Expedia’s Vacation Rental Breakthrough Is a Big Bust So Far

Expedia’s partnership with HomeAway to sell HomeAway’s vacation rentals on Expedia.com has been such a dud after more than a year of testing that at times it is really difficult, if not impossible, to find any evidence of it.

After hearing Expedia CEO Dara Khosrowshahi’s noncommital assessment last week about the role of HomeAway’s vacation rental inventory on Expedia.com, we went looking for some of the listings yesterday in vacation markets such as Orlando, Aspen, and Phoenix and couldn’t find any.

We asked HomeAway to point us to some of the listings on Expedia.com and HomeAway sent us a screenshot of what HomeAway’s presence on Expedia.com looks like — when it is there.

As you can see in the screenshot below of one of the latest experimental incarnations of HomeAway vacation rentals on Expedia.com, the vacation rental listings don’t run down the page as hotel results do. Instead users would have to click on the single grid labeled “Vacation Rental” and branded “HomeAway” to finally get a glimpse of the 333 properties in Hilton Head, South Carolina.

“We are continually testing the vacation rental search placement with Expedia so depending on when you visit Expedia.com, you may or may not see the HomeAway vacation rental option,” said Jordan Hoefar, a HomeAway spokesperson. “For now, HomeAway’s expanded distribution network rentals are only represented in a specific number of geographies so you may also not see this option if you are searching in a geography that is not represented.”

Expedia decided not to place a vacation rentals tab on the Expedia.com homepage and instead vacation rentals are geared to be discovered when searching for hotels for an extended stay of perhaps a week or so with a group of guests.

When we searched Expedia.com yesterday for a place to stay in Orlando for six people for a week in May, for example, we saw numerous results for Disney, Wyndham, Hilton, Marriott, and Hyatt resort-type stays when filtering for “private vacation homes.”

There wasn’t a trace of vacation rentals from HomeAway to be found. Not even the type of solitary advertisement-like placement seen above.

Expedia is clearly more interested in protecting and promoting its core hotel business and is playing around with vacation rentals off on the periphery.

There are undoubtedly a lot of disappointed people over at HomeAway.

Hopes Dashed?

There was a lot of excitement in October 2013 when Expedia and HomeAway announced a partnership to place HomeAway’s vacation rentals on Expedia.com and thus bring vacation rentals to the mainstream with even wider exposure.

But it’s been a snooze-fest ever since as Expedia Inc. has been busy acquiring Travelocity, Wotif, and Orbitz Worldwide (probably), and been playing around with HomeAway’s vacation rentals in what it calls “testing and learning” mode.

It’s all about protecting Expedia’s core hotel business, and trying to decide if vacation rentals really have a place in the Expedia universe.

To Be Determined

Although Expedia and HomeAway have been testing HomeAway’s listings on Expedia.com for more than a year, it is clear that Expedia is still undecided or ambivalent about the whole thing.

“Sure. I think — listen, I think vacation rentals are an important market,” Expedia Inc. CEO Dara Khosrowshahi told financial analysts during the company’s first quarter of 2015 earnings call last week. “It’s an important product in many, many markets. As to whether it’s important for Expedia to be in, that remains to be determined.”

Expedia is poised to launch HomeAway’s vacation rentals on Expedia sites in Europe, where there is more traction from larger groups of vacation rental property managers and the sector is more popular.

“We have a good relationship with HomeAway,” Khosrowshahi said. “We’re actually pretty excited about adding their inventory on an international basis, especially in Europe, where that business in general or that product is a bit more popular. And we continue to test and learn with them, and we’re hoping that we hit upon a vein and are able to really up our volume in the vacation rental side of the equation.”

“At this point, it’s something that we’re testing and learning, and we haven’t quite hit that vein yet. So is it growing? Yes. But is it significant in our portfolio? Not yet, and we’d like it to be more significant going down the line.”

For his part, HomeAway CEO Brian Sharples told analysts April 23 during its first quarter earnings report that not much is happeing on the Expedia front.

“And then related to the question on Expedia, there is not a lot of new news since last quarter,” Sharples said. “It’s fairly still status quo. We’re not exposed on the majority of the searches on Expedia. Still probably the biggest news there is we’re getting set to go live in Europe with them.”

When HomeAway initially discussed its Expedia partnership officials mentioned that they planned to do other big distribution deals in the future.

It appeared as though HomeAway was on the cusp of coming to terms with Orbitz on a vacation rental distribution deal — but then Expedia announced its intent to acquire Orbitz.

Don’t expect anything to happen on the HomeAway-Orbitz distribution front in the immediate future.