Expedia struggling with keeping up the rebranded Vrbo

The short-term rental sector has bulldozed its way into many real estate and travel companies and Expedia Group, an online giant for the travel industry, is not immune. Its alternative accommodations rental business, HomeAway, which has recently rebranded to Vrbo, seems to be a worrisome move for the travel agency.

In an earnings call about its first-quarter results, Expedia Group CEO Mark Okerstrom said its short-term rental business of vacation homes and apartments is facing search engine optimization headwinds as it consolidates some of its brands, and because of business model changes made over the last few years.

Vrbo’s gross bookings growth of 5 percent in the first quarter pales in comparison to its  46 percent gross bookings increase in the first quarter of 2018.

Expedia Group Chief Financial Officer Alan Pickerill said “the platform consolidation and brand streamlining related to making Vrbo our primary global alternative accommodation brand contributed to continued SEO headwinds. That, along with tough comps in performance marketing channels, were the primary drivers of the deceleration from Q4 [when HomeAway’s gross bookings increased 15 percent]. We expect the slower gross bookings growth trends to persist in the near term as we work through these changes and lap the elevated performance marketing comps.”

Pickerill added that the company “expects Vrbo’s gross booking trends to improve later this year.”

Expedia Group acquired HomeAway for $3.9 billion in 2015, but the parent company announced it is changing the name of its alternative accommodations division to Vrbo, which it pronounces “ver-boh.”

Expedia said it intends to launch Vrbo-branded sites in several new markets where it doesn’t have a presence and will rebrand country-specific sites to Vrbo in phases over the next year “and beyond.” When Expedia bought HomeAway, it operated 55 local websites, VRBO, and a handful of regional brands.

For now, the HomeAway brand and its regional short-term rental brands, including Stayz.com.au in Australia and Abritel.fr in France, for example, will remain, and travelers can still book on these sites for the time being.

HomeAway, which was founded in 2005, bought VRBO in 2006. Expedia said consumers more readily remember the name Vrbo than HomeAway, and that Vrbo is easier to pronounce than the acronym VRBO. Expedia has operated both HomeAway and VRBO in the United States, and VRBO greatly out-performed HomeAway domestically, officials said.

Expedia had high hopes for HomeAway when it bought the company in 2015 with the idea to compete against Airbnb and Booking.com in alternative lodging. Along the way, as Expedia re-platormed its short-term rental business, it made a series of business model changes, such as adding a traveler fee and downplaying subscriptions in favor of payments per booking. HomeAway missed some performance targets and has proved very heavy lifting for the parent company.

Read more here

Join us in Miami Beach, June 5-7 for the Global Online Marketplaces Summit.