It could be argued that Americans have long believed “we are what we own” — the bigger, the better; the more, the merrier.

Some folks shell out a lot of money to have three or four cars sitting in the driveway, or vacation homes on both coasts. Often times, the cars sit idle and the homes empty for a good portion of the time.

However, a monumental economic shift is underway and changing the face of consumerism as we know it. We can now reap the benefits of consumption without the costs of ownership. In fact, those unused or rarely used items just taking up space in your life can begin to fill up your wallet. 

This relatively new phenomenon is called consumer-to-consumer sharing. Owners rent out something they are not using — such as a car, a house, tools or a bicycle — using online peer-to-peer services. The go-between company typically has an eBay- or Yelp-style rating system so people on both sides of the transaction can trust each other. 

The concept has taken on a life of its own. Forbes estimates that revenue flowing through the “share economy” directly into people’s bank accounts will surpass $3.5 billion this year, an annual growth rate of 25%. 

Over the past four years, at least 100 companies have sprouted up to offer people an extra income stream from dozens of types of assets. For example, RelayRides and Getaround let you rent cars from their individual owners; Boatbound offers boat rentals, Desktime office space, and ParkAtMyHouse parking spaces. 

You get the picture. Almost everything is up for sharing.

My favorite investment in this space is HomeAway (Nasdaq: AWAY) — an online marketplace where anyone can rent his or her home for short stays. 

Advertised as “cheaper than renting a hotel room,” HomeAway has 890,000 paid listings in 190 countries around the world. The company has a market cap of $3.5 billion and generated $346 million in revenue in 2013, a 24% rise from a year earlier. HomeAway is also debt-free with close to $400 million in cash and investments.

And those numbers look poised to go up. More people are visiting HomeAway.com — 15% more than last year to be exact — and spending 13% more per listing. The company has also been aggressively expanding its reach over the past couple of years.

Founded in 2005, HomeAway — also the parent company of VacationRentals.com — has expanded globally by acquiring 17 rival sites. In 2012, it gobbled up Australia-based Stayz Group for $198 million and New Zealand-based vacation rental site Bookabach to expand in the Asia-Pacific market. Last July, HomeAway acquired Asian vacation rental startup Travelmob and invested in Chinese vacation rental player Tujia.

Its recent acquisition of Glad to Have You, creator of the vacation rental industry’s leading mobile guest management app, makes a customer’s visit to the site even more hospitable. Once guests check into a home, the app allows them to access local restaurant recommendations and listings for nearby activities as well as policies and procedures in place during their stay.

People are always looking for bargains when it comes to vacations or homes. The fact that HomeAway is debt free, has a substantial chunk of cash and investments on the books, has seen increasing interest from consumers, and is expanding rapidly, should mean more positive ground for its shares in 2014. 

That may not be the case for the hotel industry as it fights to compete in the new share economy.

Risks to Consider: You may be wondering about Airbnb — valued at $10 billion based on raised funding — one of the best-known companies in the “share economy.” It focuses exclusively on renting primary homes, rooms or even castles. And the business is growing fast. Airbnb’s revenue more than doubled last year to $250 million with 600,000 paid listings in its inventory. Airbnb is not yet publicly traded, but an Airbnb IPO could divert investor interest from HomeAway. 

Action to Take –> Regardless of what Airbnb does, HomeAway is a financially strong company with a business model and product that continues to attract customers. After reaching a 52-week high of $48.90 back in February, the price has come down to $34, which makes a nice entry point for the stock.

This article was originally published at InvestingAnswers.com: 
Shocking Prediction: This Company Could Kill The Hotel Industry

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