capital raised by startups in the vacation rental industry

VRM IntelCapital Raised by Startups in the Vacation Rental Industry

2011-2013

November 2013Amy Hinote | [email protected]

$530 million raised

2 Amy Hinote | 251-455-4994 | [email protected] | http://www.vrmintel.com/

• Over $530 million in disclosed angel and institutional funding has been raised by startups in the vacation rental industry since 2011.

• 88% of that investment in consumer facing websites.

• Over 72% of disclosed capital has been injected into U.S. companies.

mailto:[email protected]

http://www.vrmintel.com/



Supporting new players


Can the market support these new players?

• According to the PhoCusWright’s U.S. Vacation Rentals 2009-2014: A Market Reinvented, “Vacation rentals represent a more than $24 billion opportunity in the U.S., that’s more than one fifth of all hotel room revenue and 8% of the total U.S. travel market.”




http://www.phocuswright.com/products/4252

http://www.phocuswright.com/products/4252


Supporting new players


• The Vacation Rental Managers Association (VRMA) reported the largest Annual Conference in its history in October of this year and is getting ready for their second annual European Seminar in Bruges, Belgium in December.

• HomeAway, Inc. (NASDAQ: AWAY), the current leading marketplace for vacation rentals, is expecting 2013 revenues around $342 million.




http://www.vrma.com/

http://www.homeaway.com/

http://www.homeaway.com/


Market Saturation?


At first glance, the market may appear saturated. However, a closer look into the distribution of injected capital exposes market opportunities. Out of $530 million in funding, over $470 million went to consumer websites with approximately $458 million being spread out among four consumer-facing websites:

• Airbnb (U.S.): $318M• TruJia (China): $64M• Housetrip (UK): $60M• OneFineStay (UK): $15.9M





The Opportunity

Remarkably absent is investment in operational activities and services to support this sprouting marketplace.

Both Vacation Rental Managers and individual home owners have increasing operational needs:

• Websites• Mobile Communications• Channel Management• Housekeeping• Property Management Software• Marketing Automation• Payment Services• …and many more






The Opportunity

Out of $530 million, less than $10 million was raised by companies providing supporting products and services to the vacation rental industry.






The Opportunity

“We believe the opportunities for new consumer plays in the vacation rental market are limited with such well-established players like AWAY and now Airbnb so well-entrenched,” said at Turnkey Vacation Rentals. We believe there is a huge opportunity in the value-added-services area of vacation rentals and believe the next wave of VR startups will help round out the guest and home owner experience while working with entrenched players as opposed to competing with them.”

John Banczak, co-founder and Executive Chairman, TurnKey Vacation Rentals, a marketing and professional management solution for individual vacation rental owners, who

picked up $1.5 million in seed funding from an all-star cast of angel investors.


http://turnkeyvr.com/

http://turnkeyvr.com/

http://www.vrmintel.com/ex-homeaway-software-hasp-exec-secures-1-5-mil-in-all-star-cast-of-angel-investors/





Competition for VRMs


“As the vacation rental industry grows, vacation rental professionals have an opportunity to further define and raise awareness of the professionally managed segment.

More than half of the vacation rental market’s total rental revenue now goes to industry professionals, up from 43% in 2007, according to PhoCusWright. For vacation rental professionals this translated to a more than $11.6 billion marketplace in 2012 and the total U.S. vacation rental industry is expected to reach $25.8 billion by 2014.”

Heather WeiermannVRMA President





Competition for VRMs


With over $470 million injected into consumer-facing websites, online competition for travelers looking to stay in a short-term rental will likely increase, resulting in:

• Rising online marketing expenses• Search Engine Optimization (SEO) concerns• Increased focus on customer retention efforts• Branding challenges• Inventory acquisition and retention efforts• Increased demand for revenue management tools and services




http://www.vrmintel.com/googles-organic-keywords-not-provided-10-easy-ways-for-vacation-rental-managers-to-adapt/


Advantages for VRMs


However, there are notable advantages to the addition of well-funded, visible players in the Vacation Rental Industry:

• Increased education and awareness of vacation rentals as a lodging option

• More cohesive effort impacting government regulations concerning vacation rentals

• Increased options to homeowners and vacation rental managers to reach new guest markets

• New and more cost-efficient technology products to help service vacation home management

• Less fragmented marketplace





Investment by Company


Company Investment YearAirbnb 112,000,000 2011

Evolve Vacation Rental Network 530,000 2011HouseTrip 2,700,000 2011HouseTrip 17,000,000 2011Inspirato 17,500,000 2011OneFineStay.com 3,700,000 2011PayByGroup 50,000 2011Tripping.com 1,000,000 2011Airbnb 6,620,000 2012HouseTrip 40,000,000 2012Inspirato 15,500,000 2012Inspirato 20,000,000 2012Luxury Retreats 5,000,000 2012MyVR 1,400,000 2012OneFineStay.com 12,200,000 2012Oravel Not Disclosed 2012

Company Investment YearTravelmob *Purchased by HA 1,000,000 2012

WebChalet 200,000 2012Airbnb 200,000,000 2013BookingPal 1,500,000 2013Demeuere 4,000,000 2013Evolve Vacation Rental Network 2,700,000 2013Kigo 2,000,000 2013PayByGroup Not Disclosed 2013TripRental 500,000 2013TripVillas 1,000,000 2013TuJia 64,000,000 2013TurnKey Vacation Rentals 1,500,000 2013Vacation Futures 40,000 2013Vacation Futures 50,000 2013Zaranga 100,000 2013





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