HomeAway 2Q 2012 Earnings Call

I am going to monitor the HomeAway earnings calls because I find them very interesting when attempting to watch them squeeze more money out of their advertisers now that they are a publicly traded company.

This nugget stood out to me:

“Online booking will be a capability that’s optional for owners, who will now have the ability to add a Book it! button on their listing, and will have 24 hours to accept reservations, so they have adequate time to vet travelers, if necessary, which is very important in the vacation rental category. Our subscription customers will not be charged for additional fees beyond their standard merchant fees that they already pay as part of using our payments platform.

This represents a really big step forward for the company because adoption of this over the next few years will create more accurate calendars on our sites and encourage quick owner response. And overall, we think create a much better and more efficient experience for our travelers. Equally as important, online booking will set the stage for the introduction of a transaction-based pricing model in 2013 that we can use to target new customer segments that are additive to our business.

Note the part in bold. HomeAway is no dummy, but they sure think that their customer’s are dumb. Transaction based pricing is the holy grail for HomeAway. They make on average $380.00 per listing on HomeAway. They know if they can instead charge 1% to 5% of every transaction, they will double or triple the amount of money they make per listing.

I don’t think they’ll mandate a transaction-based model to start. Instead they’ll offer it as an option for new listings and on renewals. They’ll continue to raise the per listing price to get that north of $450.00, so that when a listing owner has to renew, the thought of paying $450.00 upfront or nothing at all and instead pay just 3% of every transaction, well that on the surface seems like an easier route. But in volume, that 3% can quickly grow to a very substantial number.

Personally, I think HomeAway underestimates how quickly many of their customers will leave for a competitor like FlipKey if prices get too high. The reality is that no vacation rental owner needs HomeAway. With a simple mixture of a competitive website, a few good traffic driving links from the local Chamber and Visitors Bureau websites as well as a well managed long tail Google Pay Per Click campaign you can obtain all the business you need without having to pay HomeAway a dime.

By | 2012-07-27T19:14:59+00:00 July 27th, 2012|News|0 Comments

The Transition from InnFirst.com to Lodgix.com

Many potential customers will take a look through a company’s blog to get better familiar with the company and the product. I do this all the time. However, I also check the blog to see if there is any life in the company. If the staff is posting on a regular basis and the posts are informative and well written it tells me that their product is probably current and being maintained.

To that end, it’s important to note that Lodgix.com recently relaunched from InnFirst.com, so the history of this blog is relatively small. However the InnFirst.com blog has 24 months of posts that you can also review.

By | 2010-12-01T15:53:11+00:00 December 1st, 2010|News|0 Comments