Q&A with Vacasa CFO as vacation rental company goes public at $ 4.4 billion valuation


A holiday home on the Vacasa platform. (Photo Vacasa)

Vacasa is officially a public company.

The Portland, Oregon-based vacation rental platform debuted on NASDAQ after finalizing a PSPC 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 about 10% in trading on Tuesday.

Founded in 2009, Vacasa operates more than 30,000 vacation homes in 34 US states and four other countries, and is recognized as the leading full-service vacation rental management company in North America.

Vacasa somehow competes with other giants like Expedia’s Airbnb and Vrbo, but also manages ads on those platforms. It is both a bargain and also helps owners manage the entire booking process from start to finish. The company reported third-quarter revenue of $ 330 million, up 77% year-over-year.

Travel agencies have been rocked by the pandemic in various ways, but the vacation rental market has exploded. Sonder, which manages short-term rentals, and Inspirato, a subscription service for vacation homes, also plan to go public this year through SPAC deals.

The short-term rental industry is bigger and more profitable than it was before the pandemic, the Wall Street Journal reported.

Jamie Cohen, CFO of Vacasa (Photo Vacasa).

We caught up with Vacasa CFO Jamie Cohen to learn more about how Vacasa is positioning itself within the broader travel industry; the impact of the pandemic on the company; and go public in the midst of a tough time 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 affairs at this time.

Jamie cohen: We’re going to make over $ 875 million in revenue this year. We are in a really strong position.

There has been a shift in consumer preference towards vacation rentals for a decade, and it has really accelerated in the last 18 months. During this period, at least about 20% of consumers who have stayed in vacation rentals have done so for the very first time. And 86% of them say they will continue to stay in vacation rentals in the future. You see a lot of trials from new categories and people are really happy with those experiences.

Vacation homes are unique and you have a lot more space. It’s a great way to travel, whether it’s someone alone, with their spouse, family or friends.

And I think that, combined with this trend towards remote working and people with a lot more flexibility, these are lasting trends and favorable winds for the industry.

GeekWire: Tell us about the remote working trend and its impact on Vacasa.

Cohen: It’s a good tailwind and it continues. I don’t think the majority of people go back to a full-time office scenario. This flexibility allows them to explore more destinations and Vacasa is well positioned to allow it.

GeekWire: How does Vacasa fit into the wider travel industry, especially companies like Airbnb or traditional hotels?

Cohen: Vacasa is a technological platform. We are very focused on adding homes to our platform and generating as much income as possible for our owners. We do it with our technology. We have dynamic pricing and algorithms capable of maximizing household income. We also list on all different channels – we partner with Airbnb, Booking, Vrbo, Marriott Homes & Villas and hundreds more. This is one of the reasons we can generate so much income for our owners. These partnerships are very important to us. They represent around 65 to 70% of the gross reservations of Vacasa; Vacasa.com represents around 30-35%.

We also focus on vacation destinations primarily in the United States. We don’t have as much of an urban presence as others.

GeekWire: Why go public now? And why take the SPAC route?

Cohen: The company is at the size and scale that we thought it was time for us to go public. Given that we’re going to generate over $ 875 million in revenue this year, we’re on a very large scale.

“There will be market fluctuations, but we are really focused on the long term. “

We have also recruited an experienced management team who have managed public companies. Matt Roberts, our CEO, helped bring OpenTable to the public. I helped bring ANGI Homeservices to the public. There are a number of other executives on our team who have experience in public companies. So we really built this management team.

And finally, we wanted to raise additional capital on the balance sheet to allow our growth. Our approach to market is very economical, both with what we call our individual strategy of adding homes through our direct sales force and through a portfolio approach where we buy from local property managers. So we believe now is the perfect time to raise additional capital and invest for growth.

Ultimately, PSPC or IPO, the end result is the same. We have found a great partner in TPG Pace Solutions. They have experience in the sector. These were investors in Turnkey, which we bought in April of this year. They have a lot of experience in the hotel industry. TPG Managing Partner Karl Peterson, who joins our Board of Directors, was the founder of Hotwire.

This is probably the closest PSPC to the IPO we could find. TPG had an excellent shareholder base who truly believed in the fundamental long term history of Vacasa. We were therefore delighted to partner with them to make Vacasa public.

GeekWire: Last week, the IPO market had its worst time since March 2020. CNBC made headlines today: Tech IPOs were a bad bet in 2021. Are you worried about going public right now?

Cohen: There will always be some volatility in the market, day to day. And I think if we really look at the long term time horizon, Vacasa will continue to grow and be a major player in the space and recognize this vision of being a global hospitality leader in the hospitality industry. vacation rental, powered and led by technology. There will be some fluctuations in the market, but we are really focused on the long term.

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