The Definitive Oral History of Short-Term Rentals, Part 1

Skift Take

Airbnb disrupted vacation rentals. Will short-term rentals take a chunk out of the hotel business? History shows that's a distinct probability.

Vacation rentals have been around “forever,” as some executives pointed out, but read what follows as a history of short-term rentals as they transitioned from classified ads in The New York Times and Craigslist to rudimentary websites and the momentous Airbnb IPO of December 10, 2020 — and a full-blown industry that disrupted hotels and traditional hospitality models. 

This is a primer in the evolution of an industry, as told through the reminisces, anecdotes and insights of key people who made it all happen and, in some cases, are still doing it today. This history of short-term rentals is a tale of both risk-taking and cold feet.

There will be newsy elements in this oral history, as well as personal knocks, humor, and drama.

FlipKey founder TJ Mahony said in 2008 he “split open” his head in Tripadvisor CEO Steve Kaufer’s “really low” home garage during talks about a deal that eventually led to Expedia/Tripadvisor acquiring FlipKey. 

This Skift Oral History of Short-Term rentals is — like our 2016 Skift Definitive Oral History of Online Travel, our the 2018 Oral History of Travel’s Greatest Acquisition,, and our 2017 Oral History of Boutique Hotels  — a lengthy piece. So lengthy we’ve published it in three parts. Our interviewees may not nail every date precisely, and some of them offer conflicting accounts of the same occurrence. But scroll around and enjoy the narrative. For anyone interested in short-term rentals, and the past, present and future of travel, it will be well worth a read.

We interviewed 30 executives and entrepreneurs, including eight women, in the U.S., Canada, Argentina, Germany, the Netherlands, Switzerland, and the UK for this Definitive Oral History of Short-Term Rentals. They included founders, co-founders, CEOs, and other top brass — past and present — of short-term rental brands, major online travel agencies, as well as property managers and hosts.

The Experts

We interviewed 30 executives and entrepreneurs in the U.S., Canada, Argentina, Germany, the Netherlands, Switzerland, and the UK for this Skift Definitive Oral History of Short-Term Rentals. They included founders, co-founders, CEOs, and other top brass — past and present — of short-term rental brands, major online travel agencies, as well as property managers and hosts.

Patrick Andrae
John Banczak
Rich Barton
Dave Bollinger
Eric Breon
Sandra Brown
T.J. Clark
David Clouse
Chip Conley
Jeanne Dailey
Brian Egan
Glenn Fogel
Jon Gray
Jennifer Hsieh
Jeff Hurst

Merilee Karr
Dara Khosrowshahi
Simon Lehmann
Aurelie Lepercq
Doug Macnaught
TJ Mahony
Ivan Marenco
Hunter Melville
Kim Rubey
Brian Sharples
Carl Shepherd
Rhonda Sideris
Laurence Tosi
Tobias Wann
Pamala Parris Wideen

Vacation Rentals Come Online in the Mid-1990s

David Clouse, Founder VRBO

So, when we moved from California to Colorado in 1987, we had owned a house, a single rental home in California. A year later, our tenant moved out and I go, “Well, this is stupid. I don’t want to own a rental house in California and have to maintain it. Let’s sell that house. And wouldn’t it be fun to own a vacation rental and a ski condo in Colorado. Yeah, but how are we going to pay for it?” When we talk to the real estate agents in Breckenridge, that would probably be in 1989, they told us, “Well, property manager is the only way to go because you’ll never be able to find renters by yourself. And by the way, property managers charge 45 percent.”

And so, I never wanted to go that way. So, that’s what we started with in the back of Ski Magazine, they had a classified section. I think I was paying around $700 for five months’ worth of advertising in Ski Magazine. And I got my own 800 number and I applied for a credit card account so that I could take a credit card. I tried to make it as easy as possible at that point for people to connect with me and make payments. 

In 1995, I was starting to hear rumors about this thing called the internet, and being a computer programmer, I was able to weasel my way into a job as the intranet webmaster for United Airlines. I was able to teach myself about HTML and programming on the internet. I was trying to figure out vacation rentals, this was in 1995, so this is how we got started. I created a Microsoft Basic database, which ran only on my own desktop computer. I used Microsoft Basic language to teach the database how to create a webpage based upon the data coming from that database. So, how many bedrooms, how many bathrooms, what city is it in? Blah, blah, blah. But I only had one property.

So that was VRBO listing number one was our ski condo in Breckenridge, Colorado. I was a son of a pastor. I never grew up with money. I was always interested in being an entrepreneur, mowing lawns, delivering newspapers, trying to figure out how to be an entrepreneur as a kid. I did several little entrepreneur things prior to getting hired as a computer programmer. So, that’s how we started. 

I didn’t buy the VRBO domain name until 1996. I immediately started trying to figure out what is now known as SEO, search engine optimization. So back then in 1995, Google didn’t exist. There were some rudimentary search engines. So the way you got found on search engines was you stuff the webpage with as many keywords as you can, you make sure the keywords show up in the URL, the bigger the letters are, the more important those words were. When people search for Breckenridge ski condo, or Breckenridge vacation rentals for rent, or whatever? How could I get my one page to show up there?

Well, fortunately, I got pretty good at it. And so, people ask me, well, how did you advertise for new property owners to join your website? I didn’t, I just did the best I could to make sure that whatever page that I had, showed up on this search engine. So, well, it didn’t take long for people to find that my listing number one on VRBO was now at the top of the list for Breckenridge. So, I started getting calls from people or emails from other property owners asking how do I get my listing on? Can you make a webpage for me?

So, we started. For the first year, we did not charge a fee for listing on VRBO. I was still working at United Airlines. My idea was to have a four-letter name, I would’ve preferred to have a two-letter name, but that was impossible to find. So when people make their paper flyers to hand out or post up in the grocery store, they’re going to use, or whatever, because it’s short. I had a friend at United Airlines. I was talking to him about this little side project I was working on and he goes, “Well, what’s it called?” And I go, “VRBO.” And he said, “Well, that’s a stupid name.” Anyway, I was offended there for a little while.

So, someone would either send me an email with this information in it. Because I had a web form that you could use to say how many bedrooms, how many bathrooms, but it wasn’t hooked to my database. I would have to manually look at the information, type it in, transpose it across or copy paste it into my database, and generate the webpage. At the end of a first year, we had about 250 listings. And at that point, I was still working full time as a programmer and I would come home, and I would spend four hours in front of my computer copying, and pasting, and getting the SEO right to show up on the top of the listings.

And I said to my wife, “This is going to kill me if I keep doing it for free. So now it’s time to fish or cut bait and let’s see if people will be willing to pay.” So, we’d bought a scanner. The only way we could figure out how to get pictures was for people to take their paper photographs and mail them to us. And we would scan them and add them to the webpage.

The first 250 listings were free, and then the original charge after that was $72 a year. When I was running VRBO, it was always a subscription service. An annual subscription. It didn’t take long for people, once they started seeing, “Oh look, these people have pictures. I want pictures. Well, if you want pictures, you got to start paying.” So, at that point I told my wife Lynn she could quit her job — she was an RN, a nurse — and come to work for VRBO. She was delighted not to have to be a nurse anymore, but she wasn’t convinced until we started averaging about two checks a day coming in the mail. And they would arrive at our mailbox in front of our house, and she would go out and collect the checks and she would do the billing. So, I worked for United for three years after I started VRBO, until 1998.

So, I did all my programming at home in my basement. The first gal that we hired, Jeanie, is still a good friend of ours. We would meet her at church on Sunday night or Sunday morning. And we would pass her an envelope full of photographs and she would scan them and upload them to the website. We told people if they sent us a self-addressed stamped envelope, we would mail those precious pictures back to them.

We figured out before Covid that it makes no sense to pay for an office if people can work at home. And our employees loved it. Most of our employees were stay-at-home moms and we started them off part-time and they could drop the kids off in the morning. And it really didn’t matter what time of the day they did their work, or if they stayed up until the middle of the night, as long as they did the work that they needed to do, they could do it on their own schedule. We had almost zero employee turnover, and we would have one meeting a year, which was a Christmas party at our house. When we sold to HomeAway in 2006 I think we had around 26 employees.

The first 10 listings were all in Colorado, and then we started seeing them show up in Florida and California and Hawaii, the most popular locations. So, I guess the thing that made us different than most of my competitors is I never spent any time on advertising trying to find new property owners. My theory was that if I could find as many renters as possible for the property owners I had, and once their property was completely full, they would tell their other property owners around them where they were getting all their renters from.

Lynn (Clouse) and I got too busy, and we wound up having to hire two ladies from our church to come and help us. But since the database was on my computer, in my basement, they had to come and work in my basement. So every day, every weekday anyway, we’d have these two ladies come to our house and work in our basement answering emails and creating new listings. And I was spending my time optimizing the website and making modifications. The first thing I needed to do is I got to figure out how to get these ladies out of my house. I concentrated on getting the database to be accessible from the internet and allowing property owners to make their own changes to their own listings rather than us having to.

Rich Barton (R) at Skift Global Forum in 2017 with other early online travel innovators

Rich Barton founded Expedia out of Microsoft in 1996. 

Vacation rentals were exciting for the obvious reasons: a huge industry, mostly in the dark, so mostly opaque inventory, globally distributed, no marketplace, physical, digital, or otherwise. It was very difficult to get inventory, pricing, availability. Intuitively, lots of unmet demand and lots of fallow supplies, so all of the stuff we know. It’s obvious now, but that sets up really nicely for a digital marketplace, which was something that we were during the early days at Expedia, always dreaming about.

We made various investments in the early days, and were kind of nibbling at it, but we really got involved after Steve Murch and Greg Slyngstad left Microsoft and started VacationSpot in 1997. Greg was the original GM of Expedia inside of Microsoft. Steve had been adjacent to us at Expedia inside of the Microsoft Online Group. But anyway, those guys took off at some point, probably before we went public in 1999. 

I was an investor in VacationSpot, I was on the board, I was very interested. They had raised money from a good friend of mine, a guy named Jay Hoag, who is the founding partner of TCV, which is a giant firm now. So they had raised some money with that kind of aim, “let’s build the beautiful digital marketplace for vacation rentals.” That was the dream. So that’s how Vacation Spot got going.

Meanwhile, I was off spinning Expedia out of Microsoft on a separate fork and keeping a toe in the VacationSpot thing just as optionality because I knew all the guys and thought it was a great idea. We always had the dream at Expedia of interweaving vacation inventory with hotel inventory. After Expedia went public, an early deal we did in addition to buying Travelscape, which was our kind of entree into merchant hotel business, was we bought VacationSpot. And Steveand Greg came back to work for Expedia.

We worked hard on both of those things, hotels and vacation rentals, but the vacation rental marketplace idea was just a much longer-term heavier lift. And our much more immediate, well-understood opportunity was merchant hotels, and we ended up chasing the more obvious opportunities for growth. I would say we took a little bit of a flawed approach instead of coming at it like VRBO did. We looked at buying VRBO when we were at VacationSpot and it was separate, a couple times, as well as a bunch of these other kind of server-in-somebody’s closet somewhere in Cincinnati or Steamboat Springs of wherever, running basically a classified advertising listings website.

I was on the board of Vacation Spot, but Steve and Greg talked to all of them, including Cyber Rentals, VRBO, there were three or four others, and they were all really kind of bootstrap, kludgy cash-generative operations with very little to no technology. We were tech snobs, arrogant tech people, who liked software, and they didn’t appeal to us. And these were really just newspaper classifieds brought to the web in a very simple way, which it turns out was the right approach for the short term. Instead, we were trying to build reservation systems, property management system software, basically, to be sold into the supply side.

Anyway, that lasted a few years of trying to do that. And we stopped. And of course, all of us missed the big opportunities, which Brian (Chesky) and his co-founders at Airbnb (created). 

David Clouse: 

I ran VRBO until 2006 and we never interjected ourselves into the transaction. It was always a subscription. We always treated it like a classified ad in the newspaper. Don’t call us if there’s a problem because we can’t get into the property. We don’t have anything to do with that. Of course, if our property owners wound up getting a lot of complaints, we were very much willing to cancel them and get them off our website because we didn’t want them there.

I was competing from the renter standpoint of getting as many renters as I could rather than from the getting as many property owners as I could. And a lot of my competitors that failed, they concentrated on trying to get as many properties as they could, which is worthless if you don’t have any renters.

Our secret sauce that made VRBO better than any of the other vacation rental websites early on is we would show up in organic search.

A1 Vacation Rentals contacted me and CyberRentals and another website out of Florida called Great Rentals and there was a British website. There were 10 vacation rental websites that were invited to the first meeting of what became The first meeting was in New Hampshire. We had one of our semi-annual meetings in Rincon, Puerto Rico. We went to France, lots of different places for four or five years, we would do that. And it was quite a unique experience to get to become friends with my competitors. And most of the teams were a husband and wife. Dave Bollinger and Hunter Melville of CyberRentals were a partnership. But there were a couple of times when Hunter brought his wife. So it was very much family oriented. We knew that the market was big enough to support all four of us. And at that point, there was VacationSpot. They got Microsoft money. I got a little afraid of that.

The first product that we did together was calendars. Wouldn’t it be better for the property owners to keep one calendar accurate rather than have to keep four calendars accurate? And the second product we did together was reviews. So, if you had a property listed on three different websites, your reviews could show up on all three of the websites.

We never shared properties between each other. But if anybody asks, where should we rent? What other websites should we use? We always recommended one of the Rentors groups. When you went to update your calendar, there would be advertisements for all four of our websites on the Rentors website. 

Looking back, we were a little worried that we would be portrayed as being a monopoly, but with what we’ve got going on in the world today, the monopoly and power that some of these companies have, we were super small potatoes at that point. But back to VacationSpot, that was interesting. They had money. All of us, we were all bootstrapped. I don’t know about the other guys, but I never raised any money. I would take my income and pour it back into the business. 

With my company’s name, Vacation Rentals By Owner, I never, never expected property owners to join. But they just saw that we were getting renters. That was actually an interesting mistake that I made. Because we got contacted by a property manager in Rosemary Beach, Florida at some point. And he says, “I have 100 properties I want to add to VRBO What kind of a discount can you give me?” And I thought about it and I thought about it. And I wound up giving him a 25 percent discount. If you had over 10 properties on VRBO, we would give you a 10 percent discount. If I had to do it again, I would charge them extra. If you’re a property manager and you want to be on VRBO, it’s 50 percent more.

Because when I go look for vacation rentals, I don’t want to be the going to a property that’s managed by this big conglomerate. I want to go to a property where I can talk to the property owner. This is their only vacation rental. They’ve decked it out for their own use. They’re better properties because this is their own vacation home, not just an investment, They’re trying to help make their mortgage payment and pay their property taxes, but they’re not trying to make money on it. Whereas the people that are property managers, they’re trying to optimize for revenue, and they don’t have the unique features that an individually owned property might have.

I quit my job at United Airlines in 1998. I was making two and a half times more from VRBO than I was from my programming job. So, that took three years to get to that point. So at a certain point, I told my accountant, “How can I keep the government from getting all my income?” And he says, “I’ve got the program for you in the U.S Virgin Islands. Probably January of 2005.

Vacation rentals were exciting for the obvious reasons: a huge industry, mostly in the dark, so mostly opaque inventory, globally distributed, no marketplace, physical, digital, or otherwise. It was very difficult to get inventory, pricing, availability. Intuitively, lots of unmet demand and lots of fallow supplies, so all of the stuff we know. It’s obvious now, but that sets up really nicely for a digital marketplace, which was something that we were during the early days at Expedia, always dreaming about.

We made various investments in the early days, and were kind of nibbling at it, but we really got involved after Steve Murch and Greg Slyngstad left Microsoft and started VacationSpot in 1997. Greg was the original GM of Expedia inside of Microsoft. Steve had been adjacent to us at Expedia inside of the Microsoft Online Group. But anyway, those guys took off at some point, probably before we went public in 1999. 

I was an investor in VacationSpot, I was on the board, I was very interested. They had raised money from a good friend of mine, a guy named Jay Hoag, who is the founding partner of TCV, which is a giant firm now. So they had raised some money with that kind of aim, “let’s build the beautiful digital marketplace for vacation rentals.” That was the dream. So that’s how Vacation Spot got going.

And of course, all of us missed the big opportunities, which Brian (Chesky) and his co-founders at Airbnb (created). While we were looking to automate a preexisting marketplace, we missed the bigger picture. Those guys started from a completely different place. Like so many of the interesting business models, it was illegal, which meant an established public company has a hard time breaking the law and sustaining that. It’s the same in the transportation business with Uber, it’s the same in, oh, my God, even YouTube. YouTube was breaking the law. Some of the great businesses that were created in that era, and will be created in the future, basically thumbed their noses at what are obviously antiquated regulations.

Rhonda Sideris founded Park City Lodging, which evolved into becoming a property manager in Park City, Utah in 1984 and launched its first website around 2000:

I founded the company in 1984. I had been involved in all walks of everything. I had been a river guide, I had owned two restaurants. I was a bar manager. I worked construction cleanup. I did all of that and decided, you know what? I need to get out of the bar business. I loved it. I loved being a cocktail waitress. I really did. If I don’t want to be wearing a poodle skirt when I’m 50, well wouldn’t that have been great to be able to wear a poodle skirt these days. So I got a job at a real estate company as a receptionist and five bucks an hour just didn’t really cut it. That was in probably 1982.

And I had a friend who asked about renting a property in Deer Valley, which is one of our ski resorts here. He wanted to spend $1,200 a month and he wanted it furnished. And he only wanted it in the winter. Well I couldn’t find him anything. I found him something for $1,500 a month unfurnished. And I said, “Why don’t we rent furniture and we’ll rent it out for you?” One of the agents at the company I was working for, she had been cleaning a big house every Saturday for 50 bucks. That’s how long ago it was. Big five-or six-bedroom house. So I took on that cleaning and then she wanted to get totally out of it. So she turned over everything to me, the cleaning and the rentals. In those days you just threw an ad in Ski Magazine. 

I said to my friend, “I can rent it for you when you’re not here.” I was thinking overflow. So I got him that rental. And then I was still involved in catering. I had a company as well as my restaurants, but I was still involved in catering and I was at a New Year’s Eve catering. And one of the guests said, “Really? You’re doing that? Well I’ve got 12 properties and I don’t want to be involved anymore.” So he gave me his 12 properties to rent out and manage. Now I have 14. I got my real estate license and so I got legal in 1984.

By the late nineties I probably had just begun taking on homeowners associations. So I probably only had three or four homeowners associations. The largest one I have is 120 units.

I built a building, let me see, in 1996. I built the building in 1996 and I was there until 2016 when I built the building I’m in now because I wanted to move all my employees to the same place. So we have laundry here, maintenance, housekeeping, everybody’s in the same location. 

I’m pretty smart. I always hire somebody younger than me and smarter than me. So I started going to conferences. I started going to First Resort software users forums, and then you start learning a lot more. 

If you look at a ski vacation, it’s probably the most difficult vacation to book because there’s so many components. So travel agents would call us, and we could arrange the other things, but if they were getting all the commission then we wouldn’t. Then tour operators came into the pictures and travel agents work with the tour operators. That meant an additional 10 percent commission. So instead of paying a travel agent 10 percent — and with the travel agent we took the credit cards — with the tour operator we have to pay them 20 percent and they were the merchant of record. 

David Clouse:

Just as we were moving to the Virgin Islands, these two guys, Brian Sharples and Carl Shepherd, called (in 2004). And at that point, we were meeting, we had a vacation rental in Depoe Bay, Oregon. And they said, “We wanted to come and talk to you about maybe buying your companies.” What they said was, both of them had successful exits and they had $50 million to create something. They didn’t know what. They said, but we’ve identified that vacation rentals would be a good industry to be in.

And I said, “That’s all nice and fine, but $50 million is not enough. You can’t even buy VRBO for $50 million.”

They came to the vacation rental in Depoe Bay, and they talked to each of the individual companies individually. All four of us talked after they left. And three of them decided to sell within a short period of time to what became HomeAway, but not VRBO at that time. It was partly because we had just moved to the Virgin islands. We were just starting this new adventure. But partly because I was confident I could keep growing the business on my own for a while. And so, we decided that we would stay in touch.

One of the things we had to do in the Virgin Island is hire local people, and we needed more employees anyway. But up to that point, everyone was virtual. We had to have an office in the Virgin Islands. Which meant we wound up having office politics in the U.S Virgin Islands. I’m really not going to go into what type.

At a certain point, I said, “How much money do I need to have to live the rest of my life and is another few million dollars going to make any difference and why am I putting up with what I’m having to put up with?” I’m working 80 hours a week. And so I said, “Let’s call Carl and Brian and see what we can come up with.”

And I said, “That’s all nice and fine, but $50 million is not enough. You can’t even buy VRBO for $50 million.”

David Clouse, Founder VRBO

And it didn’t take long for Brian to come. He flies out to meet us in the U.S Virgin Islands. And he stayed at our house a couple of nights and we sat around the kitchen table and hammered out a deal. And it took about eight months. We sold the business and closed the deal in December of 2006.

After going through this eight month-process of, after going through this eight of the lawyers, and getting the books all in order, and the announcement is supposed to go out on, I think, a Friday or something that HomeAway is buying VRBO, on Thursday, the day before the announcement comes out, I got a call from Expedia. “Well, we’d like to talk to you about maybe acquiring VRBO.” And I go, “Can we talk tomorrow?” Because I knew the announcement was coming out the next day. Yeah. So, they did approach me, but it was too late at that point.

Hunter Melville and Dave Bollinger, co-founders of CyberRentals, started with print magazines in the early 1990s and launched a website in 1995

Hunter Melville:

We grew our customer base somewhat slowly, but incrementally. And then we began to do rentals. First it was long-term, just to kind of help them out because five-month winter rental. And this was kind of the crux. We had a problem advertising, because at the time everybody advertised in The New York Times. The classified section was probably 40 pages long of one centimeter by five-centimeter little ads that cost $100 each, OK? And so you were sitting there going, “We can’t pay $100 and hope that somebody will rent one of our houses, that we might make $50 on or something.” So established businesses that had hundreds of rentals could afford to run those kind of ads. So we had this brainstorm. We had seen the model of an Autotrader magazine, where people advertised their individual cars. So Dave said, “Hey, we should do an Autotrader guide for vacation rentals.” Where each of these little houses had a picture, like a car, with a little description, and you would call the owner. 

The first one was called Vermont Rentals magazine in around 1991 and the interesting thing was that we did the individual homeowners, vacation rental by owners, and we also advertised our competitors. 

Dave Bollinger:

It really became kind of like a real estate magazine. But we looked at Vermont, and we found individuals and rental agents, depending on the section of Vermont you were talking about. And around the country, it just differs. Maine is so forested, there’s not a lot of agents around so the cabin owner usually did it on his own. That’s what was going on in Vermont, so it worked well. We were literally driving around all over the state, all over the Northeast, dropping these magazines at key restaurants, train stations, all over Vermont, where you can pick up stuff.

Hunter Melville:

We actually went to some town halls and would look up the records of new purchases. And you’d get their address, and we would mail them a pitch. So that was a good source of leads, but one of the best source of leads was The New York Times. Because in the early days of the web, you could look up a phone number and get the person’s address. So we poured through every vacation rental ad in The New York Times and sent them our pitch. It was not very hard for them to try, when they are paying $100 per day in The New York Times for that little tiny ad. Or they could be in our magazine for a year with a full picture and five times as much text. So that’s how we got the leads. I recall we charged them $129 a year. 

Dave Bollinger:

That became successful. We were running around all over the place. Hey, we might as well do Cape Cod and Martha’s Vineyard and Nantucket. Same concept, except that on the Cape and the islands, it was pretty much organized by towns. You know, “I want to go to Truro. I went to go to Wellfleet.”

Hunter Melville:

Vermont Rentals at first was just the phone number. And then all of a sudden the web came out, and we had learned about it through all the discs and AOL, and I had friends. When you’re in Vermont, we always were amused because people in the cities didn’t really see the value of the web. But when you live out in the woods, you’re connecting to a whole world. We got URLs. Oh, I guess we went right to in 1995. Our problem was trying to get people to go to the web. Our owners thought it was cool to have a website, but most people weren’t on the web. We were actually putting on our cars, trying to get people to go to the web. 

Dave Bollinger:

We finally find this guy (Alan Openheimer) in Oregon, who was an early Apple guy, and he became our ISP.

Hunter Melville:

This guy created this whole world for us. I think in the beginning we were paying him $20 a month for all of our websites. So we go out to his office, and we’re expecting to see this giant server farm with all these black racks. It was on an Apple Clamshell, the ancient-colored things that Apple came up with. It was like in a closet. The way it worked was exactly the same as The New York Times. Guests would call the owner and would cut all their deals separately. We were just doing the subscription model, as they called it.

Dave Bollinger:

I’ll say the key next point was it was probably 1997 that Brian Robb from A1 Vacation Rentals sent out an email to all the vacation rental sites. Harvard MBA, went to Yale undergrad, and just a great guy. And anyway, he sent out an email to all the vacation rental sites. There was VRBO with David Clouse, A1 Vacations with Brian Robb, and Great Rentals with Pat and Jan VanVoorhis. We knew the English people … VRBO was growing rapidly. Brian Robb, who was this little maniac, invited all the big vacation rental sites to meet in New Hampshire at his buddy’s B&B that he just bought or something. He was just hyper, always thinking of stuff, always engaging us as you’ll see along the way.

So we go to the meeting. It was sort of hilarious. A1 Vacation Rentals shows up, of course. Cyber Rentals is there, the Clouses of VRBO, this English group, I forget their name, and these crazy Californians who were kind of wild. So we’re all sitting around. It was very loose. But they were all vacation rental homeowners, and we were actually the property manager side.

Well, I would say we all became buddies and we quickly lined up another conference in Florida. And it’s at that point when the English site quickly bowed out after that meeting. But I think Brian Robb probably said, “Hey, you know maybe one day we all get together.” 

Hunter Melville:

The initial thing was, “Let’s just get together and know each other.” And Brian (Robb) probably had the idea of putting it together, packaging it together as a sale. And then it morphed into doing something that gave us a purpose, and that was to share a calendar and to share a guest book. 

Dave Bollinger:

Being property managers, we began to know that there were some homeowners who were just troublesome, OK? There are good renters and there are good homeowners, but there’s also bad ones of each. We had this rule called three strikes and you’re out. If we got three complaints — because here at this point, we have 5,000 vacation rentals — and we’re fielding the complaints because they found these houses through us. And so our theory was that if we heard a complaint three times, they’ve probably got many more complaints than that. And we often had to settle the disputes. It was our reputation on the line. So even though they paid us to advertise, we were brutal with them if they got out of line. 

Hunter Melville:

We were one of the few people that actually making a profit. So we went down to Philadelphia and some investment bankers, made a book to pitch These guys were looking at their Blackberrys, and saw the market crashing right before their eyes. Which was a blessing for us. We’re really happy that we were approached a few years later when the dust settled, by Carl Shepherd and Brian Sharples.

Dave Bollinger:

We (the companies) were in Depoe Bay, and Brian Robb happens to mention, “Hey, I got this call from Austin Venture Capital.” I said, “Yeah, they want to make a pitch. I invited them to come out and give their dog-and-pony show.” He said, “Yeah, OK. Whatever.” And that’s when we met Carl Shepherd and Brian Sharples.

HomeAway Acquires Dozens of Vacation Rental Businesses and Airbnb Creates a New Category

Brian Sharples:

I’ve been more or less a career entrepreneur. Prior to HomeAway, I was a public company CEO. WPP, which was a large European conglomerate out of London run by this guy, Martin Sorrell, wanted to buy it. So we sold the company. And I made decent money in that transaction, and was a bit burned out from building that company over 10 years. And so, my wife and I and the kids decided to do some traveling for a couple of years. When I grew up, my family had a small cabin vacation home in Maine. I always loved staying in houses. I thought it was better for the kids.

Well, so we’re traveling, and I wanted to stay in houses in many of the places we were going. And while there were sites like VRBO in the U.S., and even that, I wasn’t sure I really trusted very much because it was just this basic listing site. There wasn’t a lot of data. There weren’t reviews, anything like that, that would give much safety and assurance. When it came to looking for properties in Europe, it was a whole other kettle of fish, meaning I had no idea what sites to trust or not trust. And you’re making these transactions very far away. And so we did rent houses, and we had a great time. But I found it was a lot of work.

When we returned from that journey, I felt like there was something here that could be pulled together on a global basis to make it easier for people like me to find these places. A lot of people don’t know this story, but prior to starting HomeAway, the first thing that I attempted to do in 2003 or 2004 was something very similar to Exclusive Resorts. So this was about the same time Exclusive Resorts (founded in 2002) was getting started. But there was a company that I started called Elyseum Partners. And Elyseum was essentially going to be a partnership where we got 30, 40, 50, 100, or 200 people to essentially buy into it, and then use that money along with debt to go out and acquire vacation homes all over the world, so that we would have 100 spots that people could travel to. And actually I did quite a bit of work on it. I was living on a ranch here in Austin at the time, and we converted a barn into an office. 

There were a lot of friends and family working for this, as well. My brother, Cliff, was part of it. And we started pulling this thing together. We started bringing in money from partners. And the more I looked into it, two things were happening. As I was doing the research for this business, I kept coming up against this notion of, “Gosh, do I really want to have 100 places when there are probably tens of thousands of places that you can possibly rent?” And so at the same time, I’m looking at VRBO and different sites around the world. Prices at that time were fairly elevated on a historical basis. So in a lot of the places we were going to buy houses, it felt like it was the top of the market. And I started to get worried that it may be the wrong time to start that business because if we took on debt and bought all these houses, and the market ended up crashing, the thing was going to be a disaster.

And so ultimately through that process, even though we did a ton of work on it, I switched at some point, probably late 2004, into thinking, “You know what? I think the rental market is a safer bet. It’s probably a bigger business. I’m going to look into doing this.” Austin Ventures (which was an investor in public company Intelliquest, which Sharples ran in the mid-to-late 1990s) had been constantly asking me over that two- or three-year period, “What do you want to do next? We’ll fund anything you want to do.” 

And I said, “Look, I think there’s an opportunity to build,” and the exact words I used was, ironically, “the Expedia of vacation rentals. I don’t know how to do it, but I think this market’s very big. And it’s global, and nobody’s doing it on a global basis.” And they said, “Well, look. We will commit, with no business plan, $50 million to you, to go figure that out.” And in fact, they issued a press release at that time, this is late 2004, that said essentially, “We’ve given Brian 50 million bucks to start a business. We don’t know what.”

And the basic idea that I pitched to Austin Ventures was, “We’re going to put together a team. We’re going to start from scratch. And we’re going to do this better than anybody else. And as it turned out, as I was researching all of that, a few things kept coming up. And two deals in particular, as I went out in the world and talked to people in the industry, kept getting mentioned to me. One was a company called VacationSpot. And the second one was ResortQuest, which was a roll up that was done in the property management space. And both of them were considered to be massive failures for different reasons. I was most interested in ResortQuest because, as I talked to people about this, they would say, “Well, listen. What you’re talking about doing is exactly what these guys tried to do. It had massive backing from Expedia, who bought it. And they bought it, and a year later, the thing had disappeared.

And so I looked up who was the CEO of Expedia at the time. And I didn’t know Rich Barton. I had never been in the travel business. But I found Rich, and I found his number, and I got his email, and I called him. And he said, “Hey, listen. I’m happy to sit down to talk with you. In fact, I’ll pull in a couple of the guys in Seattle who used to run VacationSpot. And let’s sit down and talk. And so I went out and flew out to see Rich. And he told me the story of that company.

VacationSpot at the time, it was only about a year-old company, I guess, when Expedia bought them. But it was doing quite well for a startup. I think it had a million or two in revenue. They paid a ridiculous price for it, I think, even in today’s terms. I think they paid all almost 80 times revenue to buy that company. VacationSpot basically started as a much h more user-friendly version of VRBO and was making headway against VRBO. And my big question to Rich and all those guys was just, “Why did this thing fail?” And there were really two reasons that they gave me. One was that Expedia was in the hotel business. They were used to taking 15% commission on every booking. And so they bought this company.

And the idea was simply, “Why shouldn’t this work like the hotel business? We’re going to take this site and all the customers, and we’re going to flip them to online booking.” And they actually did that. Then guess what? They lost most of their customers. And that’s when I started to learn things like these homeowners didn’t want somebody else to have control over their bookings. Back in those days, homeowners were really concerned about who was staying in their houses. And so the model that they vastly preferred was this very simple VRBO model. “I pay a price. You bring the demand. I decide who gets to stay in my house. I get to talk to them. I do the booking. I don’t need to give a commission to anybody.” So that was one reason that it cratered. And the second reason it cratered was frankly because, at the time, the hotel business at Expedia was going so gangbusters that Rich just kind of said, “It was a sideshow. And we would literally take some of the best developers that we’d acquired in that deal and put them on the hotel business because that’s really where the money was being made.” And so I think it was also is sort of a focus issue.

It was a huge meeting for me because I was convinced the way to do this was with an Expedia-like model. And I came out of that meeting and said, “Wow, maybe VRBO and everybody else who’s acting like VRBO around the world has this right.” And I had hired Carl by then. So Carl came in very early. As soon as I understood that acquisitions were going to play a role in the business, I had asked Austin Ventures, “Do you know a great M&A guy?” And they said, “Well, we know this guy, Carl Shepherd. He comes out of the publishing world. But he’s done 70 or 80 acquisitions in his life. He’s really good at it. He’s kind of the yin to your yang.”

We had cup of coffee at Starbucks and the both of us went ahead. And I remember there was a point at which Carl and I were sitting in a room trying to figure out how we’re going to do this. “Are we going to build it? Are we going to buy? Are we going to do online booking? Are we going to keep this a simple classified model?” 

And I remember walking up to a whiteboard and just writing on the whiteboard, “Number of listings, times revenue per listing, equals success.” And we looked at that board. I said, “Carl, in the end this is about market share. The more listings we have, the more buyers we’re going to have. The more buyers we have, the more listings we’re going to have. We need to go consolidate this business. I still want to build the best platform out there. But it’s going to take us years, and years, and years to acquire the properties on our own. And if we go on a global acquisition spree, we can get the properties together. We can get the traffic together. And then we can work on making the experience better for everybody. And then there’ll be a great business here.” 

And by great business here, I don’t remember at the time, we thought maybe someday we’ll build a $100 million revenue company. Still at the time, we didn’t have visions of doing a billion or two in revenue. And so that was really the genesis of the business. 

And I said, “Listen, let’s start in the U.S. Who are the biggest companies in this business? It’s GreatRentals. It’s A1. It’s VRBO.” And so we started calling all those guys. Most of them weren’t that interested in talking. Those guys at CyberRentals used to literally just get in their car three days a week and drive around New England, and put their brochures in different travel spots, and road stops, and things like that. They were something else. But so what comes up in talking to all these guys is not only do these guys know each other, but these guys have meetings at least once or twice a year, where the four of them … This was A1, GreatRentals, CyberRentals, and VRBO would get together with their wives for a long weekend, talk about the industry. They had created a little consortium called 

Really the purpose of was the realization that some properties were listed on multiples of their sites. And those owners to, if they wanted to be on all four of them, didn’t want to manage four different calendars. And so was a little consortium they created with a calendar tool that they all agreed to use so that if one calendar was populated on one site, it was populated on the other.

And so it turned out that, at almost the time I was calling all these guys trying to get meetings, it might have been Dave Clouse from VRBO, I don’t recall, who specifically said, “Well, we’re having a meeting in a couple of weeks in Oregon, on the coast of Oregon. And if you want to come and make a pitch to us that might be a great time to meet us all.” And I’ll tell you, at the time, we still had no idea how big any of these companies were, whether they were profitable, nothing.

And so Carl and I drive out to this spot. And we’re there for a day. And one of the first things that happens is we meet the wives and all the guys. And they loved to play poker together. So they were playing poker the night before. They were maybe a little bit hungover. And the first thing that I did is I made a presentation to them. We actually brought a little projector, and I had a PowerPoint. And the presentation was essentially my vision for what, at the time, was called WVR, World Vacation Rentals, to consolidate this industry not just in the U.S., and globally. And the point I made to all of them was, “It’s not a question of if this is going to happen. It’s a question of when it’s going to happen. Because it’s happened in the hotel business, and travel by nature is an international business. And so I’m going to build this one way or another. We would love for you guys to be part of it. And I think you can make a lot of money doing it.”

And so we went through the whole pitch. And at the end of the pitch, they all kind of huddled and then came back into the room and said, “We’ve decided that we can’t really agree on anything jointly. But we will all take individual meetings with you out on the lawn.” And so, one at a time, Carl and I met with each team. And in those meetings, they told us what their growth rates were, and how much revenue they were doing, and what their profitability was. And frankly, we were kind of shocked because they were all growing very fast. VRBO at the time, maybe 70 to 90 percent per annum. The other sites, 30 to 45 percent. Every one of these companies was profitable with margins in the 25 to 30 percent range. And if you added them all together, it was a pretty nice business. 

As it turned out the end, Dave Clouse decided not to sell. And of course he was the market leader. He was sort of the ringleader of this whole group. But the other three companies did. And I think, in part, because they were worried, even though they were friends with Dave Clouse, they were worried that Dave Clouse was quickly eating their lunch because, like in any of these marketplace businesses, the first mover, the biggest company, is the one that creates the most momentum.

 I had this $50 million dollar commitment, right? But we still hadn’t actually formally closed it as a Series A. We put those purchases together of the first four companies, and then we closed the Series A to pay for those acquisitions and have some operating capital. And that round, I believe, was about $32 million. So probably those four companies in total cost $28 million, something like that. It was roughly high twenties. 

But we were able to, through those initial acquisitions — and then with another one very quickly, a company in Europe called Holiday Rentals — we were able to build an inventory base that was essentially as big as VRBO. And listen, I tried everything to get Dave Clouse to sell because that was sort of the marquee property at the time. And he just said, “Listen. Maybe someday, but I’m not ready.” And we decided, “Well, listen. Let’s just keep in touch and be friends. We’re obviously going to be competitors now. But I’d like to keep this spirit of working together. We’d like to keep in place. I’ve run a public company before. You can call me anytime if you want to talk about things related to your business, or employees, or putting equity programs in place,” which he didn’t have at the time for his people.

Carl Shepherd (R) spoke at Skift Global Forum in New York City in September 2021.

Carl Shepherd, Co-founder and Chief Operating Officer, HomeAway, 2005-2015

Carl Shephard:

In 2003, we had sold a company that I was the COO of called Hoover’s Online to Dunn and Bradstreet and I was going to retire for a couple years. I had friends at a firm here in town called Austin Ventures, a large venture capital firm at the time. They were working with a guy named Brian Sharples and Brian had also been a guy who sold his company IntelliQuest to WPP and he had taken a two-year sabbatical after that and had done a lot of traveling with his wife and his three kids. But he came back to work. Austin Ventures was going to invest in Brian as a CEO and they were looking for something to invest in, so they asked me — because I didn’t want to work fulltime — to come and just help Brian evaluate businesses that he was looking into.

The business that they had him looking at was horrible and he didn’t like it a whole lot. And we were talking, at Starbucks one morning, why I didn’t even want to go to Houston to evaluate this. It was just a bad fit for him and why would you do this?

I said, what do you really want to do? And he said, “Well, I’ve had this idea about it,” and Brian had done, on his own nickel in that two-year sabbatical, he had been traveling a lot using vacation rentals and he had done something and he had pulled it together. I believe the name of it was Elysium, and this would’ve been in 2002 that he did some market testing. It was going to be what Steve Case eventually did with Exclusive Resorts with a couple of twists on it, but Steve Case beat Brian out and Brian put that on the shelf. But in the meantime, he’d done $100,000 worth of market research into vacation rentals and he had done a lot of market testing about the viability of the business and he said, so that’s really interesting to me. And I said, “You know what, I have to travel using vacation rentals. It’s really, really, really hard and because my kids are so spread out in age, I really have to have three bedrooms.” We left that meeting in 2004 and we said, “No matter what Austin Ventures is finding, let’s spend some time and I’ll come in and work 20 to 40 hours a week, depending on the time and we’ll find a niche in vacation rentals.”

And the niche we decided on was that we were going to use a sort of hybrid model where our company would cover the 50,000 most interesting vacation rentals in the world and you would be able to book them and we would take a commission for booking the properties, but it would be something because for vacation rentals at that the information was still spotty. 

So we put together the plan. Austin Venture says, “Go. This looks like something. Put some more meat on the bones.” So we’ve decided in 2004 that we would rent, or license, the content of several vacation rental websites that we found, which we thought were pretty bad. I mean, with all honesty, we knew about CyberRentals. There were lots of little sites, but we thought, we need to have answers. So even if we didn’t cover a house in Dubuque, Iowa, we needed a vacation rental in Dubuque, Iowa in case someone searched on our site for Dubuque, Iowa. As it happens, we identified four or five websites in the country that we wanted to license from and we thought if we licensed from all of them, we would have the largest collection of vacation rentals online. 

We met a guy named Brian Raub, who recently died, and Brian Raub and his wife Lisa, had a site called A1 Vacations in Smith Mountain Lake, Virginia. And Brian was a Harvard MBA, a really smart guy. So finally we get ahold of Brian and we give him our pitch and he says, “Well, I’ve got three friends that own CyberRentals, Great Rentals and VRBO and we meet once a quarter to spend the weekend and play poker, and we’re meeting in two weeks, or less than that, in Depoe Bay, Oregon for our quarterly meeting. So would you guys like to come? Let me see if I can get the other three companies to let you come.”

So Brian and I went to Depoe Bay, Oregon. Brian made his presentation about what we were doing and why licensing their content made sense to us. Now you have to understand that this was May 2004, and you have to really understand that we didn’t believe these companies could be real. They were very small. They would have like 10 employees. They weren’t sophisticated. VRBO was the least-sophisticated website I’d ever seen in my life and this was in 2004 when everything was new. CyberRentals was very, very, very badly done. Great Rentals was really well done. The guy who did that was a guy named Jan VanVoorhis, and his wife Pat. Jan had been the programmer for the East Lansing, Michigan School District, so he actually knew how to code. So he had put his site together and it actually held together and had decent technology. They might have been lifestyle businesses, but we didn’t believe they could make money. So we meet with them. 

Brian makes a pitch and I noticed that Lisa Raub of A1 Vacations is beginning to tear up. I asked later why she was crying and it was because Brian had started his presentation saying, “This is who I am. I’ve been the CEO of IntelliQuest. This is Carl Shepherd. He’s been the chief operating officer of Hoover’s Online. We’re backed by Austin Ventures. We’ve raised $50 million and this is what we plan to do. We believe this is a business that needs to be organized online and so what we’d like to do is talk with you about what our vision is and see how we can work together.” And that made her start crying because, and she told me later, she realized that it had been found and the industry would never be the same. And I thought that was pretty cool, in hindsight. So we made our presentation. They were all lovely people and one of the guys, Jan VanVoorhis at Great Rentals said, “You know, I’m getting towards retirement age and I’d kind of like to sell my business. Would you like to talk about it?” The other three guys said, “You know, maybe we should talk about our businesses …

So one by one, we’d go out in the backyard of this vacation rental in Depoe Bay, Oregon against the backdrop of the Pacific Ocean, the wind blowing off the ocean because the only private place in this house, is the middle of the backyard. And one by one, they would talk to us about what they did and how much money they made. I’m not going to give away too many confidences. But they’d say something like, “Oh yeah, our top line revenue’s $3.5 million and we take $3 million out of it … or our top line is $11 million and we take $10 million out of it.” And Brian and I are just looking at each other going, holy shit. They are real businesses.

And at that time ResortQuest, the biggest vacation rental business in the country, estimated in writing that there were about 250,000 vacation homes under management in the United States. Well, if you added up the number of homes on VRBO, CyberRentals, Great Rentals, and A1 Vacations, you got to 100,000 quickly. And I thought, “Nobody knows how many of these homes there are.” We leave Depoe Bay and we’re driving down the highway back to the airport. Brian pulls off the highway. This is May 2004. He stops the car on the side of the highway. He looks at me and says, “Carl, let’s just buy those guys,” and that’s it. We went home to Austin. We prepared offers for all four of them. We emailed them out. VRBO was the only one that said, “No, I’m just not ready to sell yet,” but everyone else was ready to sell. So we turned, went to Austin Ventures and said, “There’s a slight change of plans. We want to use the money to buy our way into vacation rentals. If we buy all three, we will be the same size as VRBO and we’re more sophisticated and we should be able to beat VRBO.” That was the kind of hubris we had.

Well, turns out that we didn’t know a lot about marketplaces. We were all learning back then. We didn’t know about the network effect. We didn’t know about how marketplaces were built. VRBO just had a head start that was pretty much insurmountable and proved to be insurmountable for years. Austin Ventures said, “Yeah, you could do that.” We then did negotiations. These were tiny little companies and it took us a long time to get them purchased. In the meantime, as we began negotiating these simultaneous transactions, we met a company called Holiday Rentals in London, and this was in late 2004. Holiday Rentals was run by the Richard Coundley and his wife Marcelle Speller. They were doing the same thing in Europe.

The difference was Richard was a technologist and there actually was technology behind Holiday Rentals. It wasn’t smoke and mirrors. It was real and it was in Europe and so Brian and I looked at each other and said, “Well, travel’s a worldwide thing. Let’s make Richard Coundley an offer.” So we made an offer to buy Holiday Rentals with the idea that would be the platform into which we poured all the other content, and we would just make it bigger. We would be instantly international if we buy this. So we ended up negotiating through the fall of 2004. It took us a long time because these were little, privately held companies and there were no books and records. You had to build financial plans.

Dave Bollinger:

They gave us the pitch that they were going to consolidate this whole area, and they felt us out to see if we were interested and so forth, and it sounded pretty good. It was a good pitch. We had had some other little ones before here and there, but we were making money. I mean, we were rolling in revenues and we all thought it was a great thing. We all sort of agreed, except Dave Clouse was hesitant. He had relocated his group to Gardiners Island off of St. Thomas. Some kind of maybe tax shelter-y thing. 

Hunter Melville: 

We saw the writing. We were the first group to agree to do a sale in 2005. We saw VRBO with its technological ability. They were going to surpass us pretty quickly, so we decided to get out while the getting was good.

Jeanne Dailey, founder and CEO, Newman-Dailey Resort Properties, a real estate and property management company, starting in the mid-1980s in Destin, Florida, and she launched in 1997:

What really ended up putting us on the map and giving us a lot more exposure was unfortunately hurricane Opal, which hit in 1995. And so when Opal hit, it devastated our sand dunes. So we had properties that were on the beach, town homes on the beach where that whole outside wall was gone, and you could look in and see a picture hanging on the wall and a chair and a corner. Yeah. But we got national news and national exposure, and it also made people see our beaches because it was on the news, and it’s the closest you can get to being in the Caribbean and still be in the States and drive here. So that gave us a lot more exposure.

Then of course, I think we built our first website and launched it in 1997. And so launching the website, of course, in the past, you’d set up your marketing plan for the year. And we’re building a database. We’re building an owner list and things and expanding and growing. And the brochure is still going out, and it’s getting bigger and thicker as we increase our inventory, our portfolio of units. And then with the internet, it gave us obviously an expanded marketplace. At the same time, I think, VRBO launched. And in Florida, they took away the licensing requirements to manage vacation rentals. So at the same time that Opal happens, the internet comes up, and the state of Florida removes that barrier to entry.

There weren’t really any other distribution channels. So we would use organic primarily. I mean, pay per click wasn’t even really a thing then. So I had a really good web developer who I utilize now, and his previous boss helped us get a good URL, which was We started to just build that. Instead of one photo in a brochure, it might allow for 10 photos then, but 10 was way better than the one. 

And at this point you didn’t even have online booking. You were just barely starting to take credit cards instead of waiting for checks to come in and clear.

Oh, online booking because I wasn’t sure about that at first. Where you placed your ads, you could control who your demographic was, and you could also vet by having the phone conversations with people. Are they bringing in 20 or 30 people into a two-bedroom like they do now? We were able to do a little more screening. Although you can’t discriminate, nor did we want to, but we wanted to make sure that we had three adults and three children staying in a place like they said.

Well, it was difficult at first, but I think one of the main things you’ve got to know about this industry is that it’s exciting because it’s very dynamic. I mean, it’s changing all the time and you’ve got to be willing to pivot and change, and you got to change your mindset. It used to be, like I said, years ago, we would put together our brochure. We’d send it out in January. Our reservations would all start rolling in. We’d supplement with some classified ads, and we had our classified ad plan going. And you’d put some ads in some specific magazines, and you didn’t think about it anymore, really. The internet changed all of that, and VRBO was a very difficult new setup and competitive market set for us. And so it was very difficult to transition your mind from only professionally managed vacation rentals to anybody and their brother can be managing vacation rentals.

So I think at first, it took a lot of us time to change our mindset. I mean, it’s a paradigm shift, so it was a big change for us. And then when Carl bought our software (Instant Software) in 2010 we were really worried like, “Oh my God, what are they going to do to us?” There was just a lot of negative energy. Everybody was worried, “Oh, they’re going to own our technology,” and that kind of stuff. And from my perspective, I thought, “You know what? If he’s got that kind of deep pockets this is going to be positive for us because he’s going to increase the exposure of the industry. HomeAway started an advisory board, and to their credit, they helped us stay involved and they listened to ideas that we had to make the mouse trap better.

Jon Gray at Skift Future of Lodging Forum 2022 in New York City

Jon Gray started at what would become HomeAway as a contractor in 2004, and was chief revenue officer when he left in 2017:

In 2004, I graduated from MBA school and went to work in an internship at a company called Austin Ventures, which was the preeminent VC in Austin at the time. The third project that I worked on for them was with Carl Shepherd and Brian Sharples on this company that, at the time, I think it was called CEH Holdings. It then became WVR Group and then ultimately HomeAway, but initially we were looking into should we build a vacation rental website. I guess I was a contractor to start with, then I was a marketing analyst. Then I think 

I had 13 different jobs over my time there. Ended up being the chief revenue officer after we went public and then through the sale to Expedia. 

We had a normal, one-story office in south Austin that nobody was all that excited about. I do remember we hired senior people first, with exception of me. This office probably had 24 offices in it and a bullpen of cubes. I was sitting in a cube. It was just a regular industrial park office.

Nothing special, nothing good, but it also wasn’t bad. I’d say the one thing we had was a ping pong table, as is the thing for internet startups, certainly at the time. We all got very good at ping pong. We had tournaments every Friday. Then we started growing so fast that the ping pong room became my office for a while.

It’s funny because people have asked me many times, “What was the most important time in the history of the company, HomeAway? Is it when you went public? Is it when you sold? What is it?” Without question, for me, it’s the November day in 2006 when we bought VRBO, because that’s the thing that gave us the scale, network effects-wise, that made this into a big business that was capable of going public, that was capable of being a multi-billion-dollar marketplace.

One story that I think was funny and par for the course at the time was when we were doing the due diligence on CyberRentals, We asked for them to send us their accounting system and they sent us a box full of papers. These papers had the length of time of the listing, how much had been paid, and also comments on the owners. The comments were colorful. I mean, they were hilarious. I don’t remember them offhand. Put it this way, there was lots of curse words and stuff like that. It was just like, wow, this doesn’t feel like a professional business to me, but at any rate. Mind you, I was a 21-year-old kid just out of business school. Anyway, they send this box. Early in my career, my big thing was I would never be outworked. Right? They sent this box. Over the weekend, I went through 20,000 records and built an accounting system for them in Excel off of this and turned it into Carl on Monday morning. Yeah, in a weekend. I turned it into Carl Monday morning and I think he was impressed, so it was good. Yeah, it worked out well, so I ended up working there.

Carl Shepherd:

So we hired a guy named Jon Gray in 2004. 

Jon was a 21-year-old recent MBA. He’s a brilliant kid, graduated from the University of Texas in two-and-a- half years and got his masters, and so he was baby. We hired Jon and Jon was doing stuff like… CyberRentals doesn’t know how many customers it has, so therefore, OK, CyberRentals, why don’t you print out on paper every listing you have and mail it to us? So we got 40,000 pieces of paper over a weekend and Jon Gray organized them into subscription buckets so I could see how many subscriptions were going to expire in one month, two months, three months, four months, five months. We needed to do an expire table for all of these companies A regular, normal expire table. The expire table should be a nice, beautiful, perfect umbrella. And it was an umbrella, but it was skewed to the right, which is the best kind because it’s growing so rapidly. All of them were growing. But to see that, we had to put them together ourselves. It took a long time to put the data together.

We do all that during the fall of 2004 and we are ready to close simultaneously on February 1, 2005, and that day we closed on four of the companies, CyberRentals, Great Rentals, Rent 101, which we instantly closed down, and Holiday Rentals. Rent 101 was a professional property manager website run by a woman named Mary Song, and the problem was that professional managers were leery of the web because they’ve been screwed so many times by other people coming, trying to get them on. We didn’t know any of this. All we knew is that any site that had professional managers on it, wasn’t growing, and sites that were building organically like the rent by owner sites, were growing anywhere between 50 percent year over year and 100 percent year over. We couldn’t get A1 Vacations done, but got it done the next day. We started that morning with nothing, and we ended that day with $40 million in revenue and about $36 million in cashflow. I’m not quite ready to say how much we paid, but it was under $50 million for all of them.

Something HomeAway discovered very quickly is that, if you asked our travelers what they preferred, a professionally managed property — we called it property managed — or properties from the owner, of the 55 percent who expressed a preference, 80 percent wanted the owner.

We announced the formation of HomeAway in the summer of 2005. We did not announce that we bought the other websites, we made no announcements. We needed Cyber Rentals, A1 Vacations, Great Rentals and Holiday Rentals all in one place. And that took us until June to get it done. The other trick to the history, was that Great Rentals, A1 Vacations, Cyber Rentals and VRBO had entered into an agreement. The reason they met four times a year, is they each own 25 percent of an organization called was the calendaring system and rates system that allow those four websites to tell an owner that, if you were a member of, you could keep your calendar and your rates in one place and all four websites would be able to publish them.

So we were in bed with Dave Clouse of VRBO because we were three quarters of So Dave and I became friends, and he’s a very nice guy. He and his wife Lynn, moved to the Virgin Islands for a while. Dave is an evangelical Christian guy, hates paying taxes. So he moved where the tax rate was low, and to his credit, he would have his accountant do his taxes both ways, as if he was a Colorado resident or if he was a Virgin Island resident. And the difference, he would then give to his church. So he would pay his taxes, but he would give it to his church. And then they would go around the world, and he built churches all around the world with this money. He would go to Guatemala. He goes to incredibly different places and builds churches. And that’s what he wanted to use his money for, to change the world his way. 

So he was a nice guy. The problem with that was, it was something that any company coming in to buy VRBO would’ve found a nightmare. 

In 2006, we were in the process of buying Abritel in France. We had already bought FeWo-direkt in Frankfurt. We were trying to buy Holiday Lettings in London. Steve Kaufer at Tripadvisor bought that. That was two college boys from Oxford, and they thought they were going to end up running an empire, and I kept telling them during the negotiations, you’d be far better coming to join our team than Tripadvisor. Tripadvisor doesn’t elevate people, it consumes them. But they sold to Tripadvisor and we left it, that one got away.

HomeAway acquired Holiday Rentals in 2004, at the same time that it was buying most of the U.S. companies in, and Holiday Rentals became an important building block in Europe.

Brian Sharples:

I do think it is an important part of the story is that the fifth company that we bought in 2004, our first acquisition in Europe, was a company called Holiday Rentals. And we acquired Holiday Rentals, in part because it was a great business and they were industry leader in the UK. But in much larger part, they had the best technology platform. And it’s funny, there was actually a HomeAway reunion a week ago. And I was talking to Jeff Hurst (currently Vrbo COO). And a couple of our original developers were there. And there’s apparently still pieces of code in that system that come from Holiday Rentals.

So we did leverage their software quite a bit. They were the first ones who really figured out how to do a kind of Expedia-like version well in this industry. But listen, as we acquired companies, every one of them had a different pricing structure. Every one of them obviously had a different software platform. Every one of them had a different set of arrangements with customers for how things like sort order would work. Every one of them had different dashboards for their owners to interface with. And so there was a point, and I would say it was probably in the pre-IPO, but probably in the 2008 or 2009 timeframe, where we decided we have to really commit to integrating all these platforms into one system. And I think that we probably, by late 2009, had almost 200 employees just working on that full time. Just working on getting sites transitioned over to the new platform. It turned out to be extremely difficult and a real technical challenge. And our tech team at the time had to invent some new processes to really make that go smoother than it otherwise would. It would take us at least six months per site to do this.

Aurelie Lepercq, HomeAway European Program Manager starting in 2006 and other roles through 2013, and CEO of Edge Retreats starting in 2018:

I remember when I was a kid, we used to use vacation rentals in Corsica with my family in the summer. I’m originally from France. And so vacation rentals have been around forever. I remember back in 2002 maybe, — I had joined Opodo in 2000 pre-first employee — we tried to work out how to onboard, I think it was cottages at the time, to Opodo. But we just didn’t have live availability really, and things like that.

I left Opodo in 2005. Then I took a year off, went traveling, which I’d never done after my studies at uni and came back was offered a number of roles. I remember I had five roles on the table, of which one was from an unknown company called Holiday Rentals. 

Yeah. It was in the UK and they had just been acquired to form part of that original story of HomeAway really. So I joined as European program manager at the time and yeah. 

HomeAway was starting to make acquisitions. So there’s a whole project around internationalization of the business, which I took charge off as well as onboarding the many acquisitions that we did. We did 19 in the seven years I was there. I had worked at Opodo before and I had seen make a number of acquisitions, which they immediately integrated into the central platform and killed the brands basically. Whereas HomeAway was very different. We tend to acquire and let the brands live. 

So we didn’t really do those kinds of technical integrations very early on. However, the Holiday Rentals platform was used to internationalize the HomeAway brand. So the platform of Holiday Rentals was used in order to have a HomeAway site in Spanish, Italian etc. I think we had eight European languages and I was leading that project to internationalize the brand. So we didn’t quite initially do that integration, but it came after that. And another very clever approach there, what we did was to build a central library of properties, and we’d build connectors and plugging in to and from the various acquisitions we made over the years. 

After VRBO Rejected a HomeAway Attempt to Buy it in 2004, HomeAway Acquired VRBO in 2006

Brian Sharples: 

And so Dave and I would, for about a year and a quarter following that initial meeting, we would talk at least every quarter. And in fact, we did help him put an equity plan in place for his employees. And then it turned out about a year and a quarter down the road, one day I got a phone call from him. And he said, “Brian, I’ve decided to sell the company. I want to sell it to you. This is my price. It’s non-negotiable.”

Carl Shepherd: 

Dave Clouse calls one afternoon, and he says, Carl, I’ve been thinking, I’m not sure I’m going to want to do this much longer. Would you pay me $x for my company? Yeah Dave, I’ll do that. Let’s do that. We talk for a few more minutes. I hang up the phone, I walk into Brian’s office and say, Brian, I have good news and bad news. I just bought VRBO for $x. I have a deal to buy it. Bad news is, we don’t have $x. We don’t have any money. I’m about to spend every bit of money we have on Abritel, and it’s not enough. We need to go raise money. That was in early September 2006. 

So Brian calls up his friends, venture capitalists, we put things together, and we finally got VRBO. This is what we’re paying for it, and in two days we had raised a lot of money. We closed on November 6, 2006. And that was relevant because of all that record keeping that VRBO had not wanted to do. It was in about five different LLCs. It was so fragmented. We were thinking at that time that we would be needing to go public at some point, and we had to have three years’ worth of financials. So we had to hire a company to go and do forensic accounting and put together three years’ worth of GAAP financial statements, for a company that had never done anything but file a tax return. 

On the day we bought VRBO, we took their 35 employees in, because they were doing customer service mainly, but we didn’t have to hire another person. Every bit of profitability of VRBO fell to our bottom line on the first day after closing. So putting all of these companies together, we had this incredible reach, which then put the network effect on steroids, and we just started growing like crazy. And we grew like crazy after the VRBO acquisition and had planned to go public in 2008. The S-1 was in a drawer ready to be filed and the bus came. We pulled it back, and instead, we raised money from Woody Marshall’s group, TCV. That was a public announcement. That was a $250 million investment. And that was to take us through our period of growth until we got to the other side to come out with the public offering at some point in the future. But at that time, by the time we raised the TCV money, we had raised a total of $450 million to put the industry together.

Every one of the companies we bought were subscription businesses. They were all the same business. I get all these accolades for being able to buy and integrate these companies. And I tell people the truth: I bought the same company basically 20 times. And the reason that’s important is that I think it’s critical for people to understand that a market will tell you what it wants, right?

Brian Sharples:

Yeah. And so the patience ultimately paid off. And then I had to go out and raise, I think at that time it was a $160 million Series C to be able to pay for it. We raised 160. But no, the price was … It was lower than that. I want to say it was $130 million probably. Those acquisitions were very important to get going. It turned out that there was a lot of brand loyalty that all of those brands had in the marketplace. It was a year later in 2006, we launched the HomeAway platform. And I suppose at the time we could’ve collapsed all those little sites that we’d bought. But as we started doing A/B testing on that, we found that in New England, for example, there was an incredible amount of loyalty to the CyberRentals brand. They had great brand awareness in that part of the country. And GreatRentals had fantastic brand awareness in Florida, in particular. A1 Vacations had sort of its own swath in the Carolinas. And so it took us many years to slowly wean off of those sites. 

And frankly, at the time, Google wasn’t as smart as they are today. We found it advantageous to have what we called a shelf space strategy, which is HomeAway was the brand that we were pushing and marketing. But if you went into Google and searched for vacation rentals, you might see VRBO, HomeAway, CyberRentals, A1 Vacations, and GreatRentals as the top five companies. And so we were virtually guaranteed 99 percent of the vacation rental traffic in the United States. Now eventually we had to get a lot more clever about it because Google started penalizing people who had the same content on multiple sites. 

I don’t know if you’ve heard this whole history. But VRBO was, in addition to being a hot company, actually a quasi-religious organization. Dave Clouse was a member of a church in Colorado called The Church of the Nazarene. They don’t drink, for example. They don’t swear. I had never heard of The Church of the Nazarene before. Every single employee in that company was a member of that church. So when I acquired that company, 53 out of 53 employees and contractors were members of The Church of the Nazarene, which became, I wouldn’t say troublesome, but there were some cultural issues with that along the way. At the time of his call (offering to sell VRBO), and the reason I mentioned the church, it was all about him saying something like, “We like you. We like what you’re doing. You seem to treat your people well. You’ve got good ethics. You’ve treated us really well as a competitor. We will only sell to you. But here is the price, and it’s non-negotiable.” Dave is an honest guy.

David Clouse: 

I think our head count upon sale was closer to 32. Probably 75 percent of the employees were either existing or former members of that church. Many, but not all of the rest, held similar Christian values. My Dad was a pastor in the Church of the Nazarene and I was raised with those values. The Church is small and not super well-known, but it is worldwide in scope, not just in Colorado, with about 2.5 million members. 

At VRBO, we prayed for each other’s needs and we prayed for our clients when we learned they were going through hard times. We tried our best to treat everyone by the golden rule. When it came to hiring, we never advertised for new hires, preferring to promote from within, but when we needed new employees, we put out the word to our existing employees and they recommended those that they knew, many of whom just so happened to be those from their churches. Most of our programming staff came from contacts I had made while working at United Airlines/Covia/Galileo.

I will say that our staff was very loyal, and we had almost zero turnover. They loved the flexible hours and being able to work from home (long before Covid made that necessary). I suspect that many of the cultural issues Brian alluded to were also based on the fact that HomeAway had an office-based culture and VRBO employees were not used to that, preferring the flexibility of the work at home culture.

Brian Sharples:

I think in the United States, the VRBO acquisition was critical for us. In fact, when I look back on it, if we had the opportunity to only buy VRBO I think the company would be in the same position it’s in now. Because I did realize pretty early on that in a marketplace business, having the biggest and most complete marketplace was the most important thing. And when Dave wouldn’t sell, initially I was pretty depressed about it, I have to say. Because I felt it was essential for us to take that leadership position. We ended up stringing together a group of companies to get us to the same place. But still, that was one brand versus an acquisition of many. So I think, I think that acquisition was a critical company.

And when it comes to the naming of it (HomeAway), the biggest reason why we didn’t go with the VRBO brand instead of HomeAway was simply because V-R-B-O stood for Vacation Rentals By Owner. And at the time that we bought VRBO the — no pun intended — religion inside of that company was that they don’t work with property managers. They were all about owners. And my very simple philosophy was, If you’re going to build the world’s biggest marketplace for consumers, you’re going to have to have both. Because half the market is property managed and half the market is not, and we’re not going to give up half the market. And so that is why we brought in a marketing firm and came up with a new name because everybody knew that company as Vacation Rentals By Owner. And we just had to get away from it as a business.

Simon Lehmann, former CEO of Switzerland’s Interhome.

Simon Lehmann was CEO of Switzerland’s Interhome from 2005 to 2014, and served as a HomeAway board member from 2014 to 2015:

So I did business turnarounds in the past but I did, especially, financial turnarounds. Interhome was definitely not a turnaround, it was a cultural shake-up if you wish. And yeah, it was a big stretch but when you look between the lines, I brought exactly what the chairman at the time and the CEO of Hotelplan really needed, somebody with international experience and who has proven to be able to introduce change to an organization.

I rented houses with my family but always from friends and families, so I was growing up in a large family, so we didn’t go to hotels, we went to vacation rentals but we went to my auntie’s house or anybody else’s. So we rented houses but not in a commercial sense and when the headhunter called me, I said, “Are you totally out of your mind? There’s no way I’m going to be the CEO of a company that rents out shitty apartments in the Alps with sticky carpets and smelly curtains and stuff like that.” And then he said to me, “Go and have a look at it,” so I did and I was like, holy cow, this business is big, 20,000-plus units, 24 different markets, that’s incredible and I’d never heard about Interhome before.

The founder and the owner sold the business 10 years prior to Hotelplan. It was the largest tour operator at the time in Switzerland. They were massive internationally. The history of Hotelplan is quite incredible, they even had a travel agency on the Queen Mary, believe it or not. Hotelplan bought Interhome in 1995 from the founder and owner, who founded Interhome in 1965 in London. So what happened was in 1995, when Bruno Franzen sold Hotelplan, the CEO of Hotelplan Group at the time decided not to put a dedicated CEO into Interhome as a subsidiary. So there was a management team of seven that were sitting there running Interhome at the time and they had accumulated 144 years of seniority. So you can imagine them all being around 20- years-old on average. They were literally running the business on their own and the CEO came every couple of weeks, had a meeting and off he went again because he was too busy with all the other stuff at Hotelplan. So they were pretty much autonomous in what they were doing. And what they were doing was obviously keeping what they have done and not changing anything that they have done in the past. A new CEO of Hotelplan, Christof Zuber, took over in 2004. He said, “I need a CEO for this,” namely Interhome. “Simon, I need somebody to run Interhome and I need somebody with international experience, I need somebody who has an understanding of technology.”

He hired me, and I started in September 2005. So I was not that welcome (among the seven people who had been running Interhome). At the same time, my first Phocuswright Conference was in October 2005 in Phoenix, Arizona. And I was fortunate enough that Philip Wolf took me by the hand and introduced me to a lot of people and a lot of very interesting things happened. One thing I can tell you: This sounds super arrogant, but this is very important to me personally. I was the one who shaped distribution of vacation rentals, together with Philip, because of the introduction. 

So in 2005, I realized there was two strange guys in Austin, Texas raising a shitload of cash to buy stuff. So I immediately reached out and in 2006, Carl and Brian came to Zurich, I picked them up at the airport and then Brian said, “I want to buy you,” and I said, “You don’t want to buy us.” He goes, “Why?” I said, “Because we’re cleaning toilets,” and he said, “What’s that?” It’s like, “We’re cleaning toilets.” Brian, said, “Oh no, no, no, we don’t do that. We’re a listing site.” I replied, “Yeah, you get it.” Carl and Brian and I stayed very close friends. Even my son, Jack, is named after Carl Shepherd’s son because, by the way, he was born during a HomeAway board meeting. My son was born when I was in Austin and my wife was giving birth in Switzerland and I was not there, so it’s quite a funny story.

And then I explained to them what vacation rental is all about, what property management is all about. Property management is about listing a site, either direct or third party, and then we manage the site. We handle keys, we do cleaning, we do bed linen, we do everything, we’re a property manager. So that’s when Carl and Brian started to understand that listing sites are a distribution arm but property management is actually the guy who delivers the shit. This is why Airbnb is not vacation rental, Airbnb’s a marketplace because they don’t do anything to the value proposition of the guest experience, and this is something that I explained to them. They wanted to have 35 percent return on cash flow and property managers do not deliver 35 percent return on cash flow, they deliver six, seven, 8 percent in terms of cash flow. So Brian’s idea is, if they buy Interhome, you can use HomeAway as your distribution and you don’t need marketing and sales and everything anymore. It’s like, OK, let’s put the proof to the pudding. 

So I said, “You make my listing bookable on HomeAway and then see how much traffic it will generate,” and they said, “Bookable, this is not possible.” I said, “Yeah but you have to make your business transactional.” Brian was on stage in Phocuswright 2008, where he said, “Well, we will not make our inventory bookable because you only want to decide who comes to the house.” I said, “Brian, this is the biggest load of bullshit you have ever said to this audience because you’ll be forced to make HomeAway bookable because if you’re not bookable, you will not get traction. On request is not going to work.” And it took him nearly six years, in 2014, where he said, “We’re going to make the entire inventory of HomeAway bookable,” so that was revolutionary, right? 

In 2011, Interhome sister brand Hotelplan took a minority stake in Germany’s Interchalet, which was roughly the size of Interhome. Hotelplan fully acquired Interchalet in 2013.

Simon Lehmann:

Interchalet was the one we bought in 2013 and one of the first things I did as a CEO when I came into Interhome was visit Interchalet founder Michael Heines. He was already in his 70s. He was one of the very old-fashioned dudes in Germany. Interchalet was a copy-paste of Interhome. Even the colors of the logos were the same. He founded the company in 1970 in Germany. So the source market was in Germany, the destination markets were the same as ours. It took me nine years to buy him. So I built a relationship with him. He always made very clear, he’s never going to sell to an American. “Never, ever.” And then he said he will never sell to one of the large, hungry corporate companies like TUI. Obviously TUI was very interested. “I want to sell to somebody who keeps the spirit and the business as it is.” And Migros (Interhome’s parent) because it’s a co-op, he trusted us that we’re not going to dismantle his business overnight. So he set the price. It was a great price. The price was not important to him. So that’s why Interhome grew to 40,000 units.

In 2007 Airbnb Created a New Category of Short-Term Rentals: Primary Homes

Carl Shepherd: 

The first time I met (Airbnb co-founder and CEO) Brian Chesky it was with Jon Gray. It wasn’t particularly memorable, just a meeting at some event. It wouldn’t have been too far after Airbnb’s founding (in 2008) that I met Brian again. Because in my belief, I needed to know everybody in the industry. I was probably the best-connected guy in the vacation rental industry. I knew everybody. And I wanted to know Brian because why shouldn’t I know him? So, the way I met him is that I called him up and I said, “I’m going to be in California.” And I thought, what do I have in common with a kid this young? So, I took my son Connor, who was 22 or 23 with me. Chesky was in his late 20s. I said, “Connor, find me a cool restaurant in San Francisco where the three of us can have dinner.” We went to this cool restaurant in the Mission, and we had dinner and that was that. I told Chesky that he wanted to know Connor because Connor’s then-girlfriend, who is now his significant other, was the head of the Sephora online business, and every woman she knew was absolutely stunning. So I said, “Chesky, this is the guy you need to know.” And we left, but I kept in touch with Chesky. 

When we did our market research in 2010, right before we went public, we hired Phocuswright. We did the most sophisticated study that’s ever been done on the industry, and that study estimated there were probably 6 million second homes rented for more than two weeks a year in the United States and Europe alone. If you looked at all of these websites, there were nothing. There weren’t 6 million. Then, in that period of time, we also looked at Brian Chesky’sAirbnb business, which was primary homes. And we said to every investor we have, when we were going public, you have to understand, there are more primary homes. And if Chesky is successful and is able to navigate the selling and the marketing of primary homes, of which there are tens and tens of millions of apartments and homes, if he can navigate that, he has a bigger market than we do.

I love Brian. I really did want to buy Airbnb. I really did. And the problem was nobody who was a public company, or about to be public, could buy Airbnb because what they did was patently illegal. You are empowering people to violate their leases in New York City. You can’t sublease in New York City without permission from the landlord, period, end of sentence. Right? Well, they did. And they did in Paris, and they did it around the world. Well, can you imagine having to write that in your state S-1, or state that in your filings. 

Brian Sharples: 

When Airbnb first got going, it was a little bit of a sideshow. We had our eye on it. We would talk about them in board meetings. But the general feeling was that they were doing something very different than what we were doing, that we were essentially houses that were set up as vacation rentals. They weren’t necessarily personal. You weren’t going to find clothes in people’s drawers or their ketchup in the refrigerator. And we saw theirs as much more as kind of a sharing a bed kind of a thing in a house with somebody you don’t know. And we didn’t believe that that concept could integrate with our own, that our brand image wouldn’t really allow us to do that.

As Airbnb got bigger, I do remember at one point investment bankers coming to us, I don’t remember who it was, saying, “Hey, listen. We’re looking at this company. It’s growing pretty fast. They have …” I don’t even remember what it was at the time. Maybe they had $25 million in revenue. And they said, “It might be a really good idea for you to acquire this thing. We think you can buy it for 250 million bucks. And I went, “Are you fucking crazy? 10 times revenue?” And of course these days people do that stuff. But back then it obviously would’ve been a great purchase at 250 million bucks if we could’ve done it. 

We were public because I remember the other calculus was, “Are these guys making money?” And to tell you the truth, the thing that prevented us from ever buying them, or even when we realized they had a juggernaut on their hands, going into that business and directly competing with them was the fact that we were a public company.

When we went public in 2011, we had 27 to 30 percent margins. And so he brought in a base of investors. In fact, HomeAway was extremely profitable from the day we consolidated the first four companies. This is a big lesson I learned, that if you go public as an unprofitable SaaS company, then you’ve got a few years of runway to continue to spend on growth and be unprofitable. If you go public as a very profitable business, you bring in a base of investors, they’re just going to hammer you if you go the other way and say, “Well, it turns out there’s this new model, and it’s going to cost us hundreds of millions of dollars to get into it. And so we’re going to lose money for five years.” And then all of a sudden, your stock goes down, your employees get disappointed. They all leave and go somewhere else.

And so our profitability really prevented us from being in that business (Airbnb’s). At every point along the way, we kept looking at them and saying, “Well, should we go make them an offer?” And we’re always trying to figure out how much they’re making. But we’re looking at how much money they’re raising. And we have relationships with some of the venture capitalists. And it was very clear that they were just spending scads of money, and that it would be years and years and years before they could ever make it.

Carl Shepherd: 

So, I loved the business and I liked Chesky. He came to visit our new offices, probably in 2009, and we were there on a Saturday morning. Sharples and I went down, and we had coffee and danish with Chesky in our birdhouse. Our building had a giant birdhouse. A two-story birdhouse in the corner of the building. It was cool. Very cool. So, we’re sitting there, and we talk about what we’re doing, and we love his business, and we wish there was a way we could do something together. And he is by that point in time taking lots and lots and lots of money from all of the various people he raised money from. And he’s now on his way to becoming a legend. But nothing comes of it. He leaves, and we go about our business, but we’ve gotten to know him. 

A few years later, probably 2013 at Christmas, Chesky announces that he’s commissioned a film for Sundance, which is going to be in February or March of the next year, the Sundance Film Festival. And so, he starts previewing it. And it’s about birdhouses. And it’s birdhouses everywhere. So, it’s Christmas week, and I call Chesky up, and I said, “Brian, you can’t use birdhouses to market Airbnb. You can’t.” He said, “Oh, but they don’t look like yours.” I said, “Brian, no, it doesn’t matter that they don’t look like mine. You cannot use birdhouses. I’m going to have to sue you. This is not good for either of us. Just stop.” And he called me back and said, “I’ve talked to my investors. We don’t think it’s a problem. We’re going to go ahead and do it.” I said, “OK.” So, this is like three days before Christmas. I file a lawsuit on Christmas Eve to block the release. And the bottom line is, all Christmas day, I negotiate with his lawyers, and we killed it.

But I said, “Man, son, you sat in my fucking birdhouse. You can’t say you didn’t know. You sat in my birdhouse. It’s the logo of the company. You can’t use birdhouses.” 

I always see him when he comes for South by Southwest. But he always stays in an Airbnb. So, I would go pick him up. A couple of years later, and the last time I picked him up, he came out of basically one of the shittiest houses I’ve ever seen in my life. He was staying in the back of a really horrible house in an Airbnb behind a dilapidated house. And then he walks out and gets in my car and I said, “If I took a photograph of you leaving that building, I could make fortune.” This is Brian Chesky leaving an Airbnb that looks like it’s a slum in Sao Paulo, Brazil. It was amazing.

Kim Rubey, Head of Airbnb Communications 2011-2016:

I was at Yahoo between 2008 and 2011, and it was great. The company was going through more in those few years than a lot of companies ever face. It was amazing. I was really eager to live the dream of working at a startup. Some people I really trust put me in contact with the Airbnb founders. I started interviewing around Labor Day of 2011, did some challenge assignments. It was basically coming up with a 100-day plan. At the time, they mentioned a few key things, big initiatives they were contemplating. So I put that together and then started right after Thanksgiving in 2011. I think it’s hilarious. Through the whole process, they didn’t mention that they were aiming to launch in European markets in January. That was a great way to start.

The second I walked in the office for the first time, I was just blown away by just the overall vibe and ambiance. When I was telling people what I was doing, that I had taken this job, the two key reactions were either people thinking I was going to work for an air mattress company or people just telling me they had no idea why I was doing this. Obviously, this idea would never actually work and take off. I was making the biggest mistake of my career. 

I love traveling. I thought Airbnb was an amazing concept. There was a New York Times feature, it must have been 2010, about Brian, how he had to give up his bedroom in the Rausch Street apartment because they had hired so many employees. I’m not too embarrassed to admit now, though, I thought it was going to be a niche thing. It would be fun, but it would probably be relatively limited. It’s really nice to be wrong because just watching the growth and then really tipping early into becoming so mainstream was just such a once in a lifetime opportunity.

I was leading PR and communications. There were a few people on board, but the most pressing thing was to build out a global team. The founders were just inherently natural PR pros. They had done things like create a listing for the first spot in line for one of the iPhone releases. They got a ton of attention, and then they were able to see the impact that had on traffic, signups, and bookings. They were big believers in the power of PR from the very beginning. The mandate was build out a world class team, find us ways to get as much exposure as possible, and really use PR to help shape the brand.

Bookings were happening pretty much in every country at that point, so we had to prioritize. In Western Europe, the growth there was staggering. Then we turned to build out the APAC (Asia-Pacific) team. There was not a lot of sleeping. But it was just so exciting. The team mindset across the board, regardless of what function you were in, is we were all basically creating something together. It was so motivating. Also, travel is an inherent part of the job. We were staying with hosts and hearing from them about what this either meant to them financially, or they were making with their guests who became friends. 

I think everyone at Airbnb realized what a unique opportunity it was. It was just so clear to every single employee how much Brian, Joe, and Nate cared about both the culture and what the team atmosphere was for employees. But, more broadly, they’re-laser focused on hosts and the community and then how to provide amazing experiences for guests. Everyone was very intellectually curious. 

They had just closed the Andreessen Horowitz funding round (July 2011), so it was unicorn status at that point, but still just not really well-known outside of tech. It was interesting. I would say, in that first year, we were doing meetings with a range of reporters and editors, and someone from a travel magazine said explicitly, “We’ll never write about Airbnb. Our readers would never contemplate traveling on Airbnb.” On the one hand, it was really good to know where we stood, but also just very motivating. You’re like, “Well, we’ll see about that.”

I think the reviews and the payment system were just so critical to the early growth. Then I think those were the foundations of trust that I think got people comfortable with the concept. Then, when you layered on the PR coverage and this social proof that came along with that, it really helped get people comfortable and ultimately excited about the idea of traveling via Airbnb.

I think everyone at Airbnb realized what a unique opportunity it was. It was just so clear to every single employee how much Brian, Joe, and Nate cared about both the culture and what the team atmosphere was for employees. But, more broadly, they’re-laser focused on hosts and the community and then how to provide amazing experiences for guests. 

Carl Shepherd : 

I like him a lot (Brian Chesky). I think he’s got chutzpah. He has now got gravitas. He’s got gray hair. He’s over 40 now. We met for coffee in October when I was out in California. I admire what he’s done, but like I said, we’ve always said Airbnb has a much bigger market. He was creating something that wasn’t. We weren’t trying to create a community, and he was. He really does believe all the stuff he said at Phocuswright that first year he spoke at Phocuswright. The audience is basically in stunned silence when he’s talking about he’s not a travel company, he’s a phenomenon, basically. That Airbnb is not into travel, it’s into experiences. People don’t own things anymore, and all that sort of stuff.

On the IPO, by the time we went public, we were pretty well-known. You had some Airbnb headwinds, but when people would look at our financials, we were still a subscription business, and investors absolutely ate it alive because it was so predictable. If there’s one thing investors want, it’s predictability. And we were still riding the table, we were still growing very rapidly, so our IPO was very successful. And over the next two years, we acquired some more companies. We put together the infrastructure to buy the software companies, Escapia and Instant Software. 

Escapia was the better product by far, but Escapia had run its course financing-wise, and it was going to go out of business. Doug Macnaught and Dave Hopcroft of Instant Software had a very nice, solid business. I think David lost interest in it. The problem with that business when we bought it was It was just too complex a business to be as small as it was. We wanted to get into vacation rental professional market. We wanted to have everybody on the site. Without solid software companies that couldn’t be done. Those integrations are not one-off integrations. A guy can manage his two vacation homes on HomeAway. He couldn’t manage 50. It’s just too much extra work. You have to be able to integrate software. The dirty little secret was that most of the subscriber base of Doug McNaught’s business was still on a DOS-based system called First Resorts. And we had to move everybody off of that so they could be online and we could book it. 

So, the IPO was very successful. We were growing. We were hosting the largest industry events, that were not from the VRMA (Vacation Rental Management Association) because VRMA was exclusionary. The VRMA lost so much time. The professional property managers lost so much time — where they could have been learning and growing — fighting the windmill of rent-by-owner. They wanted to kill rent-by-owner more than cities wanted to kill Airbnb.

And you couldn’t kill it. It was where the industry was going. And ultimately, they would hate me. Professional managers didn’t like me very much because I would tell them the truth. I’d say, “Guys, the reason people are doing this is not because it’s easy. They’re doing it because they don’t think you do it well. Why aren’t you investigating why they don’t think you do a good job as opposed to derailing them? You’re killing the messenger. I’m just organizing the people who don’t want to be represented by you.”

When we first met the professional property managers, we went out to the first VRMA after we bought the company, and we he held a round table with 12 of the largest property managers on the East Coast in the fall of 2005. And we tell them what we’re doing and why we would like them to advertise on HomeAway, and we tell them why we thought they should be there. And I was sitting next to a woman from Pawleys Island, South Carolina, and she’s telling me about her business. Well, it’s a 50-year-old business. Her grandfather started it. They’ve managed the same homes mostly for 50 years. There’s not that many homes. “Well, we have a 12-week season on Pawleys Island, and this is what we do, this is how we staff up, and we have this 12-week season.” And I said, “Well, this is where HomeAway could help you because you’re a drive-to market and people don’t know about you. But I know, for example, that the schools in Texas let out later than the schools in South Carolina, and they go back later. So, you could extend your season by four weeks, and have a 16-week season. That’s a lot.” And she looks at me and she says, “Carl, I have a 12-week season.” Period. End of Sentence.

John Banczak was a distribution vice president at WorldRes in 1999 when it acquired, and became chief operating officer at in 2004 when WorldRes sold it back to its founder. He later worked at HomeAway, was Co-founder and CEO of property manager TurnKey starting in 2012, and currently is chief strategy officer at Vacasa:

I started as COO and became president later on. We had roughly 7,000 B&Bs that were paying customers in some way. I think the average size of the properties was 12 units. So they’re a little bigger than you think. Many were boutique hotels and inns. But they still were hard to find online. And it started as a listing model. And then we really did three different things. We went out and acquired several of the property management system companies the B&Bs were using. In fact, the three largest. So we had around 8,000 properties using one of our property management systems. And then we integrated all that inventory and made it bookable. We did that through a merchant product. In fact, we signed a big deal with Expedia to basically do it with them. 

So by the time we sold to HomeAway in 2010, we were doing the listings business, which really matched what HomeAway was doing at the time. There were almost 100,000 rooms available through this platform, which was a lot back then. And then there also was a great fit on the technology side. HomeAway was looking at buying up the property management systems in the vacation rental space. Carl Shepherd was across the table from me, negotiating the deal to buy us. So within a few weeks of closing that deal, I switched my role and joined Carl and the team at HomeAway. Brian Sharples wasn’t on the deal team. Carl and Brian worked great together. I mean, Carl’s probably one of my favorite people on this planet. He’s just a great human being in every way. And Brian is too. He’s a really fun guy, easy to get along with and smart. I mean, there were great people at HomeAway across the board and those two got along great. It was a fantastic combo. It was actually Carl, myself, and Jeff Hurst (currently Vrbo chief operating officer), who had just joined, and we went out and started to cut the deal to buy Instant Software and Escapia.

In 2010, HomeAway acquired Instant Software, Escapia, and, which likewise offered property management software for inns.

Doug Macnaught and Dave Hopcroft co-founded Instant Software in 1994 in Kissimmee, Florida on the foundation of an earlier software company they created two years earlier in the UK. 

They developed a series of property management and online booking and distribution tools based in part on a strings of acquisitions, including Resort Manager (2001), Entech Data Systems (2003) and ResortQuest’s First Resort Software (2004).

Doug Macnaught:

HomeAway acquired us in 2010 and had been trying to acquire us and Escapia at the same time. They had actually acquired us to get the deal done with Escapia. So we were supposed to launch or announce the purchase at our RezFest conference in Vegas in 2010 and we couldn’t. We’d already signed the paperwork and sold the company and we were supposed to announce it at that point, but they couldn’t get the Escapia deal over the line and they didn’t want to announce our sale without announcing them both. So it took them in another two weeks to get the Escapia one done, and so they announced it at the beginning of October. It was one of those things where HomeAway needed to lock up a guarantee of the supply on the professional side of the industry as well. It had to be an all-inclusive thing for their future IPO.

Brian Sharples:

So one of the moves we made is that we bought Instant Software in 2010. We also bought a company called Escapia that was trying to compete with Instant Software. And we essentially ran the same playbook on the property management software company as we did in the listings business, which is we wanted to consolidate it and we wanted to control it. And it was in part because we wanted property managers to have push button access to go from the systems that they use to run their businesses every day, to listings on our site, to managing search position on our site, and buying other products from us.

When we first bought Instant Software, they probably had the biggest property management conference in the country. It was originally up in Aspen, Colorado. And so about a month after we bought the company, property managers were just up in arms about the fact that we had come in and done this, and we’re going to control everything, we’re going to see everything they do, and all that kind of stuff. And so I was a speaker at their conference about a month after that happened. So at this one, I knew that there was going to be a lot of aggression in the crowd. We had thousands of ping pong balls printed up with the HomeAway logo. And right before I spoke, our staff went through the crowd with baskets of these ping pong balls, and just handed baskets to everybody in the crowd.

Yeah. So I went up to speak. And I said, “Listen, I’m just going to try to address the elephant in the room right off the bat here, guys. I know there’s a lot of fear and trepidation about the fact that we now own Instant Software. And I’ve heard that a lot of you are very upset about it. So I’m just going to give you a couple of minutes to take out that aggression and you can hammer me.” And I mean, people just ran up to the stage, and I was just getting pelted. I did put on a pair of ski goggles, just to protect my eyes. Everybody’s laughing because the whole thing was fucking hilarious. And so then they all settled down. I said, “OK, glad you all got that off your chest. Now for the next 30 minutes, I’m going to tell you why this is going to be really good for you.” And it ended up being a great icebreaker because people did listen, and they did pay attention, and by the end of it they were feeling better about it.

Sharples Pulled Down His Pants and Also Played Guitar Solos

The pulling down my pants issue was a later conference. Either the next one or the one after that, where I was talking to them again about trust. We were making some changes to the platform. There were some concerns about it in the audience. And at some point during the presentation, I had this little pair of pink underwear skivvies on. I don’t remember exactly what I had said in the speech. But it was what was something like, “If I tell you I’m wearing pink underwear, I’m wearing pink underwear. I’m a guy who’s straight up. I’m telling you.” And I kind of said that somewhere in the middle of the thing. And then towards the end, to make my point, I said, “Listen, how many of you think I’m wearing pink underwear?” And some people put their hands up, some people put down. And I just pulled my pants down in front of everybody and was like, “This is it.” Anyway, it was a stunt. It was a stunt.

My playing the guitar, for whatever reason, became kind of a huge part of HomeAway culture. As it turned out, our first holiday party, when we were just a very small band of people, I had picked up a guitar and wrote, kind of on the fly, I did a little song about the people in the room, and the founding of the company, and all kind of stuff. And it was set to the tune of Home on the Range, but it was HomeAway and whatever. And so it was just sort of a one-shot deal. It was kind of a spontaneous thing. Well, the next year — there’s now 75 people — and we’re having the holiday party. And in the lead up to the holiday party, people all started asking me, “Hey, we heard you did a song last year. Are you going to do a song this year?” And so I wrote another song, and I did it that year. And then every holiday party since, it just got bigger and bigger. So it went from me with no microphone, to me with a big sound system, to me with a band that was comprised of people from HomeAway, to ultimately the year that I sold it to Expedia and retired, I had a full band of famous Austin musicians plus myself up there. And there were multiple songs. It wasn’t just one. But the song was always … It was a little like Free Bird. It was like typically a 15- to 20-minute song, where I would just recount the year. It was all tongue in cheek and funny, and it was all about the people and the things we’d gone through. And so I would always start by saying, “Y’all put your phones down. This can’t go beyond these walls, or I’m not going to do it again next year.” And we threw epic parties. These were big parties. And by the end, the last party I think I was playing for 3,000 people or something like that.

John Banczak: 

We created this group, HomeAway Software for Professionals, which still exists. People freaked out about the deal. HomeAway already owned VRBO, which didn’t allow property managers on its site. Until VRBO was created, if you were a homeowner, you really had no choice but to go work with a property manager. Now, VRBO comes along and these property managers start losing business left and right to VRBO, and you’re not happy if you’re a property manager. Now HomeAway comes along and buys up 65 percent of the entire property manager technology space. So now you’re sitting there with that company owning effectively your desktop and all of your data. And people went ballistic. We had an incident where the FBI had to get involved. We had security following us around in Seattle. Someone was making bomb threats. Yeah, it was the real deal.

In the fall of 2010, at the first VRMA conference after the acquisition, people were livid. There was a scuffle in one of the bars. We had a property manager basically assault one of our employees. We had them interrupt our informational session. A band of property managers came storming in, literally yelling at Carl, and trying to disrupt the whole thing. 

The spring VRMA conference, this is 2011, was in Florida, and it kicks off in the morning and the leadership is up on stage, getting ready to do a keynote. They start up some music and they have a bunch of these guys walk live alligators out onto the stage. Think about the cast of Swamp People. This is like 9 a.m. So there’s a bunch of live alligators out on the stage. And they start talking about how, and this is VRMA again, professional managers, they start talking about how much they don’t like the VRBOs — this is what they calls rent-by-owners. And they start feeding these, I don’t know, dead chickens to the alligators. And literally with the theme of this is what we’re going to do with the VRBOs. That’s how weird it was. We’re sitting the audience thinking, “Oh my God, this is strange.”

Now, I will say this, 12 months later, at the next conference in the fall, so the year after we did the deal, everything had completely changed. We had improved the service levels. We had retained all of the employees. We didn’t steal anybody’s data. We integrated the property managers onto VRBO. We even allowed them to put their logos on the listings. If you look back at anything, that’s not that big of a deal, but at the time it was a big deal. It really ushered in the modern era of bookability for these homes. All of a sudden these hundreds of thousands of units of inventory that we had acquired in these systems, was now being shown to the world in one in place.

So at the time, there was a startup out there called Airbnb. I was put on a team of people that was literally called the Airbnb competitive team. What are these people about? What should we do about it? We spent several months coming up with that. The conclusion of the group was, on the inventory side, this isn’t such a problem. It’s a lot of home stays. It’s not the higher end inventory we have right now. So we’re not so worried they’re sort of digging into our inventory. But boy, the model and the experience is a lot more frictionless, and it works better. We need to quickly move to online bookings, to a consumer fee, get out of the subscription model.

Jeff Hurst joined HomeAway as director of strategy and planning in 2010, and currently is chief operating officer of Expedia Group brands, including Vrbo, which is the rebranded HomeAway:

I joined HomeAway in May 2010. I was four years into a McKinsey career, was living in San Francisco. And one of my classmates, a guy named Bill Bowles was working at HomeAway and I came to town for an engagement party. Bill connected me with Brian Sharples and Carl Shepherd and we met on a Saturday morning, before the party I was going to that night, and had a good conversation. They asked me to stay Monday and meet a few more people. And then I quit McKinsey Monday night.

I was basically the first hire in the strategy department. So we had a corporate development department because we had done so many acquisitions, but Carl ran corporate development strategy. I was helping to get us ready for our IPO, building a quarterly planning and an annual planning process. And then I was corp dev arms and legs. And so my first project in the strategy team was actually the purchase of Escapia and Instant Software. And that’s how I got to know the software side of the business a lot better. I was in on the diligence and the thesis, and then Carl and a guy named John Weimer were more kind of the wrecking crew in terms of how much are we going to pay.

There were competing conferences back then, We hosted Rezfest and that was kind of the de-facto industry conference. And VRMA was actually of up and coming. Early on, we were not cozy with VRMA because we were a VRBO-centric business. And so we were trying to basically prove that the category would benefit by from individuals and professionals. VRMA originally was not interested in individuals, which were more of the enemy than they were part of the solution. And so they were building a switch thinking they could power distribution for professionals, but VRMA didn’t actually have that big of a membership base compared to where we were. And we were going to build a solution for our software company. And so a lot of the question was around, is it going to be open? Are we going to make it (our software) available to players that aren’t owned by HomeAway and we had committed that we would. It was just a question of whether anyone else was going to take it and how they would use it. Part of the reason it (the VRMA switch) never got a lot of momentum was that VRMA’s an industry association more than a tech player. And so who was going to build it and how were they going to think about economics was pretty tricky. And so they got somebody in (Pegasus Solutions) to basically sponsor it, but I don’t think it ever got critical mass.

Rezfest was in Las Vegas, and I remember at either the first or second one of these, Brian pulled his pants down on stage. He showed the entire audience what he was wearing, it was pink underwear or something. I don’t even remember but everyone was talking about it.

L-R: TurnKey co-founder John Banczak, Office Manager Jess Page, Chief Revenue Officer Jen Ford, and co-founder T.J. Clark at an office opening in 2018. Source: T.J. Clark

John Banczak:

At the time I learned a lot about the property management industry, and there was more money flowing through that industry than there was in the entire online side of it. It was your classic mom and pop scenario, none of the property managers practically were even operating out of their city, much less outside their state or nationally. And the tools they were using were really antiquated. So I loved that opportunity left in early 2012 and started up TurnKey that year. T.J. Clark and I started it, and the original investors were Carl Shepherd, Gregg Brockway, me, T.J. and Eric Goldreyer, who was the founder of Then the next year we went and passed the hat around for the Expedia gang. Barney Harford was an investor, and Rich Barton, Carl Peterson, and Russ Sach was a big investor and there were another 15 or so. Spencer Rascoff was in on the deal to get us that first couple of million bucks.

We took a really heavy tech forward approach to it. T.J. and I would go and sit in a home and we would watch housekeepers clean the home and watch what they did, without saying anything and think to ourselves, well, how could we improve this whole thing with technology? I think this is one of the funnier stories. What we learned watching housekeepers was that they rarely checked their own work. The technique was you’d clean a room and you’d close the door. And if the door was closed, it signified that the room was clean. And you could imagine a lot of time the room wasn’t clean. Either a pillow would be on a chair or they meant to come back and grab something, or the broom was in there or whatever. 

So they leave the house, and they say, “Hey, we’re done.” Great. We go, and we inspect it. And we find all these issues. So the first thing we tried to figure out was, how do we get them to just check their work? And so we came up with the concept of a video inspection. Well, none of them had smartphone. It was back in 2012, people didn’t have smartphones, but tablets were all of a sudden, really cheap. Hey, let’s just put a tablet on the counter and quickly build some video inspection software and say, “When you’re done, use the tablet.” And the idea of a virtual inspection was born, and they would take this thing and walk around the house when they were done and check their work.

T.J. Clark:

I met my co-founder John Banczak at Hotwire. We weren’t a first mover in e-commerce travel, but we were a second mover and that’s where it really gave me the background on how important the technology plumbing and ease of online booking was going to be to selling travel in general, that whole experience. That was certainly very important and relevant when John was thinking about starting a new business, and I was too at the same time, and we’ve been comparing notes about what to do. And we looked at a number of different things. All of them were with technology enablement in the services business. 

We were not interested in trying to become the next Airbnb or VRBO. We knew how hard it was to do that from our Hotwire days. And the landscape had changed so there was even way more consolidation by the time we started TurnKey. It seemed like people were not paying attention to the supply side at that time. And when we tried to explain the business every time, people said, “How are you going to compete with Airbnb?” That was constantly a theme in the investor meetings when we were trying to get this thing off the ground. It was nonstop. “I don’t understand how you’re going to compete with VRBO.” We said, “We’re really not. We’re really focused on the supply side.”

I met Jenny Hsieh (Homes & Villas vice president) pretty early. I was going to the Skift conference in New York and I think it was in 2014 or 2015. I reached out to Marriott just out of the blue and I just lobbed a question over the wall and said, “Are you guys thinking about this space? And if yes, if no, I’d still want to catch up with you and talk about it.” It was still probably about two years before they got really engaged. And somebody responded and I was kind of shocked that they did, but I wasn’t surprised that Marriott was looking at this space. We started talking and she said, “You know, I can’t say a whole lot now, but something’s coming and we’re going to be ready to discuss it really soon.” And then it was a very big effort, a big entree for them into the space. And they’ve been fantastic.

It was a great deal for us at TurnKey. I felt like it really elevated the brand, that we could tell homeowners that were considering using that, “Hey, we’re aligned with the Bonvoy program and we’ve met their standards of hospitality.” They really did look at us hard. The diligence we went through on that deal was very extensive and they were very careful, as you might expect. But she’s been a great partner.

TurnKey was the launch partner for Marriott Homes and Villas in 2019. And we’re big fans of distribution. We think guests should be able to book the home where they want to book it and we want the home to be there. And Airbnb has always been a part of that. I believe we were the first property manager at TurnKey to integrate with Airbnb, period. And we’re big fans of that business and as our consumers and our properties do well there.

Merilee Karr founded and has been CEO of UnderTheDoormat, a London-based property manager, since 2014. Karr is also chairperson UK Short-Term Accommodation Association:

Whether it was myself, all my colleagues in Shell, all of my friends who worked in banking in London, everybody had properties that would sit empty for periods of time, but we were the wrong people to be letting them out because we’re traveling, we’re away, we’re not there, we aren’t hospitality providers, we don’t want to be cleaning properties, we don’t want to be worrying about linens. I mean, all these sorts of things. And so that was when I started looking into setting up UnderTheDoormat and solving that problem. So separating that peer-to-peer relationship in the home market and actually having a professional company in the middle was going to be the solution to the growth in the market.

To be honest, I didn’t even really think about it as being a property manager. In my mind, it was setting up a brand and I wanted to create a brand that could ultimately be a global brand in the way that the hotel brands emerged for the hotel sector, and to create something similar in the home space. So yeah, you can imagine coming from a role where I was managing sites across 43 countries (for Shell), the idea of just being a small property manager in a city wasn’t really what I had in mind. But of course, that’s where you have to start.

You can always have debates about them (Airbnb) as a business, but they opened up the market and opened up a lot more people to want to access the market. What they never will be able to do as an OTA (online travel agency) is control quality or control a standard of service because they are just an OTA. And I think that is sometimes the misconception that people have in their minds — Airbnb is no different than Expedia or or any other OTA.

They have Airbnb Luxe, which is basically from the acquisition of Luxury Retreats, which I think was back in 2017 or so. And so they’ve tried to create tiers, but I would say it’s unclear how successful they’ve been at that tiering. They don’t have on-the-ground capability to go and inspect properties and do these different things, so it always falls back to what ultimately is a self-declaration. And I don’t think you can self-declare standards.

So for me, they (Homes & Villas by Marriott International) were the first company that actually cared that we had all the processes and standards in place. So as a founder coming from the corporate world, I set up my business with the right insurances, with all the right standards, all the right processes. And to be honest, other the insurance company and the odd lawyer who was a homeowner, no one actually cared until we were getting vetted by Marriott. 

And they vetted us for everything. And we flew through their process. We actually have an exclusive arrangement with them where we can distribute our Hospiria partners — UnderTheDoormat Group has three brands, UnderTheDoormat, Hospiria, and TrustedStays — to Marriott Homes & Villas because they know the processes we have in place and the standards that we’ve set up. 

The three businesses that we run are fundamentally different businesses. So UnderTheDoormat is the distributed hotel. It is the property management business. It’s where we do everything end to end for the owners. Hospiria is our tech brand. It’s SaaS technology where we provide the integrated tech stack, which does everything between property and guest for property management companies, service department companies, and even hotel residences…… 

And then TrustedStays, which is our third brand, is actually an industry platform. So in my industry role as (chairperson of) STA (the UK Short Term Accommodation Association) when the pandemic hit, obviously all of the companies in our sector were, of course, suffering from cancellations and empty properties almost overnight. And so we came together and launched NHS Homes, which was the charitable initiative to host NHS (National Health Service) workers. We had all the big players. We had Onefinestay. We had Altido. We had Sykes Cottages, Travel Chapter. I mean, all of the major UK companies participated, and we delivered more than £20 million ($25 million) of free stays for NHS workers during that first lockdown. We then won the government RFP (request for proposal) in 2021 for the first time ever in our sector to host NHS workers.

So TrustedStays is its own company. So the association STA, the director general Shomik Panda, sits on the board. Also, it is the platform for the UK Apartment Association, which is the build to rent sector or multifamily sector association. And they also sit on the board. So it’s an industry platform actually for two sectors: short-term rental sector and the build to rent sector also recognized that desire to access corporate and government stays and access to the GDSs (global distribution systems), frankly, as well. And so access of a whole industry into the GDS through a new channel is fundamentally what TrustedStays is set up to do, and to enable corporates for the very first time to book accredited properties in our sector so that the duty of care that corporates have can be addressed.

I would always believe that it’s about finding the right people, and I’ve got incredible investors who are men. I do think that in the entrepreneurial world, people like to invest in people like them, and there are simply more investors who are male out there, and they’re more in the property world. There are more people who see themselves in male entrepreneurs than females. So I think that is just the reality. I mean, have I ever really felt there was a specific thing where I was like, “Well, I didn’t win that because I was a woman.”? No. But do I feel like you almost have to prove yourself twice as much? I think sometimes the answer to that has to be yes.

I mean, it’s really interesting because I sat on a panel of CEOs at the International Hotel Investment Forum in Berlin back in 2019. So again, coming back to dates. And I remember saying it was hoteliers and I was the short-term rental representative on the panel. And I challenged them and said, “Look. In five years’ time, I think every hotel brand will have a short-term rental or holiday rental element to their portfolios or their brands because fundamentally, the hotel businesses and the traditional hospitality sector has way deeper pockets than our industry does.”

In the second installment of The Definitive Oral History of Short-Term Rentalsyou’ll hear from:

“I said the following things. ‘If you want to be a hospitality company, we have to pay occupancy tax.’ We have to do that. It’s a requirement. It’s unfair for us not to. It took a little while to get there, but we got there pretty quickly. And then, also we need to be regulated. This didn’t go over all that well, but over time, people got it.””

Chip Conley, former Airbnb head of global hospitality and strategy

“We certainly weren’t willing to pay (what Expedia paid for HomeAway, $3.9 billion). That’s for damn sure … Obviously, Expedia, they have grown, it’s very nice. So it worked very, very well. Who anticipated a pandemic? Really? But the truth is it’s good work by them. Congratulations to them. Nice. At the time it did not seem to fit what we needed to do for the price, the work it would take.”

Glenn Fogel, current CEO of Booking Holdings

“And Brian Chesky and I have spent a lot of time thinking strategically about how to position the company and how to think about it. And we made a presentation to the board of Airbnb saying, “The rise of professional listings is real.” And we’re trying to balance them in our ecosystem because the company’s origin, really its soul, was the individual homeowner, the individual host. That was really our soul.”

Laurence Tosi, former Airbnb chief financial officer

The Definitive Oral History of Short-Term Rentals Part 2 covers the coming of age of Airbnb, how some competitors miscalculated its potential, and HomeAway’s transition in the Expedia Group fold as a booking site.

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

Tags: airbnb,, evolve, expedia, flipkey, homeaway, hometogo, oyo, tripadvisor, underthedoormat, vacasa, vrbo

Up Next

Loading next stories