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TheStreet Open House

Vacation Rental Owners Profit From Strong Bookings And Increased Rates

Stocks in this article: AWAY

In the latest industry research from the “HomeAway Vacation Rental Report: Owner Edition,” HomeAway, Inc. (NASDAQ: AWAY), the world’s leading online marketplace for vacation rentals, highlights the strong performance of its vacation rental owners during the 2013/2014 winter season and previews a successful 2014 summer season.

A Strong 2013/2014 Winter Season

Just as HomeAway reported for summer 2013, nearly nine in 10 vacation rental owners (84 percent) report this year’s bookings are about the same or better than the previous year. In addition, 93 percent of owners report they did not lower rental rates from last winter, and 21 percent of owners even raised their rates.

Owners who report the winter season as their peak rental season experienced a 70 percent occupancy rate. In comparison, Smith Travel Research reports that U.S. hotel occupancy rates averaged 57.5 percent booked in the fourth quarter of 2013 and 60.2 percent thus far in 2014 1.

For perspective on how impactful maintaining a strong rental season can be, more than half (54 percent) of owners surveyed with a mortgage are able to cover at least three quarters of their mortgage payment from renting their home - an increase of nine percent year-over-year from 2012. Additionally, approximately two-thirds (65 percent) cover at least half of their mortgage payment.

“What stands out to me from this year’s survey the most is not only the consistency we see year-over-year with successful bookings, but those bookings are taking place at gradually higher rental rates each year - a true testament to the inherent value of the vacation rental experience to our travelers,” says Brian Sharples, co-founder and chief executive officer of HomeAway.

Profit from Vacation Rentals Remains Strong

On average, HomeAway vacation rental owners charge a weekly rental rate of $1,520 ($217/night) and make their home available to guests for an average of 36 weeks each year 2. The rental of vacation homes thus grosses an annual income of $27,360 for these owners.

The annual rental income is vital to those 65 percent owners who cite their goal for renting their vacation home is to “cover some” or “all of my expenses;” and especially important to those 19 percent of owners who “wanted to generate a profit.”

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