Expedia, the world’s largest online travel agency (OTA), agreed to buy vacation rental site HomeAway for about USD $3.9 billion in cash and stock. It is the largest acquisition in their history.
At the moment, HomeAway operates off a paid listing business model, with 44% of all transactions still being made offline.
However, Expedia is moving the company towards a more sustainable business model which includes instant online bookings.
HomeAway will create a fee for travelers who book through the site, so that they can lower commissions and fees to accommodation providers.
Expedia want a slice of the pie. Accommodation using the ‘sharing economy’ model has been increasing in popularity over recent years, and Expedia want their share of the USD $100 billion market.
It’s clear that with Expedia’s financial backing, HomeAway could be a formidable opponent to Airbnb.
While Expedia’s current customer base is almost entirely urban markets, HomeAway’s strength lies in beach and ski rentals, often in faraway areas, this way HomeAway completes Expedia’s inventory
Expedia is now able to reach all those travelers who prefer to rent vacation homes.
Essentially it means that there’s an alternative to Airbnb for instant online bookings in the vacation rental space, and it also means that Expedia continues to rule the OTA space, so small accommodation providers can benefit from Expedia’s massive customer base by partnering with the giant to increase bookings.
