HomeAway Tests New Rental Booking Option
The vacation-rental marketplace HomeAway charges $349 annually to list a property. For most current users, that makes a lot of sense; they bring in an average of $28,000 per year, and tend to rent at least 12 weeks per year.
But the annual fee doesn’t make sense for people who want to opportunistically experiment with renting their homes, for instance when a big event comes to town — the kind of stuff competitor Airbnb is especially good at.
“I know we lose a lot of customers who want to give it a try,” said HomeAway CEO Brian Sharples in an interview this week.
So HomeAway is adding a pay-per-booking option, as it had previously told investors to expect in the fourth quarter. But the markets don’t seem overly thrilled about the news; shares of HomeAway are trading slightly down, at $28.10, this morning.
Under the new plan, home owners can opt to pay 10 percent of each transaction to HomeAway. For 13 percent per booking, they can be connected with a service to build their rental listing and handle reservations. For 25 percent to 30 percent, they can hook up with a professional property manager who will handle cleaning and maintenance.“Property managers traditionally viewed us as competitors,” Sharples said. “Now they are in-market partners.” Some 28 professional management companies have signed on so far.
Pay-per-booking will start as an option on HomeAway.com. Sharples said it would be extended to the company’s other sites, like VRBO.com, if it works out.
The move brings HomeAway into closer competition with the peer-to-peer darling Airbnb. But Airbnb’s appeal is about more than dropping the subscription fee; the company also authenticates hosts and guests using their history in the community and their offline identities. In some ways, Airbnb is less of a listing board and more of a social network of travelers.
Sharples said that model wouldn’t make sense for HomeAway, because it has a different audience. “We have our own internal tools to validate properties and ownership. But our customers are older and have second homes, and they aren’t as much in cities,” he said. “Many of our users don’t use social networks.”