You can’t accuse HomeAway of lacking ambition. The Austin-based vacation rental company serves up dozens of travel booking Web sites around the world. “Our ambition is to make every vacation rental in the world available to every traveler in the world through our online marketplace,” the company writes in its S1 filing.

Ummm… that goal might be a little lofty, but here are three more realistic reasons to consider buying stock in the HomeAway IPO:

1) Lots of renters = lots of cash. HomeAway’s collection of 31 vacation rental sites bring in more than 9.5 million unique visitors every month. That was good for 220 million visits last year, and those Web surfers were able to sift through more than half a million possible vacation rentals. Apparently, a lot of those visitors convert into clients with HomeAway booking more than $168 million in sales last year. That was good for nearly $17 million in profit. Revenue spiked 31.9 percent over 2009 to $152.89 million. It’s nice to see a tech company that’s actually profitable when it files for an IPO, and that’s due in part to HomeAway’s subscription-based model.

2) Subscriptions ‘R’ Us. HomeAway makes the vast bulk of its cash (more than 91 percent) from renewal based subscription fees. Most property managers pay $329 per listing per year to be featured on HomeAway.com, HolidayRentals (UK) and HomeAway FeWo-direkt (Germany). It’s a business model that doesn’t rely on ad dollars but rather “highly predictable and profitable” subscription fees. Last year, more than 75 percent of HomeAway’s clients renewed their existing listings. That’s a good sign that HomeAway makes sense for property managers and travelers alike. And the renewal fees are easy money in the bank. They generated $51.5 million in free cash flow (per tnooz) last year.

3) If you can’t beat ‘em, gobble ‘em up. HomeAway’s rapid growth is thanks in no small part to the company’s aggressive acquisitions. Since launching in 2005, HomeAway has acquired 16 Web sites, the most recent of which came earlier this month when HomeAway announced it bought Australian vacation rental site Realholidays.com.au. RealHoliday’s will be absorbed by HomeAway.com.au bringing the total number of vacation rental listings on the Australian site to more than 125,000 (per TechCrunch).

All told, HomeAway lists more than nearly 525,000 vacation rentals in 120 countries. The company operates 31 Web sites in 11 languages including:

  • HomeAway.com (US)
  • VRBO.com (US)
  • VacationRentals.com (US)
  • HomeAway.co.uk (UK)
  • OwnersDirect.co.uk (UK)
  • HomeAway.de (Germany)
  • Abritel.fr (France)
  • Homelidays.com (France)
  • HomeAway.es (Spain)
  • AlugueTemporada.com.br (Brazil)
  • BedandBreakfast.com (Global)

Perhaps what I like best about HomeAway is its democratization of pricing for vacation rentals. By creating a broad and easily accessible marketplace for homes, the site is fostering more competition among property managers. That’s good for our pocketbooks as travelers – and it’s definitely good for HomeAway’s bottom line.

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