Skift Take

Despite everyone's happy talk, this deal smells like Hyatt was disenchanted by Oasis' performance and eager to unload its investment stake. That aside, the deal boosts Vacasa in an area where it has been underserved to date.

Vacasa, a property management company that uses technology to wring efficiencies out of vacation rental marketing and distribution, is acquiring the inventory and hiring the employees of Oasis, a serviced home rentals platform.

The companies didn’t share financial details of the deal.

From the outside, it appears that Oasis didn’t live up to its early hype.

Thirteen months ago, Hyatt revealed it had made an unspecified but “significant” strategic minority investment in Oasis, which brought the company’s total fundraising to $35 million.

Hyatt integrated Oasis properties into its distribution and loyalty systems. Oasis properties became bookable on Hyatt’s website under the corporation’s Unbound Collection soft brand. In March 2018, Hyatt made it possible for more than 10 million active World of Hyatt members to earn and redeem points through stays at Oasis properties.

In a turnabout, Hyatt said Tuesday that it is breaking off ties with Oasis as part of the sale, at least for the time being — though existing reservations will be honored and given loyalty points and credits.

“Effective immediately, Oasis Collections is no longer affiliated with The Unbound Collection by Hyatt or the World of Hyatt loyalty program,” said a Hyatt spokesperson by email.

“We recognize that customer demand for the alternative accommodations offering remains strong for occasions when travelers seek more space or a longer stay, and we will continue to evolve our approach as to how we might best serve that need, which may include discussions with Vacasa,” the company said.

The abrupt interruption, and possible end, of a Hyatt marketing partnership suggests that Oasis had not lived up to performance expectations. Perhaps Hyatt was in enough of a rush to cut a deal to unload its involvement in the unit that it decided not to delay matters by figuring out how a continued partnership might work.

Oasis, unlike some other rental platforms, provides hotel-style amenities such as an on-the-ground host who handles check-in and concierge services. Better capitalized companies like Airbnb are also entering this space, as shown by the launch earlier this year of Airbnb Plus, which includes more than 2,000 vetted homes in about a dozen destinations.

In the past year, something seems to have gone partly awry at Oasis. As of today, the company has 60 employees. But a year ago, it had 150. It used to run membership clubs in Rio and Buenos Aires, but it’s gotten out of both businesses to focus on rentals.

The recent economic troubles in key markets of Argentina and Brazil in the past two years can’t have helped with matters. Regulatory crackdowns in New York City and San Francisco also hurt.

But the sector is also hard. In July AccorHotels said it had written off $288 million (€246 million) from two of its marquee investments, Onefinestay and John Paul.

Before Hyatt’s involvement in Oasis, Accor Hotels had been an investor in the startup. At one point, Accor held a 30 percent stake. But upon Hyatt’s entry, Accor sold, deciding to focus on its comparable Onefinestay luxury alternative accommodations brand.

“You’re not going to win the supply war against Airbnb or Expedia-backed HomeAway or, even if you think your supply is unique,” said Sundeep Chanana, CEO of investment bank Horatio Partners. “Because, as we’ve observed, Airbnb will acquire more and diverse supply — whether it be from organic efforts or through deals like acquiring Luxury Retreats.”

“You have to offer lodging partners more than a presence on a marketplace, but those value-add services are really, really tough to scale,” Chanana said.

A Win for Vacasa

Vacasa claims that this acquisition makes it the largest, full-service vacation rental management company based in North America, by property count, with 10,600 properties worldwide under management. That means it has officially dethroned the bearer of that title to date, Wyndham Vacation Rentals.

With the deal, Vacasa bolsters its inventory of upscale properties, especially in urban and international destinations.

Founder and CEO of Vacasa Eric Breon said, “Vacasa will be expanding into most of Oasis’s markets to serve their homeowners and guests.”

Markets include Barcelona, Bogotá, Cartagena, Ibiza, London, Madrid, Mexico City Miami, Milan, Montevideo, Paris, Punta del Este, Rome, Santiago, and São Paulo.

Corporate Travel Angle

Founded in 2009, Oasis was somewhat similar to Vacasa in that it offered a hands-on, hotel-like experience for guests.

But unlike Vacasa, which primarily has inventory at resort and leisure destinations, Oasis had many urban properties and a list of corporate clients, such as McKinsey and Ernst & Young, which used its serviced apartments for business travel and extended stay relocations.

In other words, Vacasa shows signs of taking an interest in the serviced apartments sector. While others, including Airbnb, have shown interest in the business travel market, Oasis has built up a sweet spot that may appeal to cautious corporate travel managers by providing on-the-ground hosts who can assure relevant duty-of-care services.

Vacasa will continue the work for corporate clients. But it hasn’t decided if it will keep the Oasis brand or merge it, said Breon.

More than most property management companies, Vacasa has driven its growth through acquisitions fueled by a mix of venture capital and revenue growth. The Portland, Oregon-based company has secured at least $143 million in total. Other players whose services somewhat overlap with Vacasa’s in the U.S. include Sonder, which has raised $135 million to date; Evolve, $103 million; Turnkey, which has raised more than $72 million; Pillow, which has raised $16 million; and StayAlfred, which has raised $15 million.

As for Accor and Hyatt, they have written down their high-profile vacation rental property management company investments. Presumably, they’ve pressed the reset buttons on their approaches, rather than abandoned the segment.

“Their strategy to become more software than services and to increase the addressable market beyond hotel lodging is smart for obvious reasons – higher margin, more scalable revenues, with a larger market cap to grow into,” said Chanana.

Soft Landing

Vacasa intends to keep all of the company’s 60 employees, the company said. That includes Parker Stanberry, founder and CEO of Oasis. In an interview with Skift last year, Stanberry said we should expect to see much more consolidation.

Well, that prediction proved prescient.

In an interview on Monday, Stanberry, said, “Even for the larger hospitality players, it’s a challenge to scale organically and globally in alternative lodging, whether corporate serviced and leisure rental, because it’s such a fast-growing and fractured market.”

“Even larger property management companies like Vacasa or Sonder still have tiny market shares, so that observation remains true today,” said Stanberry. “I wouldn’t be surprised if there is more consolidation to come.”


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Tags: hyatt, oasis collections, property management companies, vacasa, vacation rental tech

Photo credit: Shown here is a studio apartment by Berna Boulevard in Bogotá, Colombia, that is available for rent through Oasis Collections, which said Tuesday it had been acquired by vacation rental tech company Vacasa. Oasis Collection

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