Skift Take

One of the reasons HomeAway thought it would be in its interests to get acquired is that it faced substantial risks in transitioning to an online bookable platform and tacking on a fee that travelers have to pay. Now it has Expedia's marketing muscle and tech skills to support all the changes, and a tested product official to help lead the effort.

John Kim, who had been Expedia’s chief product officer since 2011 as the company executed major product and platform changes, is now chief ecommerce officer at sister brand HomeAway as the vacation rental site embarks on what Expedia CFO Mark Okerstrom characterized as “a difficult transition” that will take a few years.

Speaking at Expedia’s investor day March 16 in New York City, Okerstrom said the first phase of the transition of HomeAway, which Expedia acquired in December for $3.9 billion, is to make the vast majority of its properties online bookable and to boost its take rate, currently at around 3-4 percent, to make it on par with (15 percent) and Airbnb (13 percent).

To get that going, HomeAway recently introduced a booking fee for guests in the U.S. and reduced commissions for property owners.

The combination of booking fees paid by the property owner or manager and the traveler fee, which would average around 6 percent, would get HomeAway’s take rate into the 15 percent neighborhood.

HomeAway is also making unspecified changes to its subscription business, which has vacation rental owners pay an annual fee to list their properties instead of paying per booking.

Second Phase

The second phase of the transition will be to increase HomeAway’s foothold of primary and second homes in big urban markets to better compete with Airbnb, Okerstrom said.

Expedia CEO Dara Khosrowshahi said the company is now staffed up for the transition at HomeAway now that Kim is in the new role.

Khosrowshahi said Expedia is reinvesting the traveler fee into features such as HomeAway’s Travel With Confidence guarantee.

The Limits of Integration

Khosrowshahi said that while in-house brands such as Expedia and will eventually sell HomeAway’s vacation rentals in tandem in some way with hotels, HomeAway won’t get hotels, although HomeAway will eventually offer things such as car rentals and activities.

Consumers don’t visit HomeAway sites looking for hotels, Khosrowshahi said.

Khosrowshahi credited Kim with playing a key role in Expedia’s turnaround in recent years. Among the elements were building a common tech platform for many of Expedia’s brands and introducing product changes such as the Expedia Traveler Preference program, which enabled customers to choose whether they wanted to prepay for a hotel or pay at the property.

On the competition with Airbnb, Khosrowshahi said rivalries with strong players are nothing new and Expedia actually prefers to have a strong “vertical player” to compete against in any given sector.

He said he likes Expedia’s position vis a vis Airbnb and Expedia’s success would depend on the quality of its execution.

“We are quite confident we can win our fair share and more,” Khosrowshahi said.

Unlock the door to short-term rental insights.
June 5 in New York City
See Who's Coming

Have a confidential tip for Skift? Get in touch

Tags: airbnb, expedia, homeaway

Photo credit: HomeAway's current look and modes of booking will likely transition to an experience more similar to that of market leader Airbnb.

Up Next

Loading next stories