Vacasa is officially a public company.
The Portland, Ore.-based vacation rental platform made its debut on the NASDAQ after completing a SPAC merger with TPG Pace Solutions that values the company at $4.4 billion.
Vacasa will add more than $340 million to its balance sheet as part of the transaction.
Its stock was down around 10% in trading Tuesday.
Founded in 2009, Vacasa manages more than 30,000 vacation homes in 34 U.S. states and four other countries, and bills itself as the leading full-service vacation rental management company in North America.
Vacasa in some ways competes with other giants such as Airbnb and Expedia’s Vrbo, but also manages listings on those platforms. It is both a marketplace and also helps homeowners manage the entire booking process from start-to-finish. The company reported $330 million in third quarter revenue, up 77% year-over-year.
Travel companies have been rocked by the pandemic in various ways, but the vacation rental market has boomed. Sonder, which manages short-term rentals, and Inspirato, a subscription service for vacation homes, also plan to go public this year via SPAC deals.
The short-term rental sector is larger and more profitable than before the pandemic, The Wall Street Journal reported.
We caught up with Vacasa CFO Jamie Cohen to learn more about how Vacasa positions itself within the larger travel industry; the pandemic’s impact on the business; and going public amid a rocky period for tech IPOs. Cohen joined Vacasa in January and was previously CFO for ANGI Homeservices.
Answers have been edited for brevity and clarity.
GeekWire: Thanks for chatting with us, Jamie. Talk about the state of Vacasa’s business right now.
Jamie Cohen: We’ll do over $875 million of revenue this year. We’re in a really strong position.
There’s been a decade-long consumer preference shift toward vacation rentals, and that’s really been accelerated over the last 18 months. During that time, at least 20% or so of consumers who stayed in vacation rentals did so for the very first time. And 86% of them say they will continue to stay at vacation rentals going forward. You’re seeing a lot of new category trials and people being really satisfied with those experiences.
Vacation homes are unique and you have a lot more space. It’s a great way to travel, whether it’s somebody on their own, with their spouse, or with their family or friends.
And I think that, combined with this remote work trend and people having a lot more flexibility, are enduring trends and tailwinds for the industry.
GeekWire: Tell us more about the remote work trend and how it’s affecting Vacasa.
Cohen: It’s a good tailwind and one that’s continuing. I don’t think that a majority of people are going back to a full-time, in-office scenario. This flexibility allows them to explore more destinations and Vacasa is well-positioned to enable that.
GeekWire: How does Vacasa fit in with the larger travel industry, particularly companies such as Airbnb or traditional hotels?
Cohen: Vacasa is a technology platform. We’re very focused on adding more homes to our platform and driving as much income for our homeowners as possible. We do that with our technology. We have dynamic pricing and algorithms that are able to maximize revenue for homes. We also list across all of the different channels — we partner with Airbnb, Booking, Vrbo, Marriott Homes & Villas, and hundreds of others. That’s one of the reasons we can drive as much revenue for our homeowners. Those partnerships are very important to us. They make up about 65-to-70% of Vacasa’s gross bookings; Vacasa.com makes up about 30-to-35%.
We also focus on vacation destinations primarily in the U.S. We don’t have as much of an urban presence as some others.
GeekWire: Why go public right now? And why go the SPAC route?
Cohen: The company is at the size and scale where we felt like it was time for us to go public. Given we’ll do over $875 million in revenue this year, we’re at a very great scale.
“There will be market fluctuations, but we’re really focused on the long term.”
We have also brought on an experienced management team that has managed public companies. Matt Roberts, our CEO, helped take OpenTable public. I helped take ANGI Homeservices public. There are a number of other execs on our team that have public company experience. So we really built out that management team.
And lastly, we wanted to raise additional capital on the balance sheet to enable our growth. We have really great economics on our go-to-market approach, both with what we call our individual strategy for adding homes through our direct salesforce, and through a portfolio approach where we where we purchase local property managers. So we think it’s a great time to get some additional capital and invest for growth.
Ultimately, SPAC or IPO, the end result is the same. We found a great partner in TPG Pace Solutions. They have experience in the sector. They were investors in Turnkey, which we purchased in April of this year. They have a lot of experience in hospitality. TPG Managing Partner Karl Peterson, who is joining our board, was the founder of Hotwire.
This is probably the most IPO-like SPAC we could have found. TPG had a great shareholder base that really believed in the long-term, fundamental story of Vacasa. So we’ve been we’ve been excited to partner with them to take Vacasa public.
GeekWire: Last week, the IPO market had its worst stretch since March 2020. CNBC had a headline today: Tech IPOs have been a bad bet in 2021. Are you worried about going public at this moment?
Cohen: There’s always going to be some volatility in the market, day to day. And I think if we really look out over the long-term time horizon, Vacasa is going to continue to grow and be a huge player in the space and recognize this vision of being a global hospitality leader in the vacation rental industry, powered and led by technology. There will be market fluctuations, but we’re really focused on the long term.
