HomeAway Acquires BedandBreakfast.com: Why is This Smart?
Trent Blizzard | 3 March 2010 | 2 Reviews »
Major industry news came out today with the announcement that HomeAway bought BedandBreakfast.com. HomeAway is clearly the leader in 
the entire Vacation Rental (VRBO) space and BedandBreakfast.com is undoubtably the leader in the Bed and Breakfast (B&B) Space. Each of them are bigger than their next few competitors, combined.
We had a big discussion around our office about this topic. Was it smart? Of course, the first question was “Wonder what they paid for it?” Eric or Brian or Carl… please give me a call if you want to disclose that.
Before sharing my opinion, let me give a little background.
Blizzard has worked with BedandBreakfast.com for years (14?)… back when they were InnsandOuts before they were InnkeepersOnly.com, before they were BBchannel.com before they were BedandBreakfast.com… and we have enjoyed working with people there like Eric Goldreyer, Liz Hamilton, Tim Wilson and Sandra Soule… all great people. While many innkeepers have not supported our opinion, we still recommend: “If you are a B&B, you have to be on BedandBreakfast.com. They send oodles of traffic. Pay them more and you get more!” No matter what you think about them, you have to acknowledge that they rule the space and send huge amounts of qualified traffic.
Here are some of our editorials from our newsletter (our blog before it was a blog) back in 1999:
www.bbchannel.com has a special section that is available to its silver and gold members — if you are a silver or gold member, adding a special is a MUST if you want to receive the full value from Bbchannel. (June, 1999)
www.bbchannel.com (aka Innkeepersonly and Innsandouts) unveiled a new gift certificate program in April. Inns that belong to their directory (we highly recommend bbchannel.com) will have the option of honoring gift certificates sold to consumers from the bbchannel.com website. (May 1999)
www.bbchannel.com just changed their domain name to www.BedandBreakfast.com (before that they were also known as Innsandouts.com and Innkeepersonly.com) They also recently merged with World Res, the online reservation booking company. (www.worldres.com). Look for Bedandbreakfast.com to bundle their services more closely with WorldRes in the future. (July 1999)
Blizzard has recommended HomeAway and VRBO.com for years too… not as many as BedandBreakfast.com. Our opinion is the same though, and it also angers many of our Vacation Rental Manager clients who see HomeAway and the VRBO movement as threatening: “VRBO.com is the biggest player in the space. Listing your homes with them will send you hundreds or thousands of leads a year.”
Many Blizzard folks were surprised by this acquisition: it is a big move for a company that specializes in the VR space to move into the B&B space. They are very different markets with very few synergies. It is also odd because the vacation rentals space is much larger than the B&B space. BedandBreakfast.com has 10,000 B&B listed. Orlando or the Outer banks, alone, probably have 20,000 vacation rentals each.
But, we all believe that management at Homeway is smarter than your average bear. Clearly becoming the market leader in another segment of the lodging industry is a solid move (assuming it didn’t cost too much).
But there is more to this story.
I think the real value in BedandBreakfast.com is in their technologies. In my opinion, BedandBreakfast.com has the most polished platform in the industry for separating innkeepers from their money in exchange for better placement. They have excelled at up-selling innkeepers for things like premium listings, banner ads, auction based PPC presence, commission based reservation fees, gift cards, inns for sale, videos, vacuums and more. One reason BedandBreakfast is so good at this is they have been doing it for 15 years. If HomeAway can take those techniques and technologies (developed over a decade of hard-learned experience) and apply them to their larger business model, maybe they could significantly improve their revenue. Maybe they will take the entire BedandBreakfast.com web platform and move their VRBO sites onto it?
BedandBreakfast.com also owns and operates the Rezovation Property Management System and the Webervations Booking Engine. This system would probably be a perfect fit for VRBOs and let HomeAway have a product, ready to go, to sell VRBOs to manage their inventory, provide reporting, and provide online booking.
This also may represent a changeup in HomeAway’s revenue model. Much of the Vacation Rental listings world seems to think that the money is in commissions on top of reservations because the hotel, car and air industry work that way. However, VRBO types have really resisted letting others book their properties in exchange for commissions. Just like the B&B industry! BedandBreakfast.com has perfected the creation of revenue without relying on commissions but instead providing enhanced listing services, booking technologies, and more.
So, watch out Vacation Rental Industry! HomeAway now has a website platform built from the ground up to monetize property listings. It also has a property management software package and a booking engine that is perfect for the Vacation Rental by Owner or even the smallish Vacation Rental Manager. Don’t be distracted by thinking they are getting in to B&Bs… they may just be transferring technologies and expertise. It will be fun to see if they move these technologies from the B&B industry into the VRBO segment of the lodging industry.
March 3rd, 2010 at 7:00 pm
Here is an email from Eric at BedandBreakfast.com to customers:
We are excited to announce that BedandBreakfast.com, RezOvation/Webervations and Inns.com have been acquired by HomeAway®, another Austin, TX-based company.
HomeAway is the global leader in the vacation rental marketplace and is making a large-scale, concerted effort to provide a wide range of alternatives to chain hotels. They are a great fit for BedandBreakfast.com and RezOvation; the same teams you have worked with for years will be staying intact, both in Austin and in Ohio. Like BedandBreakfast.com, HomeAway is focused on making it simpler than ever for travelers to easily find unique and memorable travel experiences. They are used to working with tens of thousands of independent property owners and property managers and helping them promote their businesses to the world. They have built a great company full of smart folks and I am confident that our combined businesses will be able to meet innkeepers’ needs better than ever. HomeAway is also working hard to let folks know that there are reliable alternatives to chain hotels. You may have seen their recent commercial during the Super Bowl featuring the Griswolds. You can visit their website by clicking here, and see the Super Bowl ad here. Please click here to read our FAQ for more details.
Aside from my wife and three kids, this business has been my baby, my life and my passion for the last 15 years; selling the business now was one of the toughest decisions I have ever made. The more I thought about what this opportunity meant for our member innkeepers and customers, as well as for our dedicated team of employees, the more I realized that this opportunity was too good to pass up. I remain as passionate about our industry now as I was when I came up with the idea for the business back in 1994. While I will remain regularly involved in the company as the founder and look forward to seeing many of you at conferences around the country and on the various online forums, I will be stepping down from the day-to-day operations of the business. John Banczak, who has been with the company for six years, will remain with the business and will run both BedandBreakfast.com and RezOvation. Sandy Soule will also be working with the business in a role similar to my own for the next year.
I have complete confidence in the teams we have built and in their ability to continue to deliver the best products and services in the industry, along with the on-going support that you have come to expect. I am equally confident in the folks from HomeAway and their ability to take the business to the next level. Here’s to an exciting year ahead of us as we blaze new trails for the B&B industry to bring you more guests than ever before.
All the best and I hope to see many of you at PAII next week!
Eric
April 8th, 2010 at 1:06 pm
A little late to the party but now I see how Eric has had so much free time to update his Facebook page. :)
I think it is an interesting move, makes a lot of sense for HomeAway B&B’s and vacation rentals are somewhat similar with a large number of independent owners. The goal with WorldRes was to try and bring Vacation Rentals and B&B’s together under one roof, but then came the big crash, It felt like WorldRez never really took the B&B industry very seriously maybe HomeAway will see the great value in the BedandBreakfast.com clients and all the hard work Eric and his teams have put in over the years.
Congrats to Eric hope he enjoys his semi retirement.