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Here's How Vacasa Plans to Take Its Business to the Next Level

By Matthew Frankel, CFP® – Dec 29, 2021 at 6:47AM

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The leading vacation-rental manager sees a massive opportunity.

Vacasa (VCSA 12.05%) recently went public by a merger with a special purpose acquisition company (SPAC) and is now setting its sites on building a dominant presence in the vacation-rental management business. In this Fool Live video clip, recorded on Dec. 7, CEO Matt Roberts explains to contributor Matt Frankel how the company plans to scale its business over the coming years. 

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Matt Frankel: We mentioned that you have less than 1% of the vacation homes in North America on your platform right now. You could conceivably 10x your business, and I think it would work out to something like 7% of the market or something to that effect. But there's obviously a lot of execution that has to go well in getting to that point. What do you see as the biggest challenges to scaling to take Vacasa to the next level?

Matt Roberts: For us, it always started with technology. The whole thing is dependent on technology and the proprietary technology platform that we have created. We use it for every aspect of our business. We use it to support our team doing the operations of the business. We help it to drive better revenue and care for homeowners, and experiences for guests. The nice thing about what we build is when we build something for one of those users, let's say our own operations team, it directly benefits the other two.

We have, for example, this home care hub. Think about the way that Uber routes their drivers. They have a dispatch system, and they know exactly how much time and who should get the call. We have the same thing with our home care team. We have predictive clean-time analytics, we have most efficient drive-time routing, and we use that in order to route our team members. The end result is they're provided the right amount of time to provide a great clean experience for the guests. The guest has a great experience, they leave a five-star review. Five-star reviews drive revenue from homeowners. There's this nice connective tissue between each of, for what we do on the technology side and each user's benefit.

Matt Frankel: I would've thought you would have said the labor shortage as the biggest obstacle to scaling.

Matt Roberts: Sorry to interrupt, but interesting on that, it's a great topic, and honestly it's all over the news, and we're no exception in terms of it's more challenging now than it's ever been. But we task the team to scale the operations to meet better than our forecasted summer volumes, and they deliver. We hired thousands and thousands of people in two months, and we did that because we have a centralized function for recruiting, and it's run like, if you think about it, it's almost a sales pipeline. We make sure that we go out there. We have to be competitive in the market from a rates perspective, and we think we provide the tools and technology to help our team members have a better working experience as well.

Matt Frankel: Your cleaning crews, your maintenance teams, are they cost-center employees or do you use third-party contractors?

Matt Roberts: Well, both. We have many, many of our own employees as home-care team members, but we also supplement that, and certainly on a market-by-market basis it would be a different mix, with contract resources. The nice thing, though, Matt, is all of those resources, all of those team members are still managed under the same technology platform. Even if it's external team members, they can log in and they use our field app. They can get routed to the right destinations. We built it extensible for internal employees as well as contracting resources.

Matt Frankel: I couldn't imagine trying to get 10 properties cleaned on the same date, let alone 35,000. I'll give you the last word. Where do you see Vacasa in say 10 years and what do you think investors should really know about your company as the last word?

Matt Roberts: Well, I think we have this really exciting opportunity to build the first hospitality brand in vacation rentals. I think we're laying all the groundwork to be able to deliver on that promise by supporting our homeowners and providing great experiences for guests. But this is a really exciting mission to be on because vacation rentals are definitionally all different. There's not a uniformity to them, and people like that because it's not cookie-cutter. But at the same time, they want a consistent and good experience. They want good service levels against a really snowflake level of properties. What I believe will be our opportunity is to build that hospitality brand as we move forward.

Matthew Frankel, CFP® has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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