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U.S. vacation-rental marketplace, HomeAway, Inc. (AWAY - Snapshot Report), has expanded its distribution partnership with Interhome AG to add new vacation rental properties to its network through its pay-per-booking product.

Based in Switzerland, Interhome is one of Europe’s premier providers of holiday homes and apartments worldwide. The company has 15 regional subsidiaries and its operations mainly focus on France, Italy, Spain and Switzerland.

Per the agreement, the new Interhome properties will appear initially on HomeAway’s U.S. sites — HomeAway.com and VRBO.com — and European sites — FeWo-direkt and HomeAway.co.uk. The properties will be made available on additional sites around the world, like Abritel.fr in France, as HomeAway rolls out its pay-per-booking functionality.

HomeAway’s pay-per-booking product, introduced in mid-October, allows property owners and managers to list their property on HomeAway.com without paying any upfront fees. They only have to pay 10% of the booking amount once the property is booked.

The deal is said to be the largest distribution partnership enabled by HomeAway’s pay-per-booking product. Management expects the new pay-per-booking platform to expand its online marketplace and accelerate listings growth in the near term.

We believe the deal will help HomeAway to better position itself in the competitive vacation-rental industry. The alliance will boost the company’s already large vacation rental portfolio and further strengthen its presence in Europe, thereby increasing its overall market share.

HomeAway has been trying to improve its vacation rental portfolio by entering into few important alliances. Last month, the company signed an agreement with Expedia.com (EXPE - Analyst Report) to expand online travel accommodation options by featuring HomeAway vacation rental properties on Expedia.

Moreover, HomeAway is investing in international markets because of the higher growth potential in these markets. Earlier in July, the company acquired Asian vacation rental start-up — Travelmob — and made an investment in China vacation rental player — Tujia.

We believe these strategic partnerships and acquisitions will help HomeAway to grow in the future.

HomeAway, the world's leading online travel leader, reported a strong third quarter, driven by growth in the overall online travel booking industry. The company reported revenues of $90.1 million, up 4.0% sequentially, 23.3% from the year-ago period and above management’s expected range of $88.6 million–$89.6 million driven by strong performance in both listing and other revenues.

Currently, HomeAway has a Zacks Rank #3 (Hold). Other stocks that look attractive at the moment are Priceline.com (PCLN - Analyst Report), SeaWorld Entertainment, Inc. (SEAS - Snapshot Report) and Regal Entertainment Group (RGC). All these stocks carry a Zacks Rank #2 (Buy).

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