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.
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.