High finance for HomeAway says a lot about travelers

HomeAwayAs the travel industry claws its way back from the depths of the 2008 financial crisis and subsequent consumer credit hangover, bright spots are already beginning to emerge. And unsurprisingly, it’s the non-traditional sort that seems to be leading the charge. After all, stung by layoffs, pay cuts and other personal austerity measures, we’ve had to find ways to spend less while still traveling. So, it’s no surprise that HomeAway got popular … and that investors are rewarding it.

What does all your HomeAway use mean?

Well, for starters, it translates to $216 million raised in one day. HomeAway went public yesterday, and its shares shot up 49 percent to just over $40 each. Now, the vacation rental company is worth $3.2 billion. Trading at 19 times 2010 revenues, HomeAway’s valuation is more generous than that of Priceline (8.1X 2010 revenue) and Expedia (2.3X 2010 revenue).

So, what’s all this financial stuff have to do with us, the traveling public? To me, it signals behavior. For HomeAway to be valued so richly, investors must see a lot of potential. Look for more people to look at the vacation rental alternative to hotel rooms and other traditional lodging options.