Analyst optimistic about new HomeAway service
NEW YORK (AP) — HomeAway's new pay-per-booking service could be a big revenue boost for the vacation rentals company, an analyst said Friday.
In HomeAway's current model, subscribers pay the company upfront for running its listings on its websites. Starting this summer, vacation rental owners can instead put up a rental listing for free and then pay HomeAway a percentage once the listing is booked. Property managers will be able to use the pay-per-booking service later this year.
The new service could attract millions of new customers who think the current model is too expensive or who don't want to subscribe to a service, said Chad Bartley of Pacific Crest Securities.
In a client note, he estimated that the pay-per-booking service could produce revenue from $13 million to $101 million in 2014. Annual revenue from the new offering could eventually reach $304 million, according to his analysis.
That would be significant for the Austin, Texas, company. Its revenue rose 22 percent to $280 million last year.
A representative for HomeAway did not immediately respond to an email seeking comment.
Bartley is optimistic about the company's prospects. He has an "Outperform" rating on the stock.
HomeAway runs websites including HomeAway.com and VacationRentals.com in the United States and related websites overseas.
Shares rose 81 cents, or 2.6 percent, to $32.55 in afternoon trading. The stock is up nearly 50 percent in 2013. The stock has been volatile, ranging from $19.19 to $34.30 in the past 12 months. HomeAway went public in June 2011 at $27 per share.