This week, Hawaii’s largest, fast-growing, and now controversial vacation rental management company, Vacasa, laid off 17% of its 7,600 U.S. employees in, among other things, a sign of weakness for the Hawaii vacation rental sector. It isn’t clear whether that will be enough to fix the company’s profound problems. Not only that, but the industry has been struck with waning demand and downward price pressure after rates rose too high, too fast, following 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 sector. It seemed that nothing could stop them until very recently. Sales growth as recently at the end of 2021 was a staggering 81% year over year.
1,172 Hawaii vacation rentals at Vacasa – for now.
Vacasa is unique in its full-service approach. It manages, maintains, and markets 1,172 Hawaii vacation rentals plus others across the U.S. The company went public in 2021, after which it disappointed investors with missed financial targets and increasing issues with its operations.
Last fall, they started layoffs and warned of weakening sales and unexpectedly high costs. The CEO, Rob Greyber, also warned that many other problems would take time to get in check.
As a result of this and vacation industry-wide pressure, among other things, Vacasa’s stock had taken a beating, down 82% compared to when it went public. The company has also lost most of its value, from $4B to $760M.
Greyber said “I am optimistic about Vacasa’s potential.” BOH: We hear the words but no longer hear the music.
BOH’s take on Vacasa Hawaii vacation rentals.
Even before this, there was significant dissatisfaction, especially among homeowners, and controversy about how Vacasa managed its affairs. It’s noteworthy that on Yelp reviews, Vacasa has a rating of 2.5/5. Their reviews tend to swing either very positively or very negatively.
The situation at Vacasa now may result in an opportunity for local and smaller vacation rental managers, who were under fierce pressure from Vacasa’s size, superior technology, and financial dominance before this.
When we last wrote about Vacasa, some of the comments included:
“We rented a Vacasa property… and it was in bad condition when we arrived. We didn’t stay in the house, and they have not returned us a reasonable refund. Not sure we will ever use them again.”
“Not surprising that Vacasa stock plummeted. I have used them 2x’s. Needless to say, I was very disappointed when they changed weekly rentals to daily rental rates that were almost twice the amount than 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 caked with bugs/grease that could fall into your pot while cooking. Just 1 example. I clean for a living, so am very detail oriented on specific things that really matter. I actually got a cleaning refund a year ago because of “terrible cleaning” by their team.”
It’s worth noting that there is a Vacasa Fraud victims page on Facebook for those interested. The most recent comment on that page from two days ago reads, “Vacasa is looking to sell and was already rejected by at least one company, an international vacation rental company.”
Vacasa is similar, yet different, from Airbnb.
Airbnb remains the standard in Hawaii vacation rentals. Most vacation rental managers, plus individual owners, list their units there. It is the go-to place where visitors shop for 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 its combined listing and management work. The concept has worked well, at least in theory, since it allows remotely based owners to have a hands-free vacation rental operation while they may be thousands of miles away.
What isn’t necessarily apparent to those renting is that many of Airbnb’s Hawaii vacation rentals are actually managed by Vacasa. It may be the largest property manager of Airbnb rentals.
Vacasa spends heavily on advertising and technology to ensure they get eyeballs on their rentals. To accomplish that, they offer their rentals on up to 100 different booking websites, including Airbnb, in addition to their own.
Things went wrong.
It was reported late last summer that Vacasa’s attempt to use Salesforce CRM to help manage their business “was a nightmare, leading to myriad sales inefficiencies. Vacasa hasn’t excelled in the mission-critical area of retention and satisfaction of its current properties and homeowners.
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I was concerned when I saw this story as my husband and I were transferring from a unit managed by CB Island Vacations to a unit managed by Vacasa, but decided to keep an open mind. Both units were in the same complex. I contacted Vacasa upon arrival with the issues I had with the unit. I was told the local contact was informed of my issues, have not heard from Vacasa. Admittedly, some issues cannot be addressed during our stay. I also blame the owner for these issues as the unit is not updated and has not been well-maintained. Vacasa needs to have better standards for their owners properties. Paid the same price for an inferior property that I did for a well-maintained unit with a view.
I am an owner who has been with Vacasa since they bought out the local company. The problem is not with the local group on island in Maui but rather with the mainland group. The on-island group are fantastic and try very hard to make it all work. It has been my experience with the mainland group that they really don’t care about the owners and don’t listen to us either. My impression is they feel it is out way or no way. Bad way to be since they depend upon the owners and their properties to survive and if they continue to treat us this way then I doubt there is a future for Vacasa! It is also impossible for an owner to get in touch with the mainland group too. Happy we have a great group on-island.
We have rented from Vacasa twice on Kauai, both good experiences. I prefer having someone local to call that is reachable instead of off island owner of unmanaged VRBO unit. Vacasa was particularly helpful when I left a bag of clothing and moved to another part of the island! I hope they can adjust and hold it together.
Great, renting a condo in Princeville from them for a week in October.
I really just need Vacasa to provide the correct door code as I’ll *hopefully* be coming straight from six days on the Kalalau Trail.
They can pull that off, right?
I’ll report back any issues I encounter.
Also, the rate was twice the rate for the same unit a year ago when it was managed by a different company.
Wow!
Sorry for the locals , but maybe, for a change things, have getting out of hand in Hawaii with the cost of everything. Maybe the Konomi should crash, so the locals can afford things.
If things only worked that way. Being Islands that depend upon the mainland and other places for practically Everything it wouldn’t change much and would possibly see prices raise, that is a shame. Unless, and Until, Hawaii becomes self-sufficient in practically every need nothing will ever change significantly. I’m not sure that Hawaii, with its own population, could meet the challenge. When factoring in Tourism there’s certainly no way! Hawaiians are a Captive Audience and Prices shall only Increase, including property.
Vacasa seems to have severely dropped the ball according to an abundance of comments that I have read, what will they do to recover and prove their worth with renters and owners alike? The 1,300 that have been layed off may find it difficult to find employment in similar businesses, the Court Case set to begin in February will decide the fate and future of the STR Industry. There’s no one, except for the Voters, to blame for this, they voted these “Predators” into office. By killing off the STR Market everyone will be left vulnerable to the Resort/Hotel Industry and their ever increasing rates and fee’s.
There are way too many Stars in what used to be quiet, residential neighborhoods. Anyone with a vacation rental next door would love to have a long term owner or renter vs the endless stream of party people. Less STRs will make it more affordable for Hawaiians to stay here instead of escaping to places like Vegas where housing costs aren’t outrageous
Brion C. I am wondering what “Stars” you’re referring to as typically they would Own the properties, not rent them, and would be Unaffordable if they would rent it. Many STR’S have Paid Managers that insure the property is taken care of and Loud, Outrageous, Parties do not occur. You, as well as many other Hawaiians, have been fed a multitude of lies by Council so as to garner your support. Those Lies and Line of BS have been Exposed as such, yet some still believe. All of this is for the Benefit of the Hotel and Resort Industry to have Zero Competition!
Thanks, Ernie, same scenario in San Diego!
what court case is set to begin in February?
In Oahu the Council is being taken to Court due to the latest attacks on the STR Properties. Council has introduced extremely harsh requirements and laws that will, if successful, with all practicality destroy the STR Market totally. The Owners are fighting this, they should ask the court to not only rescind the latest laws and regulations but to also void the previous ones that limit rentals to a minimum of 30 days. Council members have used Outright Lies and Innuendo to support their claims and get support from the people, thankfully all of this was exposed. Unfortunately some people still believe Council. The only people benefitting are Resorts and Hotels, interesting isn’t it?
I’m really surprised to read all the negative comments regarding Vacasa since our family had a wonderful experience renting from them. Granted, it was in Northern California but they were responsive to our questions and provided great service. So when I heard they bought out Kauai Pacific Real Estate (whom we loved renting from several times) I wasn’t overly concerned. I haven’t seen too many comments here about Kauai rentals so we will probably give them a try down the road.
We recently rented from Vacasa for just 2 days and were deluging by their annoying emails that went on and on even after the rental. Also the management costs equaled the rental fees. We would never rent through them again.
Every vacation home owner I know is unhappy with vacasa. They have marginalized local community rental agencies and wages. One owner told me phone support was in Asia and useless. A layoff of 1300 people in Hawaii is bad, but the local agencies will hire them back. The vacation market in Hawaii is strong. Expedia and Airbnb surveys show that vacation travel is very important to consumers in 2023, and they are still willing to spend $ on domestic and international locations. Mahalo and thanks, Mark
I wanted to take my family on an inter island vacation in a couple months. However, with hotel costs as high as they are it’s cheaper to fly and stay on the mainland than it is to do an inter island vacation.
Well the problem is they do not know how to manage units . They dont stress to old elderly owners that do not want to put a pennie to update there (1970) units that are dated with old furniture an bedding etc. But owner still charges like its updated. The management teams have no experience in manage owners .These are commercially run places an that’s what’s missing.
I see opportunity for a great operator.
Our Maui condo rental agency sold out to Vacasa. We changed agents as quickly as we could. We have decades of experience both owning and managing rental properties, mostly on the mainland. Their customer service was terrible. We switched to a local company and the difference has been night and day.
To me it sounds like Vacasa has a good, profitable, business model, however, they have spent too much time growing while not dedicating enough time and effort to control their spending and other essential controls which are plaguing the business. To that end if they don’t address those problems they will be in receivership within 18 months. The Hawaiian Market “Could” become a losing proposition within the next few months depending upon a Court Decision of a case that should begin within the month pitting Oahu Council’s unreasonable Overreach against STR Owners Property Rights. If the Property Owners are Successful the STR Market will continue and Hopefully can recover losses incurred. If they lose the Owners, STR’S, and Tourists Lose.
After dealing with Vacasa once, I would Never secure a rental through them again. There is no way to deal with one individual, no common thread with an issue. Had to explain problem at least 10 times to 10 different people before issued resolved. No one bothered to contact me after writing a letter of complaint. Love dealing with other local Hawaii property management companies.
Our experience was the same. They refuse to give any documentable information. No last names, no direct phone numbers, no titles, never take any responsibility or action. Terrible company.
We rented at Mahina Surf for years. Then Vacasa took over
Fees are high, rent has doubled per day
No more Vacasa for us
Vacasa is the worst. I reported them to the North Carolina Real Estate Commission and NCREC “slapped their fingers” no penalties. Vacasa put the blame on housekeeping, but problems obviously were not them. The property had broken (slum-like) furniture in almost every room, roaches, and they ignored our complaints. Rented for 2 wks and left after 1. Had to fight to get money for week we left. They tried to gaslight us – after we left, they replaced some furniture and said how wonderful it was and we missed out! Vacasa doesn’t treat owners or renters fairly by outrageous charges with no real value. They buy mom and pop real estate companies removing any real choice for renters. Avoid them! Never had a problem w/VRBO or AirB&B in 20 yrs.
AirB&B is no better, my friend, although more responsive to guests than hosts
Vacasa has been our property manager for the last several years. We live part time in our Poipu condo and rent when not there.
Our local contact, Daniel, has been a dream and become a friend. We know our cleaning crew and they are fantastic. All of our reviews have been 5 star.
We would not be able to keep track of all the Hawaii taxes and fees nor have the world wide advertising abolities on our own.
Please remember the Kauai Vacasa employees are local. Bashing the corporation hurts local families.
I just rented a home in Truckee, CA for a family ski trip. Booked it through VRBO but managed by Vacasa. Essentially $1000 for the three nights and $1000 in fees and taxes. Got an email saying I could extend my stay an extra night for $165. Sounds great until you click to actually book the extra night. Ends up $577 with the taxes and fees for the extra night. It has gotten really outrageous!
Due to mismanagement,overpriced or predatory bookings a lot of “vacationers” are cutting back on booking holidays and purchases in Hawai’i
(exhorbatant fees & taxes are the most add-ons. 😱
Probably trying to recover their 2 BillionDollar losses from you. (Yes, taxes & “The Fees” are way out of the ballpark)😡
Sounds like California has an outrageous amount of taxes added to the rental properties, another reason why I stay away! Not knowing where the Fees are going I am “guessing” that some are imposed by the Local Taxing Authority, everyone must get in on the Feeding Frenzy!
That is good news
Hawaii be begging the so called low Enders to come back soon. 1 percent have the money to all your chips in on the 1 percent when there are much better options around is getting a bit risky. What about all the big conventions I know there was a dentist convention had like 5000 or so come into Waikiki. Are the attendees supposed to pay and then get reimbursed?
I used to live in O’ahu and still have family there. That being said I now live on the East coast. With all that is going on in Hawaii and the costs to vacation there the Caribbean is a
Better option for an Island vacation. I am by no means comparing the culture as I have Relatives with Hawaiian blood. I am just comparing pricing
Vacations in the Caribbean are Awesome and depending upon where you go an”All Inclusive” 10 day vacation including Round Trip Airfare costs about $1,000.00 per person. We can have 3 Vacations for the price of One in Hawaii. Why should anyone visit Hawaii frequently just to waste money on everything that’s overpriced and being told that you’re not welcome? Think about That!
Airbnb is a search and booking engine, for which it takes a huge fee and offers little else.
Most Airbnb-listed rentals are available through another booking route, such as a local property manager – or, for Vacasa properties, Vacasa’s own web site.
Use Airbnb to search and then book directly.
“We hear the words but no longer hear the music.” Thanks for the laugh, and I am stealing that! It’s such an all-purpose phrase, isn’t it?
If visitors only knew the difference they would choose vacation rentals that are owner managed and have a few dozen 5 star reviews on VRBO and/or AirBnb.
On every rental room or rental property visitors are forced to pay ridiculous, unwarranted and unethical sales tax, occupancy tax, county fees, city fees, resort fees, miscellaneous, readily undefined fees and in certain cases cleaning fees.
Hawaii is a world class, beautiful place to visit, to explore and to return to time and time again but the continuing economic burden placed on visitors cannot continue without some negative effects.
Visitors will go elsewhere. They have a choice.
Hawaii needs to change leadership in a big way. Unfortunately, I don’t see that happening anytime soon and the consequences may be jobs lost in the tourism sector in a big way.
5 percent is world class 95 percent is a dump. Seriously take away the high end resort areas kahala and a few others and it really is no better than Detroit with a beach a few miles away.
Do the BOH writers have a beef with Vacasa or have an undisclosed conflict of interest? I’m on FB and can tell you than the Vacasa Fraud Victim Page has little activity — of course, this hit piece may change that. Also, Yelp is an unreliable barometer for customer satisfaction — we all know that typically only disgruntled customers post on it.
Having said all that, I will probably be accused of being a Vacasa shill. I can tell you that I am definitely not. Have I used Vacasa in the past? Yes, with few issues. Would I use them again? I guess it depends on where I am traveling and what my needs are. But this article will not deter me.