Expedia Inc has announced its acquisition of HomeAway, a publicly traded vacation rental service along with its brands for $3.9 billion in cash and Expedia common stock.
Founded in 2005, the company HomeAway caters for customers around the world who want to rent holiday homes rather than book a hotel for their vacation. The transactions do not happen over the website but happens between customers and homeowners after connecting. It has 60,000 holiday homes in 90 countries and now support more than one million listings in 190 countries. It also owns other rental sites like VRBO.com and VacationRental.com in the USA and similar sites in UK, Germany, France, Spain, Brazil, Australia and New Zealand. Apart from these, it also operates BedandBreakfast.com.
The acquisition would help Expedia which has already acquired Hotel.com, Hotwire.com, Travelocity, Orbitz and Venera in fighting against competition like Airbnb. Considering Airbnb’s rapid growth, Expedia was on a way to develop one on its own to compete but decided to acquire a business with similar model instead.
Dara Khosrowshahi, CEO of Expedia said, “We have long had our eyes on the fast growing US$100 billion alternative accommodations space and have been building on our partnership with HomeAway, a global leader in vacation rentals, for two years. Bringing HomeAway into the Expedia, Inc family and adding its leading brands to our portfolio of the most trusted brands in travel is a logical next step.”
Khosrowshahi added, “We have tremendous respect for the HomeAway team and the business they have built… [and] we look forward to partnering with them to accelerate their shift from a classified marketplace to an online, transactional model to create even better experiences for HomeAway’s global traveler audience and the owners and managers of its 1.2 million properties around the world.”
Excited Brian Sharples, CEO of HomeAway said, “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 travellers. In this way, I believe our combination with Expedia will turbocharge our growth and industry leadership for many years to come.”
Expedia has been one of the most acquisitive in the travel sector this year with the acquisition of three companies. Further to the announcement of the news, Expedia shares gained 1.4% after hours and are up 57% this year. Meanwhile, HomeAway shares gained 8% this year which is 19% more in extended trading.