HomeAway had OK earnings and will market itself as a lifestyle brand

Vacation rental giant HomeAway’s second quarter 2014 results matched expectations. It reported adjusted earnings per share of 15 cents — as opposed to consensus estimates of 15 cents a share, as averaged by Factset.

The headline numbers: Revenue soared 31.9% from a year ago, to $114.3 million for the quarter. About 320,000 listings are e-commerce enabled now, up 50% from a year earlier.

New CMO: HomeAway also said today that it adds Mariano Dima as chief marketing officer (CMO) in September. Dima most recently was CMO at Visa Europe and Levi Strauss, He was on Campaign magazine’s “Top 10 Marketing Directors” list in 2012 and Marketing Week’s “Power 100” from 2009-2013.

Marketing makeover: HomeAway wants to “create an emotional connection between our brand and the families and groups who stay in vacation rentals” — particularly in Europe.

Possible next steps: Besides advertising, HomeAway’s marketing efforts will involve “creating platforms for connection and enjoyment and telling the HomeAway story in a very impactful way,” according to a statement. 

Where it’s focusing: CEO Brian Sharples said on a conference call that Europe is the company’s prime target right now. Growth has flat-lined, with demand for bookings lagging internal targets. It has increased marketing spend since April, which has boosted traffic.

The takeaway: Sharples said on the call it is his intent to be more aggressive in marketing, with most of the hires in the past quarter being in marketing. He said:

“We will allocate more marketing expenditures in the second quarter and next year… to improve our brand equity.

Based on our testing, optimal marketing tactics may vary by region and customer bases. Performance marketing will provide highest return in some parts of the world and with some customers. In other cases, brand advertising or database marketing will matter.

Our belief is we can do this without a significant drag on earnings. Our business has high growth margins which provides cost leverage. In past years, it has invested this in product and technology. But it now will invest it in integrated marketing — which is stepping up

There may be margin compression in 2014, but the expectation is no more than a point or two — with the objective of raising revenue growth over the next few years.”

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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.



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