Today is the last day for the Washington Tourism Office.

Some states have cut their tourism marketing budgets in recent years, but Washington State is taking things a step further—it’s eliminating its tourism agency altogether, becoming the first state to do so.

Closure of the office is expected to save about $1.8 million annually. But with tourism spending reaching $15.2 billion in 2010, and $1 billion generated in state and local tax revenue—based on the preliminary 2010 Travel Impacts Report/Washington State Department of Commerce and Washington State Tourism—the tourism budget, which even in previous years when it had reached up to $7 million, seems like a drop in the bucket considering the favorable return.

Determining just how much of the revenues can be pegged to the work of the tourism bureau is difficult however, and states are in a money crunch looking for any opportunity to cut funding from one program to save another in the short run.

But that doesn’t mean there won’t be any future tourism marketing for Washington State. The possible closure of the tourism bureau had been on the radar for at least a year, and a private group of tourism industry stakeholders formed the Washington Tourism Alliance in March, with the goal of sustaining statewide destination marketing campaigns and communications.

In just two months, the 17 founding partners, 16 associate partners and more than 120 members have raised more than $300,000. Expect the new group to also affiliate with founding member Seattle Convention and Visitors Bureau and its advertising campaign “Why Tourism Matters” to help promote the value of tourism to the state’s citizens and politicans.

Photo: Washington Tourism Alliance

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Austin, Texas–based HomeAway Inc., raised $216 million in its public offering by selling eight million shares priced at $27 each. HomeAway shares will start trading on the NASDAQ stock exchange under the ‘AWAY’ symbol on Wednesday, June 29, 2011.

Homeaway

The $27 share price is at the upper-end of the $24 to $27 range, and puts the company’s valuation in excess of $2 billion.

The IPO mania and analyst estimates point to the price climbing quite a bit, at least in the short-term.

HomeAway was created through the consolidation of five vacation rental sites in Europe and the United States in June 2006, and began with a base of 60,000 listings on HomeAway.com.

HomeAway is now the biggest company in the $85 billion vacation rental industry, with 31 websites in 11 languages that attract 9.5 million unique monthly visitors and offer listings for properties in more than 145 countries.  It has 842 employees, of whom 305 are located outside the United States.

HomeAway has grown to 560,000 paid listings with a 2010 renewal rate of 75.9 percent. The base fee is $300 for a yearly listing. These paid listings accounted for 91.1 percent of the company’s $167.9 million revenue in 2010.

HomeAway also earns revenues from Internet display-based advertising on its websites, property management software licenses and commissions for online reservations.

The two main flagship sites for the vacation rental market are HomeAway.com and VRBO.com. VRBO was acquired by HomeAway in November 2006 and is currently getting more than 19 million traveler visits each year. Together, these two sites account for 429,246 property listings—not to mention 632 barn rentals, 555 castles, 9 cabooses and even a shell house.

HomeAway also has the bed and breakfast listings market cornered via BedandBreakfast.com, which it acquired in 2010. All told, HomeAway has made 17 acquisitions financed by an astounding $404.3 million in equity investment in the last five years and $110.5 million in bank debt. See the full listing of all HomeAway websites and brands on its IPO prospectus (page 98).

The eight million shares put out in the market amount to only 10 percent of the outstanding common stock, so this leaves room for dilution for current shareholders. Vacation rentals (used by one in 10 U.S. travelers) are vastly overshadowed by the hotel industry, and there are seasonal drops in paid-listing renewals. There’s also a very real possibility of harsher regulation of short-term rentals by popular destinations.

HomeAway is also slightly behind on the technological curve, since travelers who want to book a listed property need to contact the property owner or manager. It does provide a free ReservationManager tool which facilitates online transactions between the property owner/manager and the traveler.

But that’s still not as convenient or quick as other sites, such as Airbnb, which offer direct bookings online. HomeAway’s social network presence and integration of social features on its sites has had to be bolstered via the recent acquisition last month of social vacation rental site Second Porch Inc.

Once the IPO-fueled momentum is gone, and if this growth by acquisition strategy cannot be pursued further, it will be interesting to see whether AWAY can continue to soar or will fall below its current opening share price of $27.

Photo – HomeAway

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In a struggling economy, what would encourage the European Union (EU) to throw away a certain $3.8 billion order and risk destroying a $388 billion industry?

Starting Jan. 1, 2012, any domestic or international flight landing in or departing from an EU airport will come under the hammer of the EU Emissions Trading System (ETS).

This means that carriers whose planes are flying in and out will have to buy the right to pollute the EU skies. To be specific, 85 percent is free, but the airline will have to bid in an auction to buy the rights for the remaining 15 percent of their own emissions.

The system is described in detail here, but the short version is that it will add $1.9 billion in costs to the global airline industry in 2012, which will allow planes to emit 213 million tons of carbon dioxide. The costs will rise to $9.89 billion by 2020.

The matter has been on a slow boil for the past year or so, but things came to a head at the recently concluded Paris Air Show, where Hong Kong Airlines was expected to formally announce a $3.8 billion order for 10 Airbus A380 planes. The order was put on hold by Beijing.

Airbus chief Tom Enders had, in fact, explicitly warned the EU about this in a letter sent on May 24, 2011. Here’s how it has played out since then:

Tom Enders, Airbus chief executive: “Particularly during these times of austerity, it is madness to risk retaliation against a €275 billion industry which supports a massive 4.5 million jobs.”

Wei Zhenzhong, head of the China Air Transport Association: “I believe we have to take legal action.”

FAA Reauthorization Bill text in the U.S. House of Representatives: “Officials [of] the United States Government, and particularly the Secretary of Transportation and the Administrator of the Federal Aviation Administration, should use all political, diplomatic and legal tools at the disposal of the United States to ensure that the European Union’s emissions trading scheme is not applied to aircraft registered by the United States.”

Giovanni Bisignani, IATA director general: “The last thing that we want to see is a trade war.”

Connie Hedegaard, EU climate commissioner, in response to an article in Financial Times: “Glad that FT agrees that Europe needs to stand up to threats. Am sure that European companies get why this principle is worth fighting for.”

Isaac Valero Ladron, spokesman for EU climate action commissioner Connie Hedegaard: “Whatever the Chinese or the Americans are saying, there is no Plan B–we don’t intend to back down.”

The Americans and Chinese don’t intend to back down either. China has already hit the EU with the $3.8 billion Airbus order. The Air Transport Association of America (ATA) is fighting it in the European Courts.

The next hearing is on July 5, 2011 in the European Court of Justice in Luxembourg. Depending on what happens there, the United States and the ATA will decide what to do next. But the court proceedings could take months and the clock is ticking.

One possible solution being pursued by both the United States and China is that they could be given special exemptions, based on a loophole that allows countries to be exempt from ETS if they have their own domestic greenhouse gas reduction plan.

But if the discussions over the exemption don’t pan out, and the courts can’t decide by the end of the year, then air travel to and from Europe is suddenly going to get more expensive starting 2012, and there’s going to be an aviation trade war.

Photo – Karen Eliot

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Feature: The 49th Paris Air Show at Le Bourget quickly turned into an Airbus show as the European aircraft manufacturer shattered records to rack up $72.2 billion worth of business for a total of 730 aircraft sales. Boeing could claim orders and commitments for only 142 airplanes worth $22 billion at the air show.

Airbus at Paris Air Show

The star of Airbus’ record haul was the A320neo, which earned 667 commitments worth some $60.9 billion. The 150-seater A320neo (new engine option) was launched last year and offers 15 percent more fuel savings as compared to other single-aisle planes.

With even AMR now talking to Airbus for 100 new single-aisle planes, Boeing has to think fast about whether to re-engineer its 737 or go for broke with a new jet, which likely can’t be made available until at least 2020.

The only bright spot for Boeing was that it got to show off its 787 Dreamliner and 747-8 Freighter.

The Paris air show also witnessed a breakthrough of sorts in jet biofuel with successful trans-Atlantic biofuel flights, an agreement between a core group of airlines to buy jet biofuel and KLM’s announcement of Amsterdam-Paris commercial biofuel flights.

Airbus with new order record at Paris Air Show 2011 – Airbus.com
AMR said to be in talks for 100 Airbus jets in shift from Boeing - Businessweek
Fuel savings spur orders at air show - WSJ
ATA airlines sign negotiation letters of intent for biomass-derived jet fuel – Airlines.org
Hypersonic dreams fly at Paris airshow - Wired.com

Here’s the rest of the week’s interesting news:

HITEC: Capture guests at the seven travel planning points – HNN
HITEC: Randi Zuckerberg, Facebook: ”Traveling is one of the most social purchases someone can make.” – LHOnline

Sabre loses bid to stop American Airlines from seeking injunction – Bloomberg
Titus Johnson, Air Berlin: Legal scrap between GDSs and airlines “will help” – ABTN
American Airlines and Air Berlin expand codeshare agreement – AA.com

Virgin America names plane after Twitter hashtag - Gadling (meet #nerdbird on Facebook)
Loopt’s first u-Deal ($35 Virgin America travel voucher) sold out in 48 minutes – Loopt

Ideeli launches flash sale travel channel powered by Voyage Privé - ideeli.com
Spire launches with members-only rates for hotels – Spire.com

Traxo launches “Traxo Travel Score” - Traxo.com
Foursquare tops 10 million users (and they’re happy, too) - PCMag

A halt to the hotel humdrums - Portfolio.com
A few tips from the founder of Hotels.com - Business Insider

InterContinental launches 7 new apps to drive same-day bookings - AllThingsD
Survey reveals mobile a top priority for lodging owners - TripAdvisor

Expedia nears TripAdvisor spin-off filing - WSJ
What drove Expedia’s facebook fans past 1 million? - AllFacebook

Photo – Airbus

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