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Expedia Inc. is having its HomeAway vacation rental unit back off from the previously stated goal of making 100 percent of its property listings online bookable by the end of 2016.
HomeAway revised its subscription model, which previously had five tiers, in favor of a $349 annual subscription for properties that are online bookable — and $499 for those that aren’t.
So vacation rental owners and property managers who are paying a listing fee — and not an 8 percent commission per booking — have an incentive to make their properties online bookable by paying $150 less per year for a subscription, but these properties that aren’t online bookable won’t be banished from HomeAway sites if they aren’t.
During Expedia Inc.’s first quarter earnings call April 28, CEO Dara Khosrowshahi said the company hasn’t yet determined its ultimate strategy for online bookable properties on HomeAway sites, as well as vacation rentals on Expedia, Hotels.com, Travelocity and Orbitz, in terms of whether the percentage should reach 90 percent or 100 percent.
But Expedia is instead focusing on optimizing HomeAway sites, Khosrowshahi said.
“We are not as focused on getting every single property online bookable at this point,” Khosrowshahi said, adding that HomeAway will take a revenue hit from eliminating some of the higher-priced subscription tiers but hopes to make up for it by driving transaction volume of online bookable properties.
The move to downplay online bookable properties for now differentiates Expedia/HomeAway from the Priceline Group’s Booking.com, which has insisted that 100 percent of the vacation rentals on its sites be online bookable.
Many owners of individual vacation rentals have resisted the push to make their properties online bookable, and thereby getting just a 24-hour window to vet prospective guests, even though many consumers prefer the online bookable option without having to deal with days of haggling in waiting for a reservation confirmation.
HomeAway’s transaction volume rose 170 percent in the first quarter although Expedia officials acknowledged that HomeAway has suffered from some search engine optimization challenges. Expedia plans on redirecting a bunch of that HomeAway revenue back into paid marketing.
Khosrowshahi noted that HomeAway introduced a booking fee for travelers in the first quarter, earlier than expected, and that listings growth and conversions have held up well despite “questions” from property owners, many of which opposed the move because they feel it negatively impacts business.
Expedia, meanwhile. has been on-boarding apartment rental inventory in urban areas onto Expedia.com and Hotels.com.
“It is producing and producing very well,” Khosrowshahi said.
The move to add apartment rentals makes Expedia better able to compete with the likes of Airbnb and Booking.com.