Digital Booking Sites

HomeAway and VRBO’s new rate plans mean increases for some owners, savings for others

@denschaal

Sep 04, 2012 12:59 pm

Skift Take

Vacation rental owners will get added muscle with the new ability to subscribe to one plan and list consistently across 15 of HomeAway’s international sites. The normalizing of rate plans, though, will mean a financial hit for some VRBO advertisers.

— Dennis Schaal

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HomeAway is putting the finishing touches on integrating its VRBO site into its global platform, and rolling out new pricing plans for vacation rental owners in the U.S. that mean rate hikes for some and savings for others.

As part of a new U.S. Bundle, which enables owners to list consistently across HomeAway.com and VRBO.com and to manage the listings from one dashboard, VRBO’s customers will see their 12 possible subscription levels morph into five, consistent with the Classic through Platinum levels on HomeAway.com.

“When moving from 12 levels to 5 on VRBO.com we had to map each owner’s previous level to one of the five new levels,” HomeAway explains. “While we tried to keep the mapping as fair as possible, this meant cost savings for some customers and a price increase for others.”

Winners and losers

With the U.S. Bundle and an accompanying Global Bundle, which eventually will include listings on HomeAway, VRBO, and 15 sister sites around the world, including everything from HomeAway UK to HomeAway Fewo-Direkt (Germany) and Alugue Temporada (Brazil), the vacation rental company expects to take a revenue hit in the short term, but to cash in over the long haul.

HomeAway CEO Brian Sharples noted in July that various Global Bundles, already introduced to owners in Europe and Brazil, “continue to perform very well.”

“Even with some anticipated loss of revenue from customers who currently purchase subscriptions on both sites, our research and experience suggest that the lower pricing, combined with better integration across the sites, should lead to a net positive for revenue over the long term in our business,” Sharples said

The integration of sites to accommodate the Global Bundle is not yet compete, and HomeAway states that its “3 biggest sites in the EU should have it by the end of the year.”

Owner advantages

HomeAway states that the primary advantage of opting for the bundles is that owners would be able to keep their “subscription level’s search ranking across all sites so you can get your listing in front of as many travelers as possible.”

To get an idea of the costs involved, HomeAway says U.S.-based owners who already subscribe to a UK Bundle would see their annual subscriptions rise to $349, from $225, if they chose the Global Bundle with 15 international sites.

HomeAway has acquired 17 vacation rental and technology companies since its founding in 2005. It has labored to tie together their disparate technology platforms, with the VRBO integration nearing completion.

HomeAway’s ability to leverage the distribution clout of its global businesses with these bundled and tiered-pricing plans should translate into an ongoing competitive advantage.

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