VACATION RENTAL INDUSTRY TRENDS. VRMA Europe 2015

VACATION RENTAL INDUSTRY TRENDS VRMA Europe 2015

David (vacation rentals) vs. Goliath (hotels) US + EU market size $230B $85B Hotels Vacation rentals Properties 0.3M 6.1M VR share professionally marketed (PM or realtor) United States Spain UK Italy France Germany 27% 25% 24% 30% 43% 40% Source: Radius Global Market Research 2011; VR defined as vacation homes rented short-term to vacationers 2+ weeks/year HomeAway Confidential 2014 HomeAway. All rights reserved. 3

In terms of supply, vacation rentals are still a small percentage of rentable properties Source: Radius Global Market Research 2011; VR defined as vacation homes rented short-term to vacationers 2+ weeks/year HomeAway Confidential 2014 HomeAway. All rights reserved. 4

In terms of demand, vacation rentals have a 20%-30% share and grew nicely in 2014 in France and the UK

Families/groups take 54% of long-stay vacations; VRs have 27% share of this segment France example* Long-stay vacation party size % of adults on most-recent long-stay vacation 1=solo 2% 3+ family or group 54% 2=couple or friends 44% Accommodation chosen by party size % of adults on most-recent long-stay vacation * UK and DE numbers are very similar, +/- 2%, to FR Source: HomeAway research based on national survey of 1,000+ adults who take long (4+ day) vacations, 2011 HomeAway Confidential 2014 HomeAway. All rights reserved. 6 31% 13% 1% 47% 7% 39% 24% 2% 16% 19% 30% 22% 1% 19% 27% 1 solo 2 couple or friends 3+ family or group Hotel or resort Other Cruise Friend or family Vacation rental

Source: Ipsos, HomeAway Brand and Category Awareness Tracker (US Q4:2014, France and UK Q3:2014, Germany, Spain and Italy Q4:2014) HomeAway Confidential 2014 HomeAway. All rights reserved. Vacation rental awareness and usage is much higher in Europe than in the US Unaided vacation rental awareness Percentage of adults Series 18+ 1 Vacation rental usage Percentage of adults Series 18+ 1 Spain 67% France 68% France 62% UK 62% Germany 61% Spain 57% UK 57% Italy 57% Italy 53% Germany 45% United States 32% United States 36%

VR online search demand up 14% - 28% in Q4 2014 Google YoY query growth for vacation rental terms YoY query growth, Q4 2014 United Kingdom Germany France Italy 14% 18% 20% 28% Source: Google search volume, all devices, terms related to the vacation rental category in local language, 2011 through 2014 HomeAway Confidential 2015 HomeAway. All rights reserved. 8

The VR target customer: 55% families and group travel 100% Travel party by long-stay vacation type (UK) 80% 60% 40% 20% 0% Vacation rentals Hotel/resort Friend's or family's home Cruise ship Average travel Party size 3.9 3.0 2.3 2.9 Alone My spouse/partner/s.o. A friend A group not including my family A group of family and non-family My family Source: HomeAway research based on national survey of 1,126 adults who take long (4+ day) vacations, June 2011 HomeAway Confidential 2014 HomeAway. All rights reserved. 10

Nearly 20% of HomeAway travelers are first-time category users Vacation rental experience Source: HomeAway Customer Satisfaction Survey, Q4 2014 HomeAway Confidential 2014 HomeAway. All rights reserved. 12

Travelers pick VRs and avoid hotels for the amenities, space, bedrooms, and value Source: PhoCusWright s European Vacation Rental Marketplace, 2011. Q. Why did you not book a vacation rental in the past two years? HomeAway Confidential 2014 HomeAway. All rights reserved. 13

Several obstacles to VR use can be overcome: didn t occur, easier to find a hotel, expensive, couldn t find Source: PhoCusWright s European Vacation Rental Marketplace, 2011. Q. Why did you not book a vacation rental in the past two years? HomeAway Confidential 2014 HomeAway. All rights reserved. 14

Looking forward, the word will get out: VR users are highly satisfied and likely to evangelize Source: PhoCusWright s European Vacation Rental Marketplace, 2011. Q. How likely are you to do the following with regards to renting a holiday property again? HomeAway Confidential 2014 HomeAway. All rights reserved. 15

The internet has become the primary influence on traveler behavior Source: Flash Eurobarometer 392, Preferences of Europeans Towards Tourism, February 2014, Conducted by TNS Political & Social at the request of the European Commission, Directorate-General for Enterprise and Industry HomeAway Confidential 2014 HomeAway. All rights reserved. 18

To fully leverage the internet to attract travelers, businesses must optimize all sources of traffic Case study sources of HomeAway website traffic Traffic source Percentage Levers used Direct-to-site 28% Millions of word-of-mouth referrals Repeat customers Brand marketing (e.g., TV and display advertising recall) Referring websites 14% Media coverage, social networks, owner/pm sites, etc. Commercial partners (tourist boards, affiliates, etc.) Email marketing 9% Email marketing to 19M customer database Sophisticated tools for targeting/optimizing messages Search engine PPC 9% Keyword marketing spend Sophisticated tools for targeting/optimizing keywords Search engine organic 40% SEO staff devoted to content creation, link building, etc. Years of accumulated search engine indexing Source: HomeAway and Adobe web analytics tools, 2H2012 HomeAway Confidential 2014 HomeAway. All rights reserved. 19

Traveler expectations when evaluating VR property listings Criteria Minimum expectation among majority of travelers % of travelers who prefer this Photos 6 or more 73% Reviews 3 or more 81% Average review rating 4-5 stars out of 5 57% Description detail Complete / detailed 60% Amenities detail Complete / detailed 61% Map location General location (or better) 76% Rates information Rates table (dates & # days) 72% Calendar update frequency Within 7 days (or better) 78% Inquiry response time 12-24 hours (or better) 52% Book it now button Available on listing 92% Payment preference Credit card 61% Source: HomeAway survey of 1,441 travelers, April 2013 HomeAway Confidential 2014 HomeAway. All rights reserved. 20

2.9M vacation rentals (UK/FR/DE/IT/ES) rent for an average 17 weeks per year Vacation homes: UK, France, Germany, Italy, Spain Millions (100% = 11.8M) 8.9 2.9 Vacation rentals (2+ weeks/year) 2.1 0.8 For rent by PM or realtor Source: Radius Global Market Research; VR defined as vacation homes rented short-term to vacationers 2+ weeks/year, 2011 HomeAway Confidential 2014 HomeAway. All rights reserved. 22 FRBO VR property averages 22.2 weeks available 16.8 weeks rented $688 average weekly rental rate $577 annual marketing spend 5% marketing spend / income 29% use PM or realtor marketing

HomeAway properties skew toward year-round availability and higher weekly rates (UK example) Age Employment status Household income 18-24 years 1% Employed full-time 22% Less than 30,000 13% 25-34 years 5% Self-employed 27% 30,000-45,999 7% 35-44 years 10% Employed part-time 6% 46,000-60,999 6% 45-54 years 28% Homemaker 3% 61,000-90,999 5% 55-64 years 32% Retired 26% 91,000-121,999 4% 65 years or older 18% Prefer not to answer 15% 122,000 or more 7% Prefer not to answer 7% Prefer not to answer 57% Average 54 years Average 62K Average Weekly Rate Weeks Available Weeks Rented 0-500 43% 1-4 weeks 3% 1-4 weeks 12% 501-1,000 36% 5-12 weeks 9% 5-12 weeks 36% 1,001-1,500 13% 13-26 weeks 22% 13-26 weeks 31% 1,501-2,000 5% 27-52 weeks 66% 27-52 weeks 17% 2,001-2,500 1% Average 36 Average 15 2,500+ 3% Average 758 Source: Tracking survey of HAUK owners, Q4 2014 HomeAway Confidential 2014 HomeAway. All rights reserved.

Property managers appeal to owners for a wide variety of distinct reasons Source: PhoCusWright s European Vacation Rental Marketplace, 2011. Q. Why do you not use a VRMC or real estate agency to represent and rent your property? Q. Which of the following, if any, best describes why you use a VRMC?

Self-management appeals to those who want to control things and minimize fees Source: PhoCusWright s European Vacation Rental Marketplace, 2011. Q. Why do you not use a VRMC or real estate agency to represent and rent your property? Q. Which of the following, if any, best describes why you use a VRMC?

Homeowners are generally satisfied with their choice of self-management or hiring a professional Homeowner Satisfaction With Self-Management Results Homeowner Satisfaction With VRMC Results Source: PhoCusWright s European Vacation Rental Marketplace, 2011. Q. In terms of marketing and bookings, how satisfied are you with your results to date?

Many owners do not use the internet to market their properties Sources used by VR owners to find guests Online marketing Offline marketing World of mouth / referrals Property manager or realtor 55.8% 57.6% 58.8% Online sources used Paid vacation rental Free VR websites My own website Chamber of Commerce/ Other websites 9.9% 12.0% 18.3% 16.9% Offline sources used 21.1% 17.5% 12.9% 14.6% 10.0% Signs (e.g., on property) Direct mail to prior guests 29.5% Print media Brochures, flyers, or rack Source: Radius Global Market Research 2011 Chamber of Commerce/ HomeAway Confidential 2014 HomeAway. All rights reserved. 27 30.3%

World-class marketplaces are driving growth in vacation rentals Source: earnings releases and public statements, Q3 2014; Fortune 10/24/2014; Yahoo Finance 1/8/2015 HomeAway Confidential 2014 HomeAway. All rights reserved. Global listings (Q3 2014) 1.0M 0.8M 0.6M Estimated bookings (2013) $12B $4B $1B Market capitalization (January 8, 2015) $3B $13B $10B

2015 shaping up to be a watershed year for VR integrated marketing 2014 campaigns 2014 campaigns HomeAway will spend $100 billion on global marketing in 2015. - Brian Sharples, VRMA, 10/2014 Airbnb has launched a global advertising campaign with an impressively detailed piece of creative. - Marketing Magazine, 11/25/2014

Marketplaces are converting rapidly to online booking Online share of EU vacation rental bookings 100% 80% 60% US VR in 2014 = 31% EU hotels in 2013 = 31% Online booking adoption Percentage of Series eligible listings 1 Vast majority online bookable by EOY 2016 100% 40% 20% 14% 19% 21% 23% 24% 38% 0% 2008 2009 2010 2011 2012 HomeAway, Inc. Airbnb Source: PhoCusWright s European Vacation Rental Marketplace, 2011 PhoCus Wright s U.S. Vacation Rentals 2009-2014 PhoCusWright s Europen Online Travel Overview Tenth Edition, 2014 HomeAway Confidential 2014 HomeAway. All rights reserved. Source: HomeAway Q3 2014 earnings call; Airbnb website

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