Get instant access to this case solution for only $15

HomeAway Organizing the Vacation Rental Industry Case Solution

Solution Id Length Case Author Case Publisher
2376 1611 Words (7 Pages) Rory McDonald, Feng Zhu, Cheng Gao Harvard Business School : 615036
This solution includes: A Word File A Word File

HomeAway has had a successful decade with rapid growth due to constant innovations in terms of technology and value added services and digital strategies; It became the leading vacation home rental marketplace worldwide. HomeAway faces huge competition from hotels, resorts, and other OTAs like Trip Advisor and rental services such as Airbnb. Sharples, the founder of HomeAway, now has to make very important decisions about introducing a new revenue model for HomeAway or continuing with the current revenue model, which has been proved successful for the first ten years of the company. Sharples also has to decide, if a long term partnership with HomeAway’s competitor is the right move forward. The decisions of Sharples will determine the future growth of HomeAway.

Following questions are answered in this case study solution

  1. Problem statement

  2. Evidence

  3. Recommendations and Action Plan

Case Analysis for HomeAway Organizing the Vacation Rental Industry

2. Evidence

Exhibit 1 shows the SWOT Analysis of HomeAway that is an important tool for strategy making. The strength of HomeAway is its leading position in the vacation rental marketplace in the short span of 10 years through its successful strategies. The leading position would attract more suppliers to list their vacation houses on HomeAway, increasing the company’s revenue and strengthening supply aggregation of the company. It will also attract new customers due to high brand reputation. The second strength of the company is its huge supplier base .The Company has 1 million Vacation houses listed on their website indicating the wide and strong supplier base of HomeAway. These suppliers expand across Europe and America enabling HomeAway to capture new market in new geographic regions. Another strength of the Company is the constant innovation in its strategies that has helped HomeAway to attain the rapid success and gain competitive advantage over other travel accommodation providers. 

The weakness of the company is the current subscription model of HomeAway, which was its primary revenue model but it only attracted a limited number of suppliers. It seemed like a suitable and economical model for vacation home owners who owned a smaller number or property and who were interest in long-term rental opportunities. However the model was discouraging for professional property managers who listed a huge number of vacation homes and infrequent property listers. The subscription model was too expensive and inconvenient for them.

The case discusses about the huge growth opportunity that lies for HomeAway to expand internationally. There are 15 million vacation properties spread globally for HomeAway to attract and list on their website. The vacation rental segment is the second largest travel accommodation segment after hotels and resorts. This indicates that vacation rental is a growing industry and HomeAway can thrive in the future years too. HomeAway also faces threats in terms of the intense competition from both traditional and untraditional rivals. Hotels and resorts are the largest segments of travel industry and pose a serious threat to the vacation rental segment as it is a close substitute. The rapid growth of HomeAway attracted new business to expand in the vacation rental industry like Trip advisor and AirBnB is one of the toughest competitions of HomeAway. The startup gain rapid growth and huge publicity and funding. AirBnB has the potential to steal market from HomeAway.

Exhibit 2 shows Porter five forces which analyzes the environment, the industry operates in and depicts the competitive intensity in the industry. Since the case discusses about the various competitors of HomeAway who are a threat to the market share and growth of the company, HomeAway needs to analyze the potential threats and develop strategies to overcome them. The first force, the threat of entry in the vacation house rental industry is low to medium. There is low awareness about the category of vacation rentals among the masses. People are mostly familiar with hotels and resorts only, when it comes to travel accommodation. Moreover despite a high number of vacation houses, the industry for vacation rentals is fragmented and dispersed making it unattractive for new entrants. However the rapid success of the HomeAway changed the scenario and may have increased the threat of entry by attracting new companies.

Get instant access to this case solution for only $15

Get Instant Access to This Case Solution for Only $15

Standard Price


Save $10 on your purchase


Amount to Pay


Different Requirements? Order a Custom Solution

Calculate the Price

Approximately ~ 1 page(s)

Total Price


Get More Out of This

Our essay writing services are the best in the world. If you are in search of a professional essay writer, place your order on our website.

Essay Writing Service
whatsapp chat icon

Hi there !

We are here to help. Chat with us on WhatsApp for any queries.

close icon