CanadaStays HomeAway
2 years ago
 

HomeAway invests in CanadaStays, fighting Airbnb on northern front

HomeAway, the vacation rental giant, said that it had led a C$6 million round of fundraising for CanadaStays, a holiday home platform in Toronto.

The 30-employee startup claims to generate vastly more inventory than any other holiday rental platform in Canada, including foreign interlopers, such as Airbnb, FlipKey, and HomeAway.ca itself. [CORRECTED 10 ET: I originally said “more transactions.” Sorry.]

It says it has 30,000 properties in Canada, and 15,000 in the United States, the Caribbean, and Latin America.

HomeAway’s minority stakeholding comes with a cross-listing deal. Property owners listing on CanadaStays will also appear for free on HomeAway.ca. To be listed on HomeAway.com and VRBO, they have to bundle (therefore, pay) to be listed on HomeAway.com and VRBO.

Torstar, publisher of The Toronto Star and other media properties, also participated in the round. Talks have begun for marketing partnerships.

The deal is a milestone for Rogers Venture Partners, the venture capital firm that helped to incubate the startup. It is the investment arm of Canadian telecom titan Rogers.

Today’s announcement is also a milestone for Toronto investment firm Hedgewood, another early investor.

Strategic move

The investment suggests that HomeAway is launching a northern front in its market share war against Airbnb, the San Francisco-based peer-to-peer short-term rental platform.

Last October, Airbnb opened its first Canadian office, hiring a country manager and two other employees in Toronto.

Airbnb’s sweet spot has been for short-term rentals in cities, while HomeAway’s sweet spot has been second homes at resort areas.

But there is some overlap. HomeAway says 12% of its listings overlap with Airbnb’s, and that duplication is increasing.

For instance, last year it saw a double-digit percentage increase in demand for Montreal, which is a major hub for Airbnb.

Airbnb would like to diversify its portfolio of properties to go beyond cities, where it competes against hotels, to include resort areas, where hotels are less common.

This matters particularly in Canada, where the geographic dispersal of vacation rentals favors properties in the countryside, especially along lakes and on islands.

Likewise HomeAway would like to outflank Airbnb, while bolstering its own core market in owner-owned rentals. Its Canadian investment extends the company’s growth through a series of marketing agreements, investments, and acquisitions globally.

Long road

Seven years ago, CanadaStays was founded by Mark Bordo.

Prior to that, he had worked at VerticalScope, a collection of more than 400 user-generated content sites in consumer verticals.

Over about five years, Bordo became a star employee at VerticalScope, rising from account manager to director.

After leaving VerticalScope he started his own company and founded a home improvement contractor directory site that was eventually sold to Rogers.

Bordo went to launch his startup, originally called CottageCountry. Rogers gave him office space and mentoring.

About 18 months in, Bordo had a meeting with VentureScope’s founder, Jesse Rasch, over a coffee and an orange juice. Rausch used his Hedgewood firm to invest in Bordo’s idea, originally called, CottageCountry.

Last October, the company renamed itself CanadaStays, for clearer branding.

Unlike most other vacation rental sites, CanadaStays emphasizes a multi-platform approach, borrowing a page from the VentureScope playbook.

As Tnooz reported last November, CanadaStays has grown through white-label listings on other portals.

The startup reposts all of its listings on third-party content sites, such as Travel Alerts (one of Canada’s top travel deal sites), Cottage Life (the country’s largest cottage magazine), Canoe.ca (an enthusiast site that claims millions of unique visitors), and World Fishing Network (the site of a cable TV channel).

CanadaStays, like VerticalScope, is also an aggressive user of search engine optimization. The switch to the name CanadaStays, and the website re-directs from intuitively named Web addresses like holidayrentals.ca, are said to generate a lot of organic search traffic.

Demand was slower to build. In its first five years, the startup solicited owners by calling them.

CanadaStays

Misunderstood Canada

International travel brands of all types have generally been slow to make inroads into the Canadian market, which has some quirks that outsiders miss or ignore.

Some American rental incumbents have presumed incorrectly that Canada is just an extension of the States. Yet they find that their tactics don’t work as well north of the border. (It’s a problem beyond the travel industry; see US supermarket chain Target’s recent pullout from the country.)

CanadaStays COO Emily Rayson says, “Canadians typically like to work with fellow Canadians.”

What’s more, the large French-speaking community is generally a missed opportunity for the display and targeted digital advertising campaigns of English-first Americans.

In another key trait, Canada’s population of property owners is also more geographically dispersed than is the case in the United States and many major European countries.

Besides portal- and partner-based cross-marketing, CanadaStays has relied on promotions, such as a recent contest that has run in national clothing retailer Roots. Up until now it’s marketing budget has been barely been six figures in any given year.

Thanks to the new deal, it will be about that much each month.

EARLIER:

Share on FacebookTweet about this on TwitterShare on LinkedInEmail to someone
 
 
Sean O'Neill

About the Writer :: Sean O'Neill

Sean O’Neill had roles as a reporter and editor-in-chief at Tnooz between July 2012 and January 2017.

 

Comments

Your email address will not be published. Required fields are marked *

No one has commented yet. be the first!

 
 

Newsletter Subscription

Please subscribe now to Tnooz’s FREE daily newsletter.

This lively package of news and information from Tnooz’s web site provides a convenient digest of what’s happening in technology that drives the global travel, tourism and hospitality market.

  • Cancel