picked the theme of the 1980s cult movie series Vacation (staring
Stressed-out businesspeople (like me) who need a vacation in a pretty place consider vacation home rental an attractive route to getting away. For business travel, we stay in business class hotels — so those are one of the last kinds of place we want to stay when on vacation. HomeAway is a company that seems to be in the right market at the right time, appealing to the shifting needs of vacation travelers and property owners — and they stand to see even greater success if they can grow the right way.
If you do watch the Super Bowl and see the HomeAway ad in the third quarter, let me know if you think of this company’s strategy to to educate both vacation consumers and vacation propery homeowners worked!