By Aisha Al-Muslim
Expedia Group will use its vacation home rental brand Vrbo as the nameplate for expanding its alternative accommodations business world-wide, a move that comes as the company faces increasing competition in the sector.
Expedia changed the name of its global alternative accommodations division to Vrbo from HomeAway, the online travel company said Thursday. Through a phased roll-out, the company plans to expand Vrbo to international markets over the next year or more.
The HomeAway.com and Abritel.fr websites will continue to operate under the Vrbo segment. Vrbo now offers over 1.9 million bookable listings online.
Part of the reason for the change, the Bellevue, Wash.-based company said, is that Vrbo has outperformed HomeAway in the U.S. as a search term based on Google Trends data.
"HomeAway has served us well over the years but was originally chosen for its descriptive nature for what was an emerging part of travel," John Kim, president of Vrbo, said in a statement. "Now that booking a home for a trip is mainstream, we need a lifestyle brand that travelers easily remember and love."
Vrbo was founded in 1995 and acquired by HomeAway in 2006. Expedia bought HomeAway in December 2015.
In March, Expedia introduced a marketing campaign with a new logo and pronunciation for Vrbo, an acronym for vacation rental by owner where each letter is pronounced, to "ver-boh." The company said its research indicated consumers found the new pronunciation easier to say and easier to remember than HomeAway.
However, Expedia also said Thursday growth of Vrbo slowed from the prior year, with gross bookings rising 5% compared with the fourth quarter's 15%.
Shares in Expedia fell 3.5% in after-market trading as the company also narrowed its quarterly loss by 25% to $103 million and revenue rose 4% to $2.61 billion.
Making Vrbo its primary alternative accommodation brand followed struggles with search engine optimization, company executives told analysts during an earnings conference call Thursday. The company expects the slower gross bookings growth trends to persist for now as it works through its changes, but expects Vrbo's gross bookings trends to improve later this year, they said.
"Despite this near-term slowdown, consolidating the bulk of our efforts behind the Vrbo brand globally and operating on a unified world class e-commerce platform will allow us to maximize our potential in alternative accommodations in the coming years," Expedia Group Chief Executive Mark Okerstrom said on the call.
The company's home-rental businesses competes with Airbnb Inc. and other home-sharing companies in one of the lodging industry's hottest segments.
Marriott International said recently it plans to move deeper into the home-sharing space.
Hilton Worldwide Holdings has said it isn't a business it is currently pursuing.
Marriott, the world's biggest hotel operator, said it will soon offer accommodations in about 2,000 high-end homes throughout 100 markets across the U.S., Europe and Latin America.
"I think it's super interesting," Mr. Okerstrom said on the call about Marriott getting more into home-sharing. "I think it generally could be a really good thing for the industry to add this type of professionalization to the space and I think we're very hopeful that we can help our partners as they develop these new inventory types, just like we have with all of their other ones."
Write to Aisha Al-Muslim at firstname.lastname@example.org