Can Vacasa’s Strategy Change Keep Homeowners From Leaving?
01.03.2024 - 00:11
/ skift.com
/ Srividya Kalyanaraman
/ Rob Greyber
/ Dustin Abney
How many times was “churn” mentioned in Vacasa’s earnings call? 16 times, noted one executive in the short-term rental industry (and, yes, we counted too).
Mounting losses, layoffs and dwindling bookings — Vacasa has several issues to tackle, but its most persistent problem still remains: Homeowners leaving its platform and a tarnished brand image.
In the fourth quarter of last year, both gross booking value and revenue were down 19% year-over-year. And Vacasa lost another 5% of homeowners last year, finishing 2023 with 42,000 homes.
Vacasa CEO Rob Greyber said during an earnings call in November last year, that homeowners would continue to leave its platform until the first quarter of 2024. The company claimed at the start of 2023 that it’s making a strategy change to stop some of the churn: to move away from its approach of acquiring portfolios of property management companies in different markets to organic sales. Results from that change remain to be seen.
“They seem to have a churn problem and it is even more well known than they let on in their reporting. It’s fairly industry-wide knowledge that after their acquisitions of property management companies they tend to churn 30% or more of their contracts,” said Dustin Abney, CEO of South Carolina-based property management company Portoro. “This is a huge problem when you aren’t filling the leaky bucket back up with organic sales.”
The new strategy might be smart as the cost of acquiring portfolios is much higher than the cost of acquiring customers by pursuing individual contracts.
The Better Business Bureau is rife with complaints from disgruntled homeowners using Vacasa. The complaints range from issues with property damage, Vacasa’s alleged negligence in paying refunds, communication delays, faulty advertising and failure to accept responsibility for its actions.
It’s worth noting that Vacasa has an A+ rating from the Better Business Bureau — also worth noting that customer reviews are not used in the rating.
Vacasa didn’t immediately respond to a request for comment about the BBB complaints.
Vacasa had committed to make 2023 the year it made it its mission to improve the homeowner experience. This includes surveying them, taking feedback and improving their experiences.
But during the earnings call yesterday, Greyber said: “I think the other dynamic of home growth for us is it’s really centered around churn. And we’ve seen that continue to be elevated. We’ve seen a number of the leading indicators that we watch move in the right direction, and to do that steadily, but we’ve not yet seen that show up in the results when it comes to churn.”
What gives?
In the round of layoffs announced yesterday, Vacasa cut 2% of its local operations team