U.S. vacation-rental marketplace,
), recently announced that it has acquired Stayz Group, a
vacation rental site in an all cash deal for $198 million.
Based in Australia, Stayz Group is an online marketplace which
allows property owners to list and promote their holiday
accommodations. In fiscal 2013 (ended Jun 2013), Stayz generated
the majority of its AU$25.4 million revenues through the
commission-based business model, HomeAway notes. The company
operates under a commission-based pay-per-booking model which is
similar to that of HomeAway's pay-per-booking model.
HomeAway's pay-per-booking product, introduced in mid-October,
allows property owners and managers to list their property on
HomeAway.com without paying any upfront fees. They only have to
pay 10% of the booking amount once the property is booked.
Per the deal, Stayz Group's inventory will be integrated into
HomeAway's pay-per-booking inventory in the U.S. and Europe,
helping HomeAway generate additional traffic. Management expects
the acquisition to expand the company's pay-per-booking business
and thereby accelerate listings growth in the near term.
We believe the deal will help HomeAway to better position
itself in the competitive vacation-rental industry. The alliance
will boost the company's extensive vacation rental portfolio by
adding approximately 33,000 Australian vacation rental
properties. Additionally, the deal will strengthen its presence
in the Asia-Pacific region, thereby increasing its overall market
The company is investing in international markets because of
the higher growth potential of these markets. Last month, the
company acquired New Zealand-based vacation rental site,
Bookabach, which will broaden HomeAway's reach within the Asia
Pacific market. Earlier in July, the company acquired Asian
vacation rental start-up - Travelmob - and invested in China
vacation rental player - Tujia.
Moreover, HomeAway has been trying to improve its vacation
rental portfolio by entering into a few important alliances. Last
month, the company expanded its distribution partnership with
Interhome AG to add vacation rental properties to its network
through the pay-per-booking product. In October, the company
signed an agreement with
) to expand online travel accommodation options by featuring
HomeAway vacation rental properties on Expedia.
We believe these strategic partnerships and acquisitions will
help HomeAway to grow in the future.
HomeAway, the world's leading online travel leader, reported a
strong third quarter, driven by growth in the overall online
travel booking industry. The company reported revenues of $90.1
million, up 4.0% sequentially, 23.3% from the year-ago period and
above management's expected range of $88.6 million-$89.6 million
driven by strong performance in both listing and other
Currently, HomeAway has a Zacks Rank #3 (Hold). Some
better-ranked stocks worth considering at the current levels are
Regal Entertainment Group
SeaWorld Entertainment, Inc.
). Both these stocks carry a Zacks Rank #2 (Buy).
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