According to market reports, the global travel and tourism industry is projected to grow 4% annually over the ten year period from 2012 to be worth $10 trillion in 2022. The growth will be driven by emerging markets and the Asia Pacific regions. Online vacation rental site, HomeAway (NASDAQ:AWAY) is counting on this market growth.
HomeAway’s saw third quarter revenues grow 23% over the year to $90.1 million, driven by a 23% increase in Listing revenues to $75.5 million. Other revenues grew 25% to $14.7 million. For the quarter, non-GAAP net income grew from $0.14 a year ago to $0.19.
During the quarter, paid listings grew 7% over the year to over 773,350. Average revenue per listing grew 16% to $390. Site visits grew 27% to 198 million.
For the current quarter, the company expects revenues to be $85.5 million to $86.5 million with an adjusted EBITDA of $22.6 million to $23.1 million. Revenues for the year are projected to be $341.7 million to $342.7 million with an adjusted EBITDA of $98.3 million to $98.8 million.
HomeAway’s International Growth
HomeAway continued their international expansion through acquisitions. During the recent quarter, they announced the acquisition of Australia’s vacation rental group, Stayz, for an estimated $198 million. Stayz Group operates the Australian websites Stayz.com.au, Rentahome.com.au, and TakeABreak.com.au. Stayz has an inventory of 33,000 Australia-based properties. The move will help HomeAway grow in the region.
Within the region, they had also acquired a 55% stake in Bookabach Limited, operator of a leading vacation rental site in New Zealand. The site includes an inventory of 8,000 property listings in New Zealand, Australia and the Pacific islands. Terms of the deal were not disclosed.
Besides acquisitions, the company is also expanding their partnerships and tied up with European vacation rental company, Interhome AG. Through the partnership, thousands of online bookable vacation rentals in Europe will be available at HomeAway’s sites around the world.
As part of their growing product line, they recently introduced Luxury Rentals from HomeAway, a section that is used for high-end vacation rentals to feature over 800 luxury vacation rental options in 40 countries. These properties are curated by international luxury travel experts at Andrew Harper, which is known for Andrew Harper’s Hideaway Report.
Recently, they also entered into an agreement with online travel booking site, Expedia.com (NASDAQ:EXPE). As part of the agreement, Expedia users will now be able to view HomeAway vacation rental properties on Expedia.com. As part of the pilot, scheduled for early this year, Expedia will carry inventory of HomeAway’s properties across the U.S. and Mexico. Currently, Expedia already shows results for BedandBreakfast.com, a website operated by HomeAway.
Market reports peg the vacation rental industry to be worth $85 billion a year compared with the hotel industry’s revenues of $593 billion. Analysts believe that in times to come, the vacation rental industry will hold a bigger pie. The industry has already grown 98% over the period 1999-2011. As travelers from emerging markets continue to rise, spending on vacation rentals should increase. HomeAway’s stock is trading at $41.34 with a market capitalization of $3.55 billion. It touched a 52-week high of $42.57 earlier this month.