The $85 billion vacation rental market is projected to grow 13% annually. But the industry faces many concerns that analysts believe are limiting its growth potential. A study conducted to understand the problems facing the industry found that 46.3% of those surveyed have never used an online service to rent a vacation home in the past three years. This high figure does suggest that the industry has significant potential.
Vacation rental site HomeAway’s (Nasdaq:AWAY) Q4 revenues grew 28.5% over the year to $58.5 million driven by growth in subscription and listings. Listing revenues grew 25.9% over the year to $40.3 million. They reported a break-even quarter this year compared with a loss of $0.23 per share reported a year ago.
Among operating metrics, paid listings grew 21.5% over the year to more than 640,925, with average revenues per listing growing to $321 from $311 reported a year ago. For the year, average revenue per listing stood as $341, compared with $318 recorded in 2010. During the quarter, the renewal rate of 76.8% was also higher than previous year’s renewal rate of 75.9% and the previous quarter’s renewal rate of 76.4%. Visits to their site grew 22% over the year to 97.1 million during the quarter and 24% over the year to 495.2 million for the year.
The company ended the year with revenues growing 37.1% over the year to $230.2 million, with listing revenues growing 30.5% to $199.5 million. For the year, net loss per share of $0.31 was significantly lower than the net loss of $0.48 per share reported a year ago.
For the current quarter, they project revenues of $63.7 million-$64 million and adjusted EBITDA of $13.0-$13.1 million. The company expects to end the current fiscal year with revenues of $276 million-$280 million with an adjusted EBITDA of $80 million-$82 million.
HomeAway’s Expanding Offerings
Last quarter, HomeAway expanded their social networking feature by introducing a property manager–specific section on their Community site. Although HomeAway remains focused on vacation rental owners, the Community link will help vacation rental managers interact with each other to grow their vacation rental business. Managers will have access to blogs from experts in the industry, how-to articles and forums, and they will be able to create private groups to organize conversations based on their interests. The site will also feature a vendor showroom to help the managers shop and compare products and services, such as reservation and payment systems and website design services, to name a few.
HomeAway’s Mobile Apps
HomeAway also expanded their mobile offerings and launched a free iPad application. Prior to the iPad app, HomeAway already had an iPhone app and an Android app. The app is available free to be downloaded from the iTunes store. The app will give users access to larger photos and enhanced readability along with the ability to access Google Maps to map the rental and share the rental using social media tool such as Facebook and Twitter.
HomeAway’s stock is trading at $25.91 with a market capitalization of $2.09 billion. Last year, the company issued their stock at $27 in June IPO. The stock touched a high of $45.75 in September 2011.