In an all-cash transaction, HomeAway takes a 63% stake in Singapore-headquartered travelmob, which will continue to operate as an independent brand. Travelmob management keeps a 37% investment in the company, although the terms of the deal were not disclosed.
The transaction is notable for a variety of reasons.
HomeAway has long argued that its consumer base and Airbnb’s customers are two separate audiences. That may be true to a large extent in North America, but travelmob’s 14,000 short-term rental offerings throughout Asia-Pacific include mostly vacation rentals, but also plenty of apartment rentals and apartment shares.
HomeAway’s flirting with Airbnb-type apartment shares through its control of travelmob may be driven in large part by the nature of the leisure-travel lodging market in several countries in Asia Pacific.
As HomeAway CEO Brian Sharples states:
“We view Asia as a region where we can build tremendous incremental value for our shareholders and existing customers over the next several years. Given this opportunity, we’re excited to work with the experienced travelmob team to address today’s market needs in Asia – where vacation rentals are mostly new, but alternative accommodations are not – to build scale and accelerate the development of the vacation rental industry.”
But, travelmob’s apartment rentals and shares, and houseboat rentals could be a testing ground for HomeAway as it faces increasing competition from Airbnb and other representatives of the sharing economy.
Skift asked HomeAway’s Carl Shepherd, co-founder chief development and strategy officer, about the new business line, and he says:
“travelmob and Airbnb have a similar low barrier to entry business model and are competing for the wide range of rental options sought by Asian travelers. However, 65% of travelmob’s inventory is entire homes, many of which are managed by professional property managers, which is more in line with HomeAway’s mission to make every vacation rental property available to our worldwide audience.
“At this time, HomeAway intends to support travelmob’s established business model and focus the team on building its brand in Asia. The existing HomeAway brands have and will continue to offer dedicated vacation properties that are preferred by families and groups traveling together for vacation experiences.”
Growing in Asia Pacific has been a HomeAway priority; it even entered into a distribution relationship with travelmob earlier in 2013.
Since 2011, HomeAway acquired REA Group Ltd.’s holiday rental business and used it to launch HomeAway.com.au. In 2012, HomeAway, in partnership with China’s Ctrip.com, took a minority stake in Tujia.com, a China vacation-rental business.
The controlling stake in travelmob may also resonate with HomeAway in another important way: travelmob enables property owners and hosts to list their properties for free, and it takes a 3% booking fee only when a reservation is made.
That transaction model is the direction that HomeAway is heading in as it rolls out a pay-per booking option in the tail end of 2013 to supplement its subscription-based listings model.
HomeAway stated it will provide more information about its travelmob transaction during HomeAway’s second quarter earnings announcement on July 25.
For now, HomeAway says it expects to incur about $2 million in expenses for the rest of fiscal 2013 “to further grow the travelmob business.”
HomeAway is a public company, and operates what is considered to be the largest vacation rental business in the world.
Launched in 2012, travelmob, which operates in eight languages and has a 16-member team, has attracted about $1 million in seed funding from Jungle Ventures, Accel Partners and private investors, including Facebook vice president, Asia Pacific, Dan Neary.