A company with a unique business model that could threaten Airbnb and grow by 3500%

Many analysts are tipping this company with a possible successor to Airbnb, which has great growth potential. This company is still at a relatively early stage and yet has a big market opportunity ahead of it. Vacasa $VCSA-0.9% claims that their user can earn 20% more compared to other competing platforms and their platform provides a more comprehensive set of services.

A company with the potential to compete with Airbnb and a lot of room to grow.

A short definition of $VCSA-0.9%

Vacasa, Inc. operates a vacation rental management platform in North America, Belize and Costa Rica. The company allows guests to search, discover and book its properties on Vacasa.com and the Vacasa Guest App. It also provides vacation home buying and selling services through its network of real estate agents. Founded in 2009, the company is headquartered in Portland, Oregon.

According to the latest information, there are more than 35,000 homes under Vacasa . It also has several adjacent businesses such as a network of real estate agents that helps people who want to buy vacation homes for rent.

https://www.youtube.com/watch?v=PxwKZLhZs_8&ab_channel=Tripeefy

What sets it apart?

  • The company provides comprehensive property management including reservations, cleaning, maintenance and more.
  • It uses technology to make the management process as efficient as possible as well as maximizing the return for the owners of the managed properties.
  • In fact,Vacasa claims that its typical vacation home owner can earn 20% more by renting on its platform than through other professional property managers.

https://www.youtube.com/watch?v=3IN8hF6YE4c&ab_channel=Vacasa

A market opportunity?

Obviously, a portfolio of 35,000 vacation rental properties doesn't compare to the millions on Airbnb's platform. But that's kind of the point. Vacasa is already a leader in comprehensive property management, but manages less than 1% of the properties in its addressable market. There are about 20 million vacation homes worldwide and more than 5 million in the United States alone. There is simply no national brand in vacation rental management, and that is what Vacasa is trying to create. There is a huge opportunity here. It's estimated that more than $200 billion will be spent on vacation rentals in 2022, and Vacasa had 0.8% of that volume in 2021. What's more, vacation rentals are growing twice as fast as traditional (hotel) lodging.

The difference between Vacasa and Airbnb

  • The key difference between these companies is that Vacasa, unlike Airbnb, is a full-service property manager. Whereas Airbnb is just a booking portal.
  • As a result, Vacasa charges significantly more money for its services.
  • Vacasa's vacation rental management fees typically range from 25% to 50% of the rent. Airbnb only gets about 3% of the booking volume.
  • This means that Vacasa does not need to reach the size of Airbnb to generate such a large amount of money. It could do it with about 1/10th of the booking volume compared to Airbnb. Which is certainly an ambitious goal, but not unattainable.
  • What needs to be mentioned is that Vacasa is not necessarily a competitor to Airbnb but they can work together and Vacasa can also sell their services on Airbnb and other platforms for example and Vacasa's growth can be mutually beneficial.

Results

  • In the second quarter, Vacasa's bookings grew 32% year-over-year and revenue exceeded the high end of management's estimates.
  • The company is on track to increase the number of homes it has under management by 30% in 2022.
  • It expects to be near profitability on an adjusted EBITDA basis in 2022 and to achieve positive net income in the second quarter.

Risks

Vacasa is certainly not without risk as their business model is focused on a cyclical sector that is susceptible to various recessions or pandemics, as we have seen recently where borders close and there is no travel. Also, in the event of a recession, people will cut back even more on spending. Vacasa falls into the speculative category when it comes to travel stocks because it is still in a relatively early stage of growth. However, with a market capitalization of less than Airbnb's 2.5% and a capital-light, high-income business model, Vacasa certainly has great potential if it can realize its vision. Therefore, if you are the type of investor who can accept a higher level of risk, then this may be the company for you, however this is not investment advice just the opinion of a retail investor.

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