Vacation rental giant HomeAway has added a new revenue stream almost in the blink of an eye with the launch of a holiday home sales business.
The company today launched HomeAwayRealEstate.com, a portal for holiday home owners to also put their properties on the market to a potentially wide and willing audience.
The site is aimed at the North American and Caribbean marketplace initially, but is expected to be rolled out to other HomeAway territories (primarily Europe at the moment) in due course.
HomeAway will use a similar subscription model to its existing business – charging owners a fee to list their property on the service – rather than develop a new commission system based on sales.
CEO Brian Sharples is unwilling to say how much the marketplace is worth, except that “there is a global market for vacation home sales that is substantial”.
Understandably the company will utilise the rental end of the business to expose property owners and consumers to the new division.
A property’s rental history will also be displayed within any listing so prospective owners can size up prospective income from putting the property back on the rental market.
Sharples adds:
“We believe that these two businesses are closely related, as approximately 25% of new vacation home buyers will rent immediately, and approximately 10-15% of existing rental owners are looking to sell their properties at any point in time.”
The HomeAway boss recently responded to comments from Expedia CEO Dara Khosrowshahi regarding the future ownership of the business.
Sharples said there are no plans to put the company in public ownership despite Khosrowshahi claiming otherwise during a conference speech in February 2010.
The only problem with HA listing the rental history is that it is likely to be incomplete and therefore misleading to a potential buyer as it won’t tell the full rental story.
Most VR owners advertise on multiple portals and have repeat customers that won’t come through the internet at all. The Homeaway group of web sites accounts for about only 60% of our properties’ rentals. The other 40% comes from other VR sites, direct contact via our web site, and repeat renters or referrals from renters (who contact us directly).
It is certainly an interesting idea and one that we have and will continue to consider as we come from a property background. One of the challenges that they may face is cross border legal jurisdictions – In particular what constitutes acting as an agent – For example in the UK (see Tesco) it is easy to become liable as an agents for displaying properties without HIP’s, propery misdescription etc which obviously is not the business model
Overall though I think a good and positive move it will be interesting to see post recession if the model has long term legs and growth potential
In general this is a welcome move by a strong industry player. There is not doubt that holiday homes are a smarter way of generating yield from an investment perspective, and many vacation rental owners world over are recognizing that. Not to mention the sheer charm of owning a lovely holiday property along the shore or by an evergreen mountain valley. Its encouraging to see the holiday lettings market develop in the UK, where we are emphasizing safe lettings at our firm through extensive owner checks prior to listings and accepting bookings. RatedApartments.com is now looking to help holiday home owners across the UK to list holiday cottages and villas, in addition to our staple product – holiday apartments.