Bank of America Reacts to HomeAway Expanding Expedia Partnership

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In a report published Friday, Bank of America analyst Nat Schindler reiterated a Neutral rating and $34.00 price target on
HomeAway
AWAY
. In the report, Bank of America noted, “Yesterday at HomeAway's 2014 RezFest, HomeAway announced that it was expanding its partnership with Expedia and will now have over 115K pay per booking (PPB) properties listed on Expedia's U.S. website. For now these are only PPB listings from property managers, but HomeAway plans to add subscription listings in the future with a booking fee similar to PPB (e.g. around 10%). We view the expanded partnership positively as it gives HomeAway distribution through one of the world's largest travel websites and will help it monetize PPB listings.How Expedia chooses to integrate the PPB listings will determine the revenue impact to HomeAway, though we note the economics on HomeAway's PPB listings (revenue share of 10% booking fee) are significantly less than hotels' 15%-18% booking fee. Initial signs are positive though as checks on Expedia show vacation rental listings at the top of the sort in some markets. Overall, we see this as a positive partnership that has potential to lift HomeAway's revenue and margins long term.” HomeAway closed on Thursday at $33.55.
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Posted In: Analyst ColorReiterationAnalyst RatingsBank of AmericaNat Schindler
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