It's not often that a company completely revolutionizes an industry. But that's precisely what the vacation rental platform Airbnb (ABNB 0.49%) is doing. With over 6 million active listings, Airbnb has taken alternative vacation housing mainstream.

While Airbnb was the first, it's no longer the only one. Now, there are companies like Vacasa (VCSA 4.44%), which offer complementary services to vacation rental platforms, that could grow the vacation rental industry world even further.

Here's a closer look at Vacasa and why, if you like Airbnb, you may love Vacasa, too.

Not your average vacation platform

On the surface, Vacasa doesn't seem too different from Airbnb or Expedia Group's VRBO (NASDAQ: EXPE). Its listing platform has roughly 35,000 vacation properties in North America, Belize, and Costa Rica. However, there is a big difference.

Vacasa is a property management service that works directly with property owners, listing the properties it manages for rent on its listing platform. Other listing platforms, like Airbnb or VRBO, put the responsibility of managing a vacation rental on the property owner. But Vacasa uses local management teams to take care of things like coordinating repairs, guest check-ins, cleaning the property between bookings, and more.

A standard listing fee is around 5% to 7% on most traditional vacation booking sites. Vacasa charges 30% for its property management and listing services, which may seem like a steep difference, but it's removing a lot of the financial and ongoing management responsibilities from the property owner, saving them time and money in the long run.

How big can Vacasa grow?

Vacasa was taken public late last year after merging with a special purpose acquisition company, TPG Pace Solutions. Unlike many other SPAC IPOs that happened over the last few years, Vacasa is actually on track for reaching its growth potential.

As a vacation property manager first and a listing platform second, Vacasa isn't in direct competition with much larger listing platforms like Airbnb or VRBO. The company earns a much greater fee for its property management services than it does from its listing platform, so its focus is on acquiring new property owners, not trying to become the next big listing platform. 

Vacasa manages a growing number of properties for owners listed on those platforms. For example, Vacasa manages around 47% of all Airbnb listings in Destin, Florida, and 24% of listings there on VRBO. It also sends the vacation property it manages to be listed on 100 independent booking sites to ensure its properties get the most bookings for its customers as possible.

Right now, Vacasa only has about a 1% market share of the vacation homes listed in the USA on VRBO and Airbnb, which leaves huge upside for growth in its future. Plus, there are around 20 million vacation homes in the global market it can expand into when it establishes services in those areas. However, market penetration will take time. Its revenue for the second quarter of 2022 was up 31% over the year-ago period. 

As of Q2 2022, Vacasa had a net income of $9.9 million. However, its earnings before taxes, interest, amortization, and depreciation (EBITDA) was a negative $2.5 million. It hasn't been able to maintain consistent profitability. As a result, the company has announced a plan to pause discretionary programs to achieve profitable EBTIDA faster. It seems to be managing its $285 million in cash from the special purposes acquisition company (SPAC) fund carefully.

Is Vacasa a buy?

Vacasa's share price took a huge hit in the stock market crash, down 65% since its IPO earlier this year. Much of its share price loss is, honestly, bad timing. I believe its intuitive platform and ease of management will attract more and more vacation rental owners to its platform. It simply just needs time. Travel is very cyclical, and given that it's still a smaller name, converting new owners is cost-intensive until it becomes more of a mainstream solution. 

Of course, there is no guarantee the company will achieve the growth it hopes. Growing a business like this requires a lot of capital. If there's less than anticipated interest from property owners for Vacasa's services or a slowdown in the vacation rental market, it could leave the company short of its growth goals and quickly out of money.

But investors who believe in the long-term success of the vacation rental industry should consider adding Vacasa to their portfolios. With its share price down sharply and sitting at $3.33, it's a super-cheap buy that could eventually pay off big if held for the long term.