Vacasa Buys Wyndham Destinations

I could just as easily have titled this article, “Consolidation in the Vacation Rental Industry – Why I Choose Not to Sell?”

With the recent news that Portland, OR vacation rental giant, Vacasa is purchasing Wyndham Vacation Rentals for $162 Million, it’s been causing quite the commotion among industry commentators! For those monitoring Vacation Rental industry chatter, the sale of Wyndham Vacation Rentals North American arm was expected following their recent sale of their European interests. Airbnb was the rumored likely buyer and Vacasa CEO, Eric Breon hinted that Vacasa faced stiff competition in its purchase plans for Wyndham. So, it came as no surprise to see the news of the sale.

The vacation rental industry is evolving at an incredible pace. Consolidation is a natural part of that evolution. Vacasa has long exhibited its growth plan of acquiring other vacation rental businesses to add market share and multi-destination presence. The sale of Wyndham Destinations did not surprise me, what raised my eyebrows though was:

  1. It was Vacasa purchasing Wyndham and not Airbnb. Airbnb has made no secret of its intentions to go public with an IPO soon. Such a large acquisition would make sense then for Airbnb. Vacasa didn’t seem to be heading in that direction. Yet.
  2. $162 Million! Wow! That’s a serious bag of cash and a formidable round of funding! How did Vacasa keep that quiet? It now seems likely that Vacasa is positioning for IPO, in my opinion.

So, What’s my Opinion on Vacasa Buying Wyndham Destinations and Why Should We Care in Delaware?

Firstly, let’s congratulate the smart folks at Vacasa and wish them well! Good for Vacasa! Good luck to them! I’m happy for the very smart folks at Vacasa. It’s a good move. The vacation rental industry is transforming. Fast. There is room for all approaches. There are many flavors of management companies and management approaches. There continues to be a good fit for all.

Many view technology as the greatest challenge facing a fast-changing industry. I don’t share that viewpoint. I think that local, on the ground market specific knowledge is the greatest challenge. Knowledge of real estate market specifics, geography, local attractions, demographics of Guests and where the Guests originate from and so on. That is a huge challenge for a multi-destination company based outside of a region its operating in.

Raising such massive investment whether a company ends up going public, or not, raises its own challenges only sharpened by going public. Investors and shareholders want to see a (quick) return on their investment. It places phenomenal pressure on a company to accept outside investment money. What then the goal of the company? Sell and allow investors to cash out, or continue to build the company and pay back investors more slowly with higher risk of the unknown future changes facing the wider industry over time?

Time will tell of course and if the intention of the Vacasa Owners and Management team is to build and sell the company, well, every business owner does well to consider an exit plan at the outset and build it into their business plan.

For me and my company, Seachange Vacation Rentals, well, my answer each time Vacasa has called me to ask to purchase my business is, no. Not now. At the five-year mark, Seachange Vacation Rentals has experienced, fast, albeit disciplined organic growth and I consider us to be barely getting started in achieving the aims I set at the outset: my “Why” reason driving this business.

You see I chose to create a new vacation rental agency at the already crowded Delaware Beaches vacation rental marketplace because I sincerely saw a specific niche that was not being served, and in a wider sense I wanted to make a difference.

There are many vacation rental companies at the Delaware Beaches and a good fit for all. However, I perceived that the vacation rental industry in Delaware was languishing in outdated business models and not evolving in line with the needs of the contemporary vacation rental market. Supply of vacation rental property inventory is at an all-time high. Contemporary Guest needs have transitioned into demanding high end, hotel amenity experiences in private home settings. Only the strongest, most adapted, nicest, well-positioned properties, property owners, and ‘property managers’ will survive. I put ‘property managers; in air quotes since that is not what I consider us to be. We’re ‘asset managers’ – marketing and managing the investment asset of the beach house for our property owners and managing the financial investment and expectation/trust that our Guests place in us to manage their vacation experience.

So, back to the question, why should we care in Delaware? Hmm. If you own a vacation rental property in Delaware currently, then there’s a really good chance if your property is listed with a local management company, then said management company has been contacted by Vacasa in the past few years asking if they want to sell their company to Vacasa. You’ve read my opinion on multi-destination companies with their headquarters far from their managed properties. Now be clear on what I think Vacasa is up to! They’re aggressively building their volume of managed inventories to add equity to their business to prepare for an IPO and then probably a sell off and cash out. That seems to be their business plan. If that isn’t enough for you, then consider Bethany Beach, Delaware, home of ResortQuest which was bought by Wyndham a few years back. Overnight, now ResortQuest is owned by Portland, Oregon based Vacasa. That should get the attention of the Bethany Beach Property Owners and all property owners in Delaware. If there’s ever a time when Property Owners need a local ‘Property Manager’ to parse all this consolidation in the vacation rental industry, well, it may just be now.

So, am I selling? No! There’s plenty of life and room in the vacation rental industry for independently owned and operated vacation rental ‘asset management’ companies! Now is not the time to give up. Instead we should be sure of the niche that we exist to fill and double-down on what we do well that others are not.

What was the niche that I felt was getting overlooked in our market? Focus. By focusing our property owners on the needs of their Guests we not only help our property owners design, stage and deliver a property built with contemporary vacationing Guests needs in mind, we optimize the revenue delivered on the property, delight Guests and deliver 5-Star Reviews, help the property stand out from the competition, protect and increase the value of the investment that the property owner has made. Yes, we work for the Property Owner, but by turning the industry on its head and putting the needs of the vacationing Guest first, we allow our Owners’ properties to stand ahead of a crowded marketplace. Of course, there’s lots more details of how we do this if you look under the hood of our business, but in a nutshell, that’s what we do differently. We’re not a good fit for every type of Owner out there. Some Owners do not want to be told what and how to do. Some Owners do not want to incur the startup costs truly associated with operating in the contemporary vacation rental market. Some Owners want to give direction and not take it. Some Owners want to co-list with multiple agencies and you know my position on that! Again, we’re not a good fit for all. We may, however, just be a great fit for you. Our business model delivers. It works. It fills a niche and we’re just getting started! Thank you for your time. Thank you for your business. We’re in a great industry full of life!