Holiday home rental specialist HomeAway will slow down its acquisition strategy after making a number of key investments in recent weeks.
At the beginning of March the company bought US-based bedandbreakfast.com for an undisclosed sum. A week later HomeAway acquired Brazil holiday rental specialist Alugue Temporada, also for an undisclosed sum, giving it its first foothold in the region.
Speaking to Travolution, chief executive Brian Sharples hinted that similar to the Brazil acquisition, the company would look to acquire in new markets where it had no knowledge but that HomeAway was not ‘itching’ to spend its money.
“The bedandbreakfast.com acquisition is somewhat unique. It’s the closest cousin to home-rental, a fragmented market and the customer base is similar but I don’t think you will see us going into new models like that. 95% of our focus is growing what we have organically and we will slow acquisition down in that regard from here.”
The company raised US$250 million at the end of 2008 and has made several acquisitions since including Homelidays in France just over a year ago.
Acquisitions have steadily been rebranded under the HomeAway name in the past year including UK-based Owners Direct and Holiday-Rentals.
“We are methodically moving the name into the different countries round the world. In the US we embarked on a big ad campaign with the Super Bowl to build the brand and the pay-off has been fantastic among home-owners with awareness increasing 300%.
“We need to take that learning and expand it around the world. We’re still a virtually unknown company and we can’t replicate that in Europe so we have to do it country by country, it’s recognition that we have to allocate more money to brand building,” said Sharples.
He added that there were no plans for online booking in the short-term although affiliate advertising from airlines and car rental companies is being tested on the site.
“We have been focused on the vacation rental piece and we are a good year out before any integrated air or car booking engine, it’s not on the short term road map. Our typical owners are not clamouring for online booking.”
Sharples also said inquiry growth had increased 40% in the past year with 45% of business now coming from Europe. HomeAway continues to add between 10,000 and 15,000 new properties to its sites every month.
“There are now about 470,000 properties within the HomeAway universe but that’s still only a tenth of the properties being rented in the US and Europe. There is still a fairly long way to go but we’re getting there at a pretty impressive rate.”