Expedia acquires HomeAway for $3.9 Billion

Expedia acquires HomeAway for $3.9 Billion

Expedia has gobbled up another aspect of the travel and vacation business, today announcing the acquisition of vacation rental company (and Airbnb competitor) HomeAway for $3.9 billion in cash and common stock.

Expedia CEO Dara Khosrowshahi explained the move in a press release:

We have long had our eyes on the fast growing ~$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

HomeAway launched in 2005 as a vacation home rental service before pivoting in 2013 to a slightly more Airbnb-like pay-per-booking consumer model. In 2014, the company announced it had more than 1 million vacation listings.

With the acquisition, Expedia grows its travel company umbrella. Currently, the company also owns Hotwire, Trivago, Travelocity and Hotels.com, among other vacation-oriented brands. HomeAway also owns other brands, including VRBO.

The consolidation looks like a fairly plain effort to combine resources and go up against Airbnb. It will be interesting to see how travel deal-oriented sites interact with rental sites — there could be an end-to-end system designed to help people bundle flights and home rentals.

But the space is also undergoing trouble, as Airbnb just won a contentious battle in San Francisco to stave off greater regulations imposed on the company. It’s clear that regulators are unhappy with the way rentals are operating as-is — whether that will change the market materially remains to be seen.

EXPEDIA TO ACQUIRE HOMEAWAY, INC [PDF]

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