Expedia
Expedia Group CEO Mark Okerstrom [Credit: Skift]

Expedia’s HomeAway segment re-branded to Vrbo

Worldwide: Expedia Group has revealed its HomeAway segment, which includes Vrbo, HomeAway and regional rental brands, is being re-branded to Vrbo in its first quarter earnings report.

The update comes at a time of slowing growth in reservations in Expedia Groupโ€™s alternative accommodation business, seen by the deceleration in gross bookings from 15 per cent in the fourth quarter of 2018 to five per cent in 2019โ€™s first quarter.

Comparatively, in the first quarter of 2018, bookings for Expediaโ€™s vacation rental brands rose by 46 per cent up from 2017.

Expedia Group CEO Mark Okerstrom said the consolidation of the companyโ€™s alternative accommodations under the Vrbo brand had caused a slowdown that would persist for several quarters, however it would benefit the company in the long term by positioning the firm as a global leader in the space. He also attributed the deceleration to SEO trends and segment laps relating to a shift in online bookings.

Okerstrom told Phocuswire: โ€œOur streamlining of brands and platforms has put increased near-term pressure on SEO trends, which has contributed to the deceleration we have seen in Vrboโ€™s gross booking growth.

โ€œDespite this near-term slowdown, consolidating the bulk of our efforts behind the Vrbo brand globally and its offering a unified, world-class e-commerce platform will allow us to maximise our potential in alternative accommodations in the coming years,โ€ he added.

On the re-branding of HomeAway as Vrbo, Okerstrom told analysts: โ€œOur intention right now is not to shut down HomeAway, but rather just to focus a lot of our marketing and other innovative efforts on Vrbo.

โ€œThe expectation is that the loyal customers of HomeAway brand – of which there are many – will continue to enjoy that brand, but on margin weโ€™ll take the bulk of the new customers against the Vrbo brand here in the U.S. and globally,โ€ he added.

Okerstrom said he remained optimistic about the vacation rental category and its potential for driving growth for Expedia Group.

He said: โ€œThis is a highly popular category – definitely growing faster than the overall industry. We think this is a growth category not only on Vrbo, but as we move more of the inventory onto our core OTA brands, we think this remains a very attractive category and opportunity for us for a long time to come.โ€

Last week, Marriott announced it would expand its home-sharing activities in 100 global destinations and Okerstrom said he thought it would help the alternative accommodation sector to grow further.

He said: โ€œIf you look at the big hotel operating companies and chains, they are really good at this stuff and really providing a great guest experience.

โ€œSo I think generally it could be a really good thing for the industry to add this type of professionalisation to the space, and weโ€™re very hopeful that we can help our partners as they develop these new inventory types, help them to get to markets and get them in front of the right consumers at the right time,โ€ he added.

Vrbo now includes over 1.2 million online bookable listings among its offerings, with 460,000 of those integrated on Expedia Groupโ€™s core vacation rental platform.

Overall, Expedia Group reported that gross bookings were up by eight per cent in the first quarter of 2019 compared to the identical period the previous year, and revenue went up by four per cent. The company put the increase in gross bookings primarily down to growth in Expedia Partner Solutions and Brand Expedia.

The report also revealed that lodging room night stays rose by nine per cent year-over-year. Lodging accounted for 66 per cent of the companyโ€™s total worldwide revenue, advertising and media were each 10 per cent and all other revenue was 14 per cent.

Furthermore, selling and marketing costs grew by one per cent in the first quarter compared to 2018 and represented a smaller percentage of total revenue – 58.8 per cent in the first quarter of 2019 versus 60.4 per cent in 2018.

Other key takeaways from the report were:

  • Core OTA room night growth remained stable around ten per cent and picked up a bit compared to the last quarter when adjusted for the Easter impact; domestic remained up high-singles while international grew double-digits.
  • Europe was โ€œbroadly in line with expectationsโ€ and grew in line with the business overall. Expedia did see the UK exhibit slower inbound/outbound growth throughout the quarter. Outside of the UK, Expedia saw โ€œnice growthโ€ in major European markets.
  • Direct selling and marketing expense was up by 11 per cent, in line with 2018 growth levels driven by higher brand marketing spend in Expediaโ€™s core OTA business and additional spend surrounding the rebrand of HomeAway to Vrbo.

For more information, visit the Expedia Group website here.

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