Expedia enters short-term home rental market

Seems like Expedia Group Inc. is taking notice of the red-hot online market that orbits around short-term home rentals.

In a move sure to counter Airbnb, Expedia is “ready to step up its efforts to add more house listings in a bid to catch up with the scale of competitors” after three years of upgrades and planning on its HomeAway platform.

“Phase one was just getting the platform working and getting people online… Phase two is about property acquisition,” said Expedia CEO Mark Orkerstrom.

Airbnb altered the hospitality market when it convinced average people to rent out their homes in cities. Today, Airbnb has over 4 million listings worldwide.

In 2015, Expedia entered the sector when it purchased HomeAway, now upgraded to feature 1.7 million online listings. HomeAway’s rivals include Bookings Holdings Inc. and Airbnb, “each offering about 5 million listings” according to Bloomberg.

HomeAway generates around 10% of Expedia’s total revenue at US$300 million per quarter. Last quarter, when HomeAway brought all of its listings online and introduced its booking fee, Expedia shares increased 11% following an earnings report.

Making money with home rentals requires a different approach than traditional hotel bookings or travel agency commissions. Signing on with a major hotel chain can bring thousands of new bookings to Expedia’s site, but signing on with a property manager overseeing local rentals could add only a few listings at a time.

Expedia, like Airbnb, believes the key is allowing hosts to sign up their properties on their own, without the company having to knock on doors and bring people on-board.

Expedia’s former CEO, Dara Khosrowshahi, quit to run Uber Technologies Inc. New CEO Okerstrom was thought to simply continue the trajectory of his old boss, but it’s clear with this HomeAway effort that Okerstrom is working to facilitate new growth opportunities for Expedia in his own way.

“The power of Expedia Group is the collective,” says Okerstrom. “That’s been a new realization for the organization.”