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Vacation rental-management company
plans to use the roughly $340 million it raised in its recent public listing to add new homes and features to its platform.
Portland, Ore.-based Vacasa went public this month through a merger with TPG Pace Solutions Corp., a special-purpose acquisition company. Vacasa offers to handle all aspects of property management for homeowners, including services such as cleaning and maintenance. Rental platforms such as
Expedia Group Inc.’s
Vrbo usually leave those duties to homeowners.
Vacasa plans to use the capital from its SPAC deal to increase the number of rental properties available on its platform, said Chief Financial Officer
who joined earlier this year from
a Denver-based home maintenance and repair company. Vacasa, which was founded in 2009, currently lists roughly 35,000 homes for rent, an increase of about 70% from the end of 2020. Adding new properties is a key challenge for companies across the vacation-rental industry.
During the third quarter, gross bookings—the total value of reservations, including rent, fees and taxes—were $776 million, about double compared with a year earlier. By comparison, Airbnb, which went public in December 2020, reported $11.9 billion in gross bookings in the same period.
Vacasa is not currently profitable on a full-year, adjusted earnings before interest, taxes, depreciation and amortization basis, but intends to get there by 2023.
Vacasa charges property owners a management fee of 25% to 30% per nightly booking, while Airbnb and Vrbo charge 3% and 8% a booking, respectively.
By the end of 2022, Vacasa expects to list around 48,000 homes in the U.S., according to a recent investor presentation. Most of the properties on the company’s platform are in the U.S., where it operates in 34 states, as well as in Canada, Mexico, Belize and Costa Rica.
“Turn the keys over to us, tell us which nights you want to [rent] the property, and we will handle everything else and send you a check,” Ms. Cohen said, describing Vacasa’s pitch to homeowners. She declined to provide additional details on specific markets where Vacasa aims to expand.
The company plans to attract more individual homeowners by hiring more salespeople, and expand to new markets by acquiring new property managers, she said. Vacasa currently has about 8,000 employees, including seasonal and part-time workers.
The company has benefited from a recent boom in vacation rentals, driven in part by people working remotely and renting homes for a change of scenery, according to
a senior research analyst at investment firm Northland Securities Inc. Owners of second homes are also renting out their homes more often, looking for rental income, he said.
Vacasa not only competes with larger vacation-rental companies. It also needs them to market its listings. About one-third of the company’s gross bookings over the past year came from properties listed on its site. The rest hauls from listings that Vacasa posts on Airbnb and other platforms, according to Ms. Cohen.
“We provide a lot of inventory, especially in our key markets, to our partners,” she said. Vacasa has exclusive management contracts on its properties, meaning owners don’t serve as hosts on other rental platforms at the same time.
Vacasa also plans to use its fresh capital to add new features on its platform. The company recently launched an app that allows homeowners to track information such as rental income and guest bookings.
Vacasa is rolling out smart-home features across its properties, including smart locks, which allow renters to open the front door through the Vacasa app, and decibel monitors, which will alert the company to disruptive noise levels from parties.
Write to Kristin Broughton at [email protected]
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