Business is pretty good for HomeAway, which operates the world’s largest network of vacation rental sites. It’s so good that it has bought a spot in the 2010 Super Bowl, based on the 1983 movie National Lampoon’s Vacation and featuring the stars of the comedy, Chevy Chase and Beverly D’Angelo. HomeAway CEO and company co-founder Brian Sharples talked to Brandweek about how the brand has prospered during the recession and how it plans to react if and when the economy improves. Here are some excerpts:
Brandweek: Consumers are cutting back from luxury and discretionary spending in a recession. How’s that impacted the vacation rental business?
Brian Sharples: We’ve had very strong growth here at HomeAway. We’re the biggest international company in the vacation rental business. If we’re doing well, the [overall] vacation rental business is probably doing pretty well also. What’s driving that [growth] is that vacation rentals provide a higher value alternative to hotels, especially for families or groups of people traveling together. The recession seems to have helped the business more than hurt it.
BW: So, is the vacation rental business on track to outpace hotels?
BS: Awareness continues to increase. If you go back to a few years ago, 7 percent of vacationers were staying in vacation rentals. Now, that number is closer to 10 percent. We think that number can get as high as 20 percent or 30 percent. I think it will continue to grow. We saw an unprecedented construction of new vacation homes in all the coastal markets, in ski areas and all over the world from 2000 to 2007.
BW: OK, so the market is in your favor. Are you increasing ad spend as a result of that?
BS: Historically, virtually all of our advertising has been concentrated in two areas: search and e-mail marketing. What that has done for us is allow us to manage the traffic coming to our site and the revenue growth of our business, but we’ve gotten to a point now where the company is big enough where we’ve decided to augment that with brand and awareness building programs. Despite our size—and though we dominate this business—our unaided [brand] awareness among consumers is still extremely low. Fewer than one out of 10 people who are in our target markets know who we are.
BW: You’re kicking off the TV campaign with HomeAway’s first Super Bowl spot, which revives the 1983 hit, National Lampoon’s Vacation. Why that particular movie tie-in?
BS: We started with the Griswolds idea even before the Super Bowl idea ever even came about. Our business is mostly about family travel. (Eighty percent to 85 percent of vacation rentals [booked] through our Web site are by families.) We also tend to deal with a demographic that’s in the 35-60-year-old range, and that demographic actually matches up very nicely with the audience that has nostalgic feelings for this movie. It was a very popular movie.
BW: What’s your marketing strategy for the long haul? Do you think you’ll be able to maintain this momentum once the recession is over?
BS: Our ad strategy is actually to position this category against hotels. The [TV] ad content featuring [actors] Chevy Chase, Beverly D’Angelo and the Griswolds is really about highlighting the benefits of vacation rentals versus hotels in the areas that are unassailable. Space is a huge one. The bottom line is, you rent a house, you get a lot more space—kitchen, living room, etc. Hotels, [on the other hand], are known for a lot of hidden charges, whether it’s mini bars or Internet [usage], so we’ll play off that. And privacy is a big issue. You go out into a swimming pool, and there are 200 other people and you can’t even find a chair. That’s the way we’re setting up [our brand] for the future. If we can create a mind-set where, when people are planning their vacations, they say, “Gee, honey, I know we’re looking at this resort, but why don’t we also check out HomeAway?” Even if they say, “Let’s check out a vacation rental home, and see what the options are,” if they go to the Internet and type in “vacation rental,” they will get to us because we have extensive search [buys]. That’s the dialogue we want to get going.