Gloomy Economy Drives Growth of Vacation Rental Industry
Spurs Increased Interest in Renting Among Second Home Buyers
AUSTIN, TX, March 30, 2009 — HomeAway, Inc. the world’s largest online vacation rental marketplace, today released research confirming the economy is playing a significant role in the growth of the vacation rental industry and in creating opportunities for second home owners.
According to proprietary research commissioned by HomeAway® as part of the National Association of Realtors’ (NAR) 2008 Investment and Vacation Home Buyers Survey released today, the economy has more second home owners than ever before deciding to rent their homes to vacationers.
While the NAR reports a sharp decline in total second home sales for the second consecutive year, the percentage of buyers purchasing with the intent to rent has more than doubled since 2005, reaching a record-high of 27 percent in 2008.
Even for the second home buyers who do not intend to rent over the next 12 months, nearly two-thirds (66 percent) say the economy has increased their interest in renting at some point in the future, reveals the HomeAway proprietary questions.
It also shows owners plan to make their vacation properties available to rent for 15 weeks per year – up from 12 weeks in 2007— and consider the Internet an important marketing tool, with 74 percent planning to advertise online, up from 70 percent in 2007.
These results are consistent with the first major study on the industry released in January 2009, PhoCusWright’s Vacation Rental Marketplace: Poised for Change, which estimates the U.S. vacation rental industry at more than $24 billion, and also projects significant growth in online vacation rental revenues over the next two years.
This same study found owners advertising on the HomeAway sites, HomeAway.com, VRBO.com and VacationRentals.com, spend on average 43 percent less on marketing their vacation rentals, and yield more online booking inquiries and revenue than other sites.
“The down economy has had a significant positive impact on the vacation rental market,” says Brian Sharples, founder and CEO of HomeAway. “NAR’s survey shows more second home owners than ever are realizing that from the get-go they can offset the cost of ownership and in many cases profit from their second homes by renting them out.” In fact, HomeAway owners average $20,000 a year in rental revenue.
Sharples also notes two other important factors influencing the industry: not only have vacation homes sales hit an all-time high of 1.07 million in 2006, but many homeowners also begin to rent their vacation home after one or two years of purchasing it because it’s not used as much as anticipated.
“Not surprisingly, HomeAway is experiencing strong new listings growth across our sites. This increase in supply is being met by an upswing in demand from travelers, who continue to discover the exceptional value that vacation rentals offer compared to hotels,” says Sharples.
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