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Sometimes you can’t take a break, which seems to be the case at Hawaii’s long-troubled vacation rental giant Vacasa. After the recent news that Vacasa abruptly laid off 17% of its workforce, they’ve just encountered terrible headwinds, including falling revenue, mounting losses, losing key people, stock losses of 88% and more.
The larger vacation rental industry remains under pressure, having grown too quickly and often without sound business practices. This stock market darling has fallen from a recent high of nearly $10 a share to today’s low of $1.13 in after-hours trading, a steep 88% drop. It seems like just yesterday they announced 81% sales growth before today’s reality became clear.
Vacasa quickly grew into Hawaii’s largest vacation rental company.
Vacasa’s website states that it still manages, maintains and markets 1,164 Hawaii vacation rentals. But that doesn’t describe the problems you reported in comments, which are widespread. The problems became apparent in late 2022, when the company warned of excessive costs, declining sales, and management problems. Last month, Vasasa’s newly appointed chief commercial officer left the company suddenly, just four months after taking the position.
BOH’s updated version of vacation rentals in Vacasa Hawaii.
There are obvious concerns for homeowners and vacation rental renters in Vacasa. The company’s future seems uncertain, even by its own carefully crafted words.
Ahead of today’s earnings report, there was dissatisfaction among homeowners and renters as controversy surrounding Vacasa management mounted. On Yelp reviews, Vacasa now has a rating of just 2.5/5, with reviews ranging wildly from positive to negative. Google ratings for Vacasa Hawaii came in at 2.1.
Vacasa’s situation presents an opportunity for other vacation rental companies to improve their own dwindling inventory. Previously, the same people had experienced extraordinary challenges due to Vacasa’s money, influence, and technology.
One person recently commented on BOH, “We rented a property in Vacasa… and it was in poor condition when we arrived. We didn’t stay in the house and they didn’t give us a reasonable refund. I’m not sure we’ll ever use them again.”
Another said: “No wonder Vacasa stock plummeted. I have used them 2x. Needless to say I was very disappointed when they converted the weekly rental rates to daily rental rates which were almost double what they were before. So I paid for 4 days basically the same amount I paid for 7 before. Especially since I noticed numerous cleaning deficiencies. Kitchen stove fan/fan caked with bugs/grease that could fall into your pot while cooking. Just 1 example. I clean for a living so I’m very detail oriented on certain things that really matter. I actually received a cleaning refund for ‘terrible cleaning’ by their team a year ago.”
Airbnb is the gold standard for vacation rentals in Hawaii.
Most vacation rental managers and individual owners list their units on Airbnb, including Vacasa. It is the premier destination for purchasing vacation rentals in Hawaii. Airbnb, unlike Vacasa, isn’t a management company, so things like customer service, cleaning, and repairs are handled by others.
Vacasa charges up to 35% of the total rental cost of its services. The concept worked well because it gave remote property owners the ability to have hands-free operation, even if it was expensive.
Something went wrong at Vacasa.
In the latest company report today, Vacasa said revenue would contract this year. This comes amid a cooling trend for Hawaii vacation rentals and Vacasa previously not having been able to keep pace with the company’s growth. Then, just two months ago, the company cut 1.3,000 jobs, or 17% of its workforce.
Vacasa also said, “We face challenges that are fixable but not yet fixed,” without giving further details. The company added that it does not yet know how the “downsizing of our sales force and adjustments to sales strategy will impact our growth under our own steam.”
Vacasa confirmed that they are not adding as many new properties as before and that current homeowners are heading to greener pastures. “We started to see that “the number of houses leaving our platform has increased”.
The company today reported a loss of $3 billion, double its loss last year. They also think sales will fall by maybe 10% this year. But at the same time, they continued to warn investors that “significant uncertainty‘ in their business and the industry.
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