HomeToGo Buys Amivac in Start of Acquisition Spree

HomeToGo, a travel startup focused on vacation rental price comparison and software for property managers, has acquired the vacation rentals business unit of the real estate group SeLoger.

The companies didn't disclose the terms of the deal, which includes the acquisition of French sites amivac.com, vacances.com, and vacances.seloger.com.

“France is one of the most important travel markets in Europe and many of the Amivac vacation properties are unique to the site — allowing HomeToGo to expand our global presence and offer exclusive accommodation options to our consumers," said Valentin Gruber, HomeToGo's chief operating officer, in an interview.

HomeToGo is prepared to make additional purchases, using some of the $248 million in cash added to its balance sheet when it became a public company in November.

"HomeToGo is focused on our global expansion in all major markets,” Gruber said.

The deal also boosts HomeToGo's use of the subscription model. Its newly acquired brands already let homeowners and professional rental agencies list units by paying a recurring fee rather than the more traditional commission-only model.

The acquired brands will continue to exist post-merger, just as HomeToGo has continued to run Casamundo, Tripping, and Wimdu after it bought them. However, the computer interfaces that hosts and owners use to manage their inventory will be shifted to HomeToGo's systems.

HomeToGo's Ongoing Momentum

HomeToGo has confounded many long-time analysts of travel startups. Its report for the third quarter of 2021 showed record booking revenue of about $31.5 million (€28 million), up 49 percent from the pre-pandemic third quarter of 2019.

What skeptics seem to have gotten wrong so far is HomeToGo's ability to outrun its rivals.

Critics envisaged a bigger, better-capitalized rival such as Kayak, owned by the giant Booking Holdings, or Airbnb, whose stock price endlessly soars, or Google, which has tiptoed into listing rentals the same way it lists hotels, or Trivago, partly supported by Expedia Group, out-aggregating it and taking the top spot by generating more demand thanks to economies of scale in digital advertising for larger players.

Yet HomeToGo appears to be selling more short-term rentals and vacation homes than any other metasearch player, HomeToGo generated a gross booking volume of approximately $1.35 billion (€1.2 billion) in the first nine months of 2021 (though no metasearch brand specifically broke out easily comparable statistics.

HomeToGo claims it is besting its rivals at de-duplicating listings aggregated from multiple sources, meaning that consumers see more accurate results on average on its site. Vacation rentals also currently experience much more price disparity.

A consumer sees a wider range of rates for the same property. One reason is that hosts and owners face a confusing array of fee structures across online agencies. Another reason is that the people listing properties are often not yet sophisticated in how they use so-called channel managers, or distribution software, to manage price parity across all points of sale.

As of October 2021, HomeToGo's portfolio had 15 million accommodation offers, and the latest acquisition will increase that number. Getting exclusive or semi-exclusive inventory, as HomeToGo claims this latest deal does with some French properties, also helps give HomeToGo an edge when marketing itself as a starting point for researching trips against Airbnb, which has much higher brand recognition.

Longer-term, some of these advantages will fade. The details of the company’s operations will prove more critical. Can the company's subscription model and its blending of a software sales business with metasearch give it fatter margins than competitors in a consistent way? Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA, a measure of profit), had a margin of 35 percent in the third quarter of 2021.

Another X factor: Will fear of bad publicity continue to scare Google off from becoming the threat it could easily become? Startups Holidu and VacationRenter also claim traction in metasearch specifically. As ever, skeptics will continue to raise questions about whether the vacation rental market and today's online travel market present fundamentally different dynamics that make it dangerous to extrapolate too much from past lessons in how Booking Holdings came to dominate hotel selling online.

"The vacation rental market is incredibly fragmented both in France and internationally, but is experiencing a tailwind from the pandemic that is driving development and rapid growth," said Patrick Andrae, co-founder and CEO.