This week, Hawaii’s largest, fastest-growing and now-controversial vacation rental management company, Vacasa, laid off 17% of its 7,600 US employees, among other things, a sign of weakness for the vacation rental industry. vacation rentals in Hawaii. It’s not clear if that will be enough to fix the company’s deep problems. Not only that, but the industry has been hit by declining demand and downward pressure on prices after rates rose too much, too fast, post-Covid.
CEO Rob Greyber said: Vacasa has more work to do. We need to reduce our costs and continue to focus on becoming a profitable company.
Vacasa was not long ago the darling of the vacation rental industry. It seemed that nothing could stop them until very recently. Sales growth at the end of 2021 was a staggering 81% year-over-year.
1,172 vacation rentals in Hawaii on Vacasa, for now.
Vacasa is unique in its full-service approach. It manages, maintains and markets 1,172 vacation rentals in Hawaii and others in the US. The company went public in 2021, after which it disappointed investors with missed financial targets and mounting problems with its operations.
Layoffs began last fall and warned of weakening sales and unexpectedly high costs. CEO Rob Greyber also warned that many other issues would take time to get under control.
As a result of this and pressure from the entire vacation industry, among other things, Vacasa’s stock had taken a beating, 82% less than when it went public. The company has also lost most of its value, from $4 billion to $760 million.
Greyber said: “I am optimistic about Vacasa’s potential.” BOH: We hear the words but we no longer hear the music.
BOH’s take on Vacasa Hawaii vacation rentals.
Even before this, there was great dissatisfaction, especially among homeowners, and controversy over how Vacasa handled their affairs. Notably, in Yelp reviews, Vacasa has a 2.5/5 rating. Their reviews tend to be either very positive or very negative.
The situation at Vacasa may now result in an opportunity for local and smaller vacation rental managers, who were under severe pressure from Vacasa’s size, superior technology and financial dominance prior to this.
When we last wrote about Vacasa, some of the comments included:
“We rented a property from Vacasa…and it was in bad shape when we arrived. We did not stay in the house, and we have not been given a reasonable refund. I’m not sure we’ll ever use them again.”
“It is not surprising that Vacasa’s shares plummeted. I have used them 2x. Needless to say, I was very disappointed when they changed the weekly rentals to daily rental rates that were almost double what they had been before. So I basically paid the same amount for 4 days that I used to pay for 7. Especially since I found numerous cleaning flaws. Kitchen stove vent/fan covered in bugs/grease that could get into the pot while cooking. Just 1 example. I clean for a living, so I’m very detailed on specific things that really matter. In fact, I received a cleaning refund a year ago due to the “terrible cleaning” of your equipment.”
It’s worth noting that there’s a Facebook page for Vaasa fraud victims for those interested. The most recent comment on that page reads: “Vacasa is looking to sell and has already been turned down by at least one company, an international vacation rental company.”
Vacasa is similar to, but different from, Airbnb.
Airbnb continues to be the standard in Hawaii vacation rentals. Most vacation rental managers, as well as individual owners, list their units there. It’s the place visitors go to buy Hawaii vacation rentals. Vacasa, on the other hand, is a management company, unlike Airbnb. With Airbnb rentals, those functions, including customer service, cleaning, and repairs, are left to others.
Vacasa charges up to 35% of the total cost of a rental for their combined listing and administration work. The concept has worked well, at least in theory, allowing remote owners to have a hands-free vacation rental operation while thousands of miles away.
What isn’t necessarily apparent to renters is that many of Airbnb’s Hawaii vacation rentals are managed by Vacasa. Vacasa may be the largest property manager for Airbnb rentals.
Vacasa spends heavily on advertising and technology to make sure its rentals are seen. To achieve this, they offer their rentals on up to 100 different booking websites, including Airbnb, in addition to their own.