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HomeAway’s Expanding Tie-Ups

Posted on Wednesday, Nov 26th 2014

According to a travel report published by Amadeus, the global travel industry is expected to grow 5.4% a year through the ten year period from 2013 to 2023, faster than the global GDP. Travel growth is attributed to emerging markets of China and India as more travelers from Asia continue to take international trips.

HomeAway’s Financials
HomeAway (Nasdaq: AWAY) third quarter revenues grew 30% over the year to $117.11 million, ahead of the Street’s estimates of $115.94 million. EPS of $0.20 was also ahead of the market’s expectations of $0.16 for the quarter.

Revenue growth was attributed to increase in average revenue per listing driven by the newly launched tiered pricing and bundled product offerings. During the quarter, listing revenues grew 27.2% to $96.6 million and other revenues improved 44.2% to $20.5 million. Growth in other revenues was due to the increased adoption of value-added owner, manager, and traveler products.

Among other metrics, paid listings improved 34% to over 1 million and they ended the quarter with over 715,990 subscription listings and nearly 320,000 performance-based listings. Average revenue per subscription listing improved 12% to $479. Renewal rate was flat for the year at 71.7%, but fell marginally from previous quarter’s 72.8%. HomeAway saw site visits improve 17% to 232.1 million.

For the current quarter, HomeAway expects revenues of $107 million-$109 million compared with the Street’s forecast of $112.14 million. HomeAway expects to end the year with revenues of $444 million-$446 million.

HomeAway Enters into Agreements
HomeAway is driving growth through several strategic tie-ups with other business offerings. Earlier this month, they announced integration with Uber, Instacart, and Gogobot to help develop the short-term rental marketplace. The move will enable HomeAway’s users use their apps and find transportation through Uber, buy groceries through Instacart, and plan local activities and choose restaurants based on reviews at Gogobot. The integration with Uber will initially begin in the US before expanding to the more than 200 countries that Uber operates in. They will also be able to leverage the more than 60,000 destinations in Gogobot’s reviews and guides by integrating them into their app and websites.

In September this year, HomeAway also expanded their agreement with Expedia that will enable Expedia to list more than 115,000 properties from HomeAway on the Expedia platform. HomeAway had initially entered into an agreement with Expedia last year when they enabled listing of a comparatively modest 10,000 properties. With the recent deal expansion, vacation rental managers and owners using HomeAway’s pay-per-booking listing model will also be able to choose to advertise their properties on HomeAway plans to open this option for subscription-based listing owners in the future.

As part of the expansion of their mobile offerings, HomeAway released the HomeAway Mobile Hospitality Manager. The new solution will let the owner communicate essentials about their property to travelers. Property owners will be able to customize property information from within their HomeAway account through the Mobile Hospitality dashboard and will help them provide information such as directions to the property, check-in/check-out times, house rules, and curated guidebooks. The app is expected to help property owners create a personalized experience for their customers.

HomeAway’s stock is trading at $30.66 with a market capitalization of $2.9 billion. It touched a 52-week high of $48.90 in February this year.

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