Austin, Texas-based HomeAway touts itself as the world leader in vacation rentals, with sites representing more than 1 million paid listings of vacation rental homes in 190 countries.
First it was Travelocity, then Orbitz. Now, Bellevue-based Expedia is buying the vacation-rental company HomeAway.
The $3.9 billion deal, expected to close in the first quarter of 2016, was announced Wednesday and has been approved by both companies’ boards. It remains subject to regulatory approval.
“We have long had our eyes on the fast-growing (approximately) $100 billion alternative accommodations space and have been building on our partnership with HomeAway, a global leader in vacation rentals, for two years,” Expedia CEO Dara Khosrowshahi, said in a news release.
Alternative accommodations, such as those provided by Airbnb, have become an increasingly popular travel option. Because of that, Expedia started a pilot program in 2014 that listed 115,000 HomeAway vacation properties. Khosrowshahi said bringing HomeAway into the Expedia family and adding its leading brands to the Expedia portfolio was “a logical next step.”
HomeAway, based in Austin, Texas, touts itself as the world leader in vacation rentals, with sites representing more than 1 million paid listings of vacation-rental homes in 190 countries. It was founded in 2005 and has more than 1,700 employees worldwide, including more than 700 in Austin.
The HomeAway portfolio includes vacation-rental websites HomeAway.com, VRBO.com and VacationRentals.com in the United States, as well as similar sites in the United Kingdom, Germany, France, Spain, Brazil, Australia, New Zealand and Asia Pacific.
“We’re eager to benefit from Expedia’s distribution, technology and expertise, which will allow us to provide an even better product and service experience for our owners, property managers and travelers,” HomeAway Chief Executive Brian Sharples said in a release, noting that the company has been moving toward a fully online bookable marketplace and the type of business model with which Expedia has experience.
“I believe our combination with Expedia will turbocharge our growth and industry leadership for many years to come,” he said.
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On a call with analysts, Khosrowshahi said HomeAway will remain a stand-alone company run out of Austin, but its platform will be under the Expedia umbrella.
He said Expedia, having spent the past five years perfecting its marketing and technology, views HomeAway as being where Expedia was three or four years ago. He said he wants to look at the HomeAway playbook and use Expedia’s experiences to help HomeAway avoid the mistakes Expedia made while growing. Doing so may provide HoweAway with shortcuts, he said.
Sharples said that operating under the Expedia umbrella would give HomeAway a much greater distribution network, which he hopes will ease any homeowner concerns over a new traveler-service fee also announced Wednesday.
The fee, which is expected to add an average 6 percent to most bookings, will go into effect mid-2016, but Sharples said working with Expedia will allow HomeAway to deliver more revenue and more bookings to the homeowners.
“We know the most important thing we can do is keep our owners happy,” he said on the call.
The deal adds the HomeAway brand and sites to Expedia’s growing lineup, which already includes Hotels.com, Hotwire, Egencia, Travelocity and Orbitz.
Expedia bought rival Orbitz Worldwidein February for $1.6 billion. The deal closed in September, the day after federal regulators dropped an objection to the merger. Expedia had acquired Travelocity early this year for $280 million.
Expedia traditionally has focused on primary urban vacation destinations, while HomeAway has been focused on beach, ski and other resort locations. On Wednesday’s call, Khosrowshahi said the two will now “have leading complementary and growing coverage across both and we believe we’ll help each other across all destinations worldwide.”
Expedia shares closed at $134.17, down 1.6 percent and near its 52-week high of $139.58 a share. In after-hours trading — and after the deal was announced — shares rose 2.5 percent to $137.50.