April 5, 2019
Game of Homes and the Seven (Vacation Rental) Kingdoms
It has been nearly two years since we last visited the Seven Kingdoms in our own Game of Homes. With the final season of everyone’s favorite series now upon us, the time seemed right for a revisit, and a reassessment. What were we right about? Where did we miss the mark? And more importantly, when all is said and done, will the White Walkers or the Living come out victorious?
A House by House Assessment
Baratheon/Lannister and HomeAway/Expedia
We initially labelled HomeAway as House Baratheon, and Expedia as House Lannister. Given their epic tie up, this pairing made a great deal of sense at the time. And since?
Just as the Baratheon name fades into the past, we are seeing signs that the entire HomeAway brand may go the way of the Baratheon line. Even as vacation rentals and the arm that was once a standalone entity perform well for House Expedia, we are now seeing the House promote “VRBO” as the brand of choice for their alternative accommodations.
Likewise, Expedia earned its House Lannister tag from more than its acquisition of HomeAway. With deep pockets and a readiness to dip into them, it was clear this Lannister did indeed always pay its debts. Even with the departure of the patriarch, Tywin Lannister, at the hands of Tyrion in the show, and Dara Khosrowshahi to Uber in our own series, the willingness of House Expedia to spend money on promising upstarts has continued. Most recently and notably was the combined purchase of ApartmentJet and Pillow. This House clearly believes that its best days are ahead of it, and it is investing accordingly.
Stark and Vacasa
As we entered Season 7, the Lords of the North(west) were beginning to expand their horizons, just as Sansa, Arya, and other Starks tried with more or less success to do in the show. As we prepare for Season 8, Vacasa is in >15 countries, manages >10,000 properties, has raised >$200 million, and is the largest House in all of North America. It is safe to say that they are the Lords of far more than the North at this stage. Where will this ambition take them? And who might stand in the way?
Targaryen and Wyndham
With the success of House Vacasa and others, the former undisputed ruler of the Seven Kingdoms is more of a conundrum than ever. Having sold off its entire European Vacation Rental arm for more than $1 Billion, questions constantly surround the US entity and its future. Can this house survive alone? Is an alliance needed?
Just as Daenerys Targaryen is currently in pole position to retake the Seven Kingdoms even after the loss of her entire family thanks to her success in building an army from scratch through savvy alliances she brokered, there is a way forward for the formerly great House, but it requires cooperation from others.
Greyjoy and VTrips (formerly Vacation Rental Pros)
For anyone who has seen or heard him speak in the last couple of years, Steve Milo is as big a fan of “paying the iron price” as ever (i.e., funding through debt capital rather than raising equity).
One of the surprises in Season 7 was a Greyjoy striking an alliance with the Lannisters. For someone whose views on OTAs in general, and HomeAway in particular, are well documented, the thought of a closer working relationship might seem preposterous. That being said, while very tough on House HomeAway, Steve has been more complementary of House Expedia as of late.
Unlikely, yes. Impossible? Let’s watch this space.
Bravos and Airbnb
In the early seasons so much attention was paid to the Lannisters and their promise to always pay their debts that few looked far afield from the Seven Kingdoms. Entering Season 8 a broader perspective is not only warranted, but necessary. As we noted last time, “the Iron Bank will have its due.” This may have been the most spot on call of all.
With a recent $400 Million acquisition of HotelTonight, a reported $200 Million investment in Oyo, investment in a $75 Million funding round in The Wing, and the purchase of a French property management company, just to name a few recent M&A moves, Airbnb has shown everyone the bank is open, and she hungry.
The varied nature of the investments and acquisitions also shows Airbnb is looking far beyond the Seven Kingdoms of short-term rentals. The pie of the world of travel is much bigger than what short-term rentals alone provide, and this House wants a bigger piece of ALL of it.
With a reported IPO on the horizon, there is no question that ‘Air Bank of Bravos’ will have its due. The only unknown is just how big that “due” will be.
White Walkers & NIMBYs/Vested Interests
Entering Season 8, it is an open question if and how the White Walker army can be stopped. This is a fantastic lesson for all the Houses and actors in our own Game of Homes drama. Just as all the Houses are under attack from the outside, the players in short-term rentals must begin to put aside their differences and work together to defeat this existential threat.
It is also important to note how similar the TV White Walker army and our own White Walker army of NIMBYs and vested interests really are. Just like how the Night King and a couple of Lieutenants raised the Army of the Dead by infecting them, so too does a small vocal minority convince others to fight their battles for them, most of the time against their own self interest. Whether this is the hotel lobby, a few angry neighbors with too much time on their hands, or some other disgruntled party, too many bad local laws are being passed at their behest that infringe on individual property rights, and harm property values.
This Army of the Dead is as much of a threat as ever. We either work together, or we fall one by one.
Our first installment labelled Rented.com as Jon Snow. At the time Jon was not affiliated with any House, but rather was Lord Commander of the Night’s Watch, and a defender of all. We now know he is actually a product of the union of Houses Targaryen and Stark. So do we stand behind our label?
As a principle, yes. Being the union of two great houses the basic idea remains the same: we are vassals of no House, but rather are invested and committed to the greater good of the Seven Kingdoms and beyond. Also, just as Jon could not remain a passive player on the wall once it was breached, we recognize and embrace our duty to be involved in the greater war at hand. One that pits good versus evil, and short-term rentals and property rights against NIMBYs and vested interests.
And we are far from the only ones. For example Matt Curtis, like Varys, once solely served House Baratheon and then House Lannister (HomeAway, then Expedia), and is now instead working for the broader industry at the Smart City Policy Group. Quiet Man is our industry’s Samwell Tarly, quietly plugging away at the Citadel (NoiseAware) to try to find the answers to problems we all face.
There are so many more that we could mention, but simply don’t have the space.
The overall premise is simply this: we are, and must be, in this together. To succeed, we must act accordingly.
Season 8 has the potential to be the most epic to date, but it is imperative upon each and every one of us to actually make that possibility a reality.
Houses of the Seven Kingdoms, unite! Let’s win this Game of Homes together.