Vacasa Sheds More Vacation Rental Owners

Vacation rental property manager Vacasa has been plagued by the same problem for multiple quarters: homeowner churn. 

From the end of last year until now, the Portland, Oregon-based company has seen homeowners leaving its platform and CEO Rob Greyber expects it will continue into the first quarter of 2024.

“We’ve begun to see some higher levels of churn as we move through the fourth quarter last year, and I think that coincided with changes in the slowing of booking growth, some changes in the demand environment,” Greyber said in an investor call on Tuesday. “And we began to see owners citing homeowner revenue as a reason for churn as they were frustrated by bookings coming off of the record highs the industry had experienced in 2021, in 2022.”

Vacasa Cuts Costs

Even so, Vacasa is pleased that it managed to reduce operating costs on a percentage basis in the third quarter.

• Cost of revenue was 40% of revenue in Q3, down 42% year over year.
• Operations and support expenses represented 17% of revenue in Q3, down 18% year over year.
• The company reduced its cost of revenue by 13% year over year.
• Technology and development expenses decreased by 11%, sales and marketing expenses by 23%, and general and administrative expenses by 33%, year over year.

Vacasa’s third quarter revenue stood at $379 million, down 8% year over year. The company reported a net loss of $402 million. Adjusted EBITDA increased to $74 million from $46 million in the third quarter of 2022, despite a $33 million revenue decline. The company expects a 6-7% revenue decline in 2023 and an Adjusted EBITDA of $5-15 million for the year.

Some industry metrics: In the third quarter, Vacasa’s Gross Booking Value decreased by 14% to $830 million compared to last year, driven by a 14% decrease in gross booking value per night sold and a 1% decrease in nights sold. 

Homeowners Consider What’s Next for Vacation Rentals

Greyber attributed the performance to general industry headwinds. 

“With all that said, the short-term rental industry continues to adjust to a dynamic macroeconomic environment and changing travel patterns, and we see the impacts of this in elevated levels of homeowner churn,” Greyber said. “Homeowners are responding to recent market conditions, evaluating if they should continue to rent out their home and if so, on what terms.”