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