Home Away’s Expanding Offerings

According to market reports, over the past few years, growth within the vacation rentals industry in the U.S. has outpaced growth of the hotel industry in the country. Studies conducted by the Vacation Rental Managers Association revealed that from August 2011 through August 2012, the vacation rental bookings market grew 30% compared with 3% growth within the hotel industry in the similar period. PhocusWright estimates the U.S. vacation rental industry was worth $85 billion last year, and it expects the market to continue to grow.

HomeAway’s Financials
HomeAway (Nasdaq:AWAY) is expanding its product and market reach to cater to this growing demand. Q1 performance already saw strong growth, with revenues for the quarter up 24% over the year to $79.5 million, ahead of the Street’s projections of $78.64 million. EPS of $0.14 reported significant 56% growth over previous year’s $0.09 and was in line with market projections.

By segment, listing revenues grew 24% to $66.8 million, and other revenues, which includes ancillary revenue from owners and travelers, advertising, software and others, grew 25% to $12.6 million.

Among key operating metrics, paid listings grew 6% to end the quarter with nearly 742,300 listings. Average revenue per listing during the period increased 14% to $368. Renewal rate fell from 77% a year ago and 73.8% a quarter ago to 73.6%. Overall visits to the site grew 30% to 207.1 million.

For the current quarter, Home Away projects revenues of $85 million-$86 million with an adjusted EBITDA of $22.5 million-$23 million. It expects to end the year with revenues of $338 million-$341 million and an adjusted EBITDA of $97.5 million-$100 million.

Home Away’s Product Expansion
Home Away finally rolled out their payments and online booking platform to 3 of their European properties by the end of the previous year. They are pleased with the traction they are seeing in the product. They plan to continue to add the online booking features to more regions during the course of the year.

As part of their product expansion, Home Away also recently began development of their pay-per-booking (PPB) product. The new product is expected to be available later this year and will enable rental owners listing their properties to list for free and pay Away nearly 8-10% of each reservation as booking fee instead. Their existing product expects rental owners to pay a subscription instead. PPB will be launched in beta mode first for the U.S. owners by the end of the third quarter this year. It will be launched to other segments during the subsequent quarters.

Home Away’s International Growth
As part of their market expansion, Home Away also launched their services through HomeAway.es in Spain. The website will give its Spanish customers access to more than 470,000 listings and will include other features like ReservationManager to manage reservation-related queries, quotes and a calendar, the ability to respond to guest reviews from a central dashboard, a Facebook slideshow and the ability to embed calendar and property reviews on the home owner’s personal website.

Recently, they also announced a tie up with travelmob, a social stay marketplace. Travelmob helps owners of vacation rental properties connect with rental accommodation seeking travelers across Asia Pacific.

The market is pleased with HomeAway’s performance and the stock is trading at $29.46 with a market capitalization of $2.50 billion. It touched a high of $34.30 in April 2013.