A Vacation Internet Business Opportunity

In 2004 I had the opportunity to represent the seller of a “Vacation Rental” Internet Business.  What I learned then, still applies today.

“Vacation Rentals” – Average Monthly Searches: 2,772,727; Vicissitude Ratio: 15.88

The 2004 seller was a web designer in the late nineties.  Business was good; and he decided to buy a cabin as a getaway.  Seeing as he only used the cabin a few weeks a year he decided to build a website and rent it for the off weekends.  It turned out the site was so successful that he ended up booking the cabin at more than 90% occupancy.  (At the time hotel occupancy rates were just above 80%; meaning he was beating the industry average by over 10%.)  What was even more unusual is that occupancy rates for “single units” (a single cabin) were far below the 80% rate.  The problem needing a solution?  An economical means of single unit owners reaching seekers of single, or a small number of units, vacation rentals.

The large reservation systems can not, and do not, cater to single unit, or small number of units, hoteliers.

Seeing as the owner above rented his cabin, and now did not have a getaway, he decided to buy another cabin for his needs.  You guessed it.  That one rented out as well!  The owner kept buying cabins; also a 10 unit lodge with restaurant, and a lake home.  After six years of doing this he had net equity of over $1M on his properties.  So he figured, if he could rent out his properties he could do the same for other single unit vacation rental owners.  He started listing other owner’s cabins for a 20% booking fee.

Not only did he have $1M net equity in his own properties, but he was not making $600K net per year from his “vacation rentals” website.  The Asking Price for his “real estate” and “website” Internet Business Opportunity exceeded $2M.

Why do I also like this vacation rental business for sale?  It is “geo targeted”, meaning the easy path to grow the site is to add more geographic pages.   For example, a look at “longtail” keywords finds that people search for “vacation rentals ?????”; where ???? is a specific location.  (e.g., Niagara Falls Vacation Rentals, Key West Vacation Rentals, Aspen Vacation Rentals, etc.)

The owner’s Asking Price is overstated.  However, expect that the price will come down.  Publishing sites are currently selling for a multiple between 2.4 and 3.2 of cash flow.  At a 5.0 multiple for the Asking Price, given also the willingness of the owner to carry a note, you might expect to make an offer at 2.8.   Always remember, you must conduct your own due diligence to verify the seller numbers.   OR  You might want to consider a Buyer Service from Internet Business Guide.

Internet Business Opportunity – Vacation Rentals

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Internet Business Guide Listing #8023

This vacation rental business started as a hobby based on an unmet need observed in the marketplace. It has grown to be cash flow positive based on a solid and proven business model, as well as increasing website traffic and awareness.

Th Internet Business Opportunity is now primed for someone who is capable of devoting the necessary time to take it to the next level. (Owner has other obligations and this business is getting too big to manage on the side.)

The business is a great opportunity for someone with internet marketing knowledge (PPC, SEO) and anyone from the travel industry who realizes the incredible potential in the short term apartment and vacation rental market. In the last year this vacation rental site made great progress regarding SEO.  The website is scoring well in targeted keyword searches on the major search engines. This is organic, not paid!

The platform is highly scalable and searchable, delivering first page results for some very popular search terms. The business has been cash flow positive almost from the get go and the owner believes the key to further success is all about driving more traffic to increase the top of the funnel numbers.

The conversion ratios are quite good so if you think you can drive more traffic to it you will be successful. Since the business and it has proven that it can generate good cash flow owner is happy to offer the new owner financing.

The numbers are roughly, $30k cash flow (with VERY low expenses, just web hosting, payment fees, etc.) based on current site traffic of about 80,000 visitors a year.

This Internet Business Opportunity sale includes the website and associated URL – All brand assets – The network of ~1,400 existing short term rentals – The business model and operating system -All financial statements -As much consulting by the current owner to transition the business over to you as needed (within reason).