At a time when other vacation rental companies that went public in special purpose acquisition company, or SPAC, deals are struggling, HomeToGo is paving its way toward profitability.
Thanks to record booking revenue ahead of this year’s summer travel, German vacation rental marketplace HomeToGo is looking at breaking even in 2023.
HomeToGo executives expressed cautious optimism in its first-quarter earnings call on Wednesday buoyed by higher average daily rates, lower cancellations and consumer appetite for travel this year.
“After outstanding 2022, we have had an excellent first quarter and high momentum and visibility for the financial year of 2023,” said Steffen Schneider, chief financial officer at HomeToGo. “For quarter one, we experienced impressive growth in consumer demand leading to our highest ever quarterly booking revenues and record-high booking revenue backlog. This is all against the backdrop of a challenging macroeconomic environment, which again demonstrates the resilience of our business model,” he said.
Founded in 2014, HomeToGo currently operates localized apps and websites in 25 countries. Much of its business is for handling bookings for third-party vacation rental providers, and it also generates revenue from referring customers to those websites.
In the first quarter HomeToGo’s booking revenues totaled €65.3 million ($70.7 million), up by 50 percent annually. The company also recorded its highest growth in the booking revenues backlog amounting to €69.5m ($75.3 million), up 80 percent compared to last year.
HomeToGo’s organic growth in the first quarter was 22 percent.
Schneider noted that most booking revenues will be recognized this summer between July and September. The company’s revenue growth of 16 percent totaling €21.9 million ($23.7 million) is in line with the company’s expectation to achieve double-digit growth in 2023. Notably, HomeToGo also improved its marketing and sales cost to booking revenues ratio, bringing it down 21 percentage points from 75 percent to 54 percent.
Joining the bandwagon of several other companies in the travel sector, HomeToGo announced its own AI feature, AI Mode — powered by OpenAI’s ChatGPT. AI Mode helps travelers plan with highly personalized recommendations. It also launched HomeToGo Modes, a new line of curated search experiences intended for travelers to find their perfect vacation rental.
“In general, HomeToGo’s approach to product development is dynamic. We continuously leverage new technologies and travel trends to update our products and features without needing to wait for big launch events,” said CEO Patrick Andrae. “Because of this agile approach, summer travelers can already benefit today from our latest generation of power tools, such as pay-what-you-see pricing and next door bookings, that provide our guests with complete price transparency and selection, further supporting our vision of making incredible homes easily accessible to everyone.”
HomeToGo’s new features, including price transparency and property comparison, come shortly after Airbnb’s summer release with similar upgrades, which prioritized consumer demand for such features.
Tags: artificial intelligence, bookings, earnings, future of lodging, hometogo, short-term rentals, vacation rentals
Photo credit: HomeToGo, a travel startup focused on vacation rental price comparison and software for property managers, is optimistic it will break even in 2023. Source: HomeToGo.