Sometimes you can’t catch a break, which seems to be true at long-troubled Hawaii vacation rental giant Vacasa. Following news recently that Vacasa abruptly laid off 17% of their workforce, they’ve just encountered terrible headwinds, including shrinking revenue, mounting losses, loss of key people, shares down 88%, and more.
The greater vacation rental industry remains under pressure, having grown too fast and often without sound business practices. This darling of the stock market has gone from its recent high of nearly $10 a share to a low of $1.13 today in after-hours trading, in a precipitous drop of 88%. It seems like they announced 81% sales growth only yesterday before today’s reality became clear.
Vacasa grew quickly to be Hawaii’s largest vacation rental company.
Vacasa’s website says it still manages, maintains, and markets 1,164 Hawaii vacation rentals. But that doesn’t describe the problems you’ve reported in comments and are being widely publicized. Troubles became obvious late in 2022, as the company warned about too high costs, waning sales, and management trouble. Last month Vasasa’s newly appointed Chief Commercial Officer departed suddenly, just four months after taking the position.
BOH’s current take on Vacasa Hawaii vacation rentals.
There are obvious concerns for homeowners and those renting vacation rentals at Vacasa. The company’s future seems uncertain, even by its own carefully crafted words.
Before today’s earnings report, dissatisfaction existed among homeowners and renters as the controversy surrounding Vacasa management grew. On Yelp reviews, Vacasa now has a rating of just 2.5/5, with the reviews swinging wildly between positive and negative. Google reviews on Vacasa Hawaii came in at 2.1.
Vacasa’s situation presents an opportunity for other vacation rental management companies to improve their own waning inventory. Previously these same people had seen extraordinary challenges due to Vacasa’s money, influence, and technology.
One person recently commented on BOH: “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.”
Another said, “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.”
Airbnb is the gold standard for renting Hawaii vacation rentals.
Most vacation rental managers and individual property owners list their units on Airbnb, including Vacasa. It is the go-to destination for shopping Hawaii vacation rentals. Airbnb, unlike Vacasa, Airbnb is not a management company, so things such as customer service, cleaning, and repairs, are performed by others.
Vacasa has been charging up to 35% of its services’ total vacation rental cost. The concept worked well because it gave remote property owners a means to have a hands-free operation, even if it was expensive.
Things went wrong at Vacasa.
In today’s latest company report, Vacasa said revenue would contract this year. This comes during a cooling trend for Hawaii vacation rentals and the fact that Vacasa couldn’t keep up with the growth the company previously experienced. Then just two months ago, the company slashed 1.3k jobs or 17% of its workforce.
Vacasa also said, “We face challenges which are fixable, but not yet fixed,” without offering more details. The company added it doesn’t yet know how the “reduction in the size of our sales force and adjustments to the sales strategy will affect our home growth.”
Vacasa confirmed that they are not adding as many new properties as before and that current homeowners are departing for greener pastures. “We began to see “An increase in the number of homes leaving our platform.”
The company reported a one-third billion dollar loss today, which was fully double its prior year’s loss. They also believe that sales will decline by perhaps 10% this year. But simultaneously, they cautioned investors further about “significant uncertainty” in their business and the industry.
Staying in a Vacasa property right now in Lihue. Extremely poor customer service and paying top dollar for a tired, deferred maintenance room. No wonder the company is doing poorly.
Hospitality success is dependent upon Happy customers. There will always be some negative reviews no matter, but 2 out of 5 is a recipe for failure.
If the way they handled our booking is any indication, they should lose market share. They are not honest, failed to disclose information about our reservation in Maui, completely ruining our expensive vacation. Property was under significant renovation, odors from sealants made us stay inside , but the noise from hammers and saws from the apartment next door was unbearable. Can’t blame them for the rainy day, but it was really a terrible experience, having to stay in. We should be compensated.
I don’ do vacation rental , but turn it over to a colleague that does it successfully on Airbnb .
Now with the STR laws changing back to 30 days most travelers that are experienced kamaaina know that nobody leave the snow for 1 week they book 30 days and just bring another couple along to share accommodation . A full kitchen is what people are looking for with all the resort amenities and feeling less like a tourist staying in a local building within Waikiki .
Aloha , Robert H
What many people do not realize when they post their properties is that HomeAway, TripAdvisor and VRBO are all owned by the same corporate entities. It is becoming unusual to book directly with an owner, and therefore it can be difficult to get good information from a local source, rather than someone in a central office.
There is an important distinction between strictly booking platforms like VRBO and AirBnb and vacation management companies. Owners may list their properties on either (or many) booking platforms as well as accepting direct bookings outside a platform. It’s the owner or management companies that take care of the property, provide amenities, local information and answer guest questions. Our experience is that properties listed that have earned mostly 5 star reviews on the booking platforms and are owner-managed rather than managed through a company are by far the best to stay in.
Vacasa is not a leader in this rental sector by far, it’s no wonder they see bad headwinds. Best not to rain on Airbnb & VRBO success. I can tell you all my bookings on Kauai’s North Shore, Maui & Oahu are booked 90% plus.
Let’s hope this industry works itself out. I can’t stand the fees and the nightlight rates have doubled since covid.
Have you checked hotel rates lately? Most short-term rentals are still half the price for double the space, at least on Maui. South Maui hotel rates are over $1100 per night! Who cares about fees – it’s the value of what you get for the total price that matters.
i use a local management co. for a couple of places i have on the BI. i or they have had some hiccups mostly regarding clean ups between stays. but such is life and i have empathy for folks who have to clean up after a bunch messy tourists.
When we rented cottages, my Mom taught us to leave a place cleaner than we arrived. After all, the owner doesn’t need to allow us to come back the next year. Of course, with someone else managing the property, that probably doesn’t apply anymore. Even so, I still clean the unit during our stay and before we leave. My husband thinks I’m nuts for washing the sheets and making the bed everyday. We stay a month or more, so I do consider it our temporary home.
I would disagree with BOH about Air BNB being the gold standard for vacation rentals. Air BNB is great for guests with their 2 week cancellation policy to receive 100% refund. For Hawaiian rentals this is problematic for owners in that they most likely will not rent out their unit within those two weeks. This results in a loss of revenue to owners. VRBO has a 60 day cancellation policy to receive 100% refund and then 50% after that. While VRBO it isn’t optimum for owners, it is much better than Air BNB!
You need to revisit the Airbnb policies. Almost all hosts on the islands have the Strict policy set. The first 48 hours after booking have free cancellation, but then the guest loses 50% up until 1 week before the stay. After that it’s 100%. Most short-term rental bookings (at least on Maui) come through Airbnb.
The platforms have nothing to do with the cancellation policies. Each owner/host sets their policy. In addition, the same is true for booking within short windows.
They rose during the pandemic and charged astronomical rates. I paid $1200.00 for a beach front cottage that now rents for $5,147.00. that is highway robbery!
Lucky you! $1200 is super cheap for beachfront.
VaCasa is trying to rip me off. No heat in our mountain rental , twenty degree snow storm. Promised a refund now saying they didn’t. Terrible company
Thank you for bringing this up. I was looking at renting through Vacasa for Molokai. I only used AirBnB once and mostly VRBO as I had positive experience with them. Will most likely continue to use VRBO or hotels
Question please.. . It sounds like Vacasa only rent homes. If this is the case than wouldn’t the general objection to rentals in residential neighborhoods been a bad choice of product? Neighbors are objecting to vacation rentals in residential neighborhoods.
Mahalo
Hi Robin.
Vacasa, like Airbnb and VRBO, rent vacation homes, which means condos and houses. The listings on these sites will have appropriate vacation rental status, and a rental permit number will be reflected on each rental.
Aloha.
Aloha.
I believe VRBO not AirBnb is the gold standard for Hawaii vacation rentals. My wife and my experience has been much better with VRBO properties than those from the AirBnb platform, especially if they are owner managed with mostly 5 star reviews. They are almost always more nicely furnished, cleaner, have more amenities and just more upscale.
Gold standard? Many owners post their property on both platforms— VRBO and AIrBNB. The difference may be the service you receive from either should you need it.
We just returned from Kauai rented a 3 bedroom 3 bath condo through Vacasa, the condo was in top condition, instructions for check in were easy to follow, I texted back and forth with Vacasa during our stay, always received a prompt response, overall they were great to work with,
Thank you for the recent positive feedback, Beau. I have a condo in Princeville rented through Vacasa in October I was worried about. Stayed there twice before, but was managed by a different company until last year.
That’s what happens when a company’s main focus is squeezing as much profit
as possible via the use of dynamic pricing and not taking care of it’s customers.
As a former software engineer with deep knowledge of their practices. Run! I encourage any owner to evaluate Where the fees start and end. You are paying %35 of your booking to them. This is in addition to the roughly 15% of other fees. 50% of the booking goes to Vacasa.
Is there a discount, booking charge, employee free stay, etc? You as the property owner will be stiffed for that. Literally, I used “Vacasa Employee Credits” to stay free in houses. Guess who paid for the cleaning? The owner might notice extra cleaning charges. Always at the expense of the owner.
Well, except for the founder. He would make Vacasa cleaners perform cleans on his house at Vacasa’s expense. He also personally kept all fees when his homes rented. Plus cleans.
Dynamic pricing is heinous!!! Unless you can book super early the companies – air, hotels, STRs – are going to make you pay through the nose. This practice is nothing but extreme greed.
Perhaps they should have listened to all the local teams that tried to tell them how it should be. But no they were far to arrogant as techies to listen to boots on the ground. Treat your employees like s*** and see where that gets you, dirty condos and poor service from a skeleton crew y’all.
This was a disaster from the start. They took away our ability to show aloha and replaced it with a “less contact with the guest the better”. Good riddance.
Aloha Tammy. It sounds like you are a former Vacasa employee? You should please include that in your review as full disclosure.
On another note, I see that AirBNB also did a layoff recently. Perhaps all these platforms are doing some housekeeping.
Sorry to hear this as we have a vacation rental on Kauai, but feel like we dodged a bullet when our management company was bought out by Vacasa and we decided to go a different route and stay with a local management company. This was in 2021 and reading reviews even back then were not glowing at all. Lots and lots of complaints about cleanliness of units and nickel and diming owners. Hoping visitors with reservations are fulfilled.
Owners are leaving the Vacasa – wonder where they’re going. Would be great if local companies could acquire the business.
Beat of Hawaii: I really enjoy getting your emails as I always learn something new.
Thank you for today’s information regarding Vacasa. I am wondering what I do about our reservation for October of this year. I immediately looked up our reservation we made in January of this year. It has the Airbnb logo and says Airbnb, but under the “About your host” it says Vacasa Vacation Home Management.
We gave them $1,000 in January and another $4,000 will be scheduled for payment on September 18, 2023. The paperwork states that we have until September 26th to cancel for free. I am thinking I will get a hold of Airbnb support to see what they have to say.
Any other thoughts, comments or suggestions?
Thank you!
Hi Kathy.
Thanks for the comment. Great question. Yes do check with Airbnb and perhaps inquire about their protection since you’re paying them the money and it seems like the contract is between you and Airbnb. Indeed it seems confusing.
Please let us know.
Aloha.
So VRBO and Airbnb are booking platforms, all the management companies market the properties on Airbnb, Airbnb doesn’t own or manage Any properties. All local companies and mainland based companies who manage Hawaii rentals put properties there to get visibility and bookings. Then the company manages the booking, not the booking site! Vacasa hosting properties on Airbnb is completely normal and to be 100% expected, nothing suspicious there at all, especially when Vacasa is a premier host as listed on their site.
BOH, thank you for yet another interesting article. Yesterday, I never got around to commenting that lots of the comments posted seem so rude. No please, no thank you and full of criticism. While you have advertisements on your site, I often feel like you are reporting out of the goodness of your hearts. I appreciate all the news and your perspective.
Now for today’s article… I belong to a Facebook owners’ group and it’s often discussed how awful avacado and Evolve are at taking care of properties and guests. Steer clear, for sure.
From the group, it seems we all prefer VRBO over AIRBB. On Maui, AIRBB guests have all been strangely troublesome for one reason or another. I much prefer renting via VRBO.
Hi Lanell.
Thanks for the nice words and nearly 100 comments to date. That’s interesting about Airbnb vs. VRBO! While it started with VRBO (and we’ve used them for years), Airbnb now nearly 4 times more listings.
Aloha.
I’m a remote managing super host in CA and list on Airbnb and VRBO. Our condo is in a luxury resort on the Big Island in Waikoloa Beach Resort (our average nightly rate is $550). I knew before we purchased the only way we could afford it was to remote manage and hire a local host who does turnover for us. They coordinate the cleaning crew and conduct oversight of cleanings and vendors as well as supplies, staging and design updates. Local independent people that charge less than the 25-35% that the bigger full service property managers charge. It allows me more flexibility to charge less to my guests on the nightly rate. Look for hosts like that. We provide the best bang for your buck.