Vacation rental management company Vacasa has expanded its Series A financing of $35 million to $40 million, with an injection of equity investment from US insurer Assurant.
The Portland, Ore.-based Vacasa claims to be the second-largest vacation rental business in the US. Its focus is on becoming a global standard for the full-service space, a market fragmented by lots of local players.
It believes it can consolidate the local players into a global platform through its use of technology to super-charge the work of its employees.
Its technology automates the management operations, such as by streamlining tickets for maintenance issues. This efficiency enables the company to break even with only about 25 homes in a market.
Vacasa's other software helps improve yield-management for owners at rates that it says are luring in new clients through word-of-mouth. Eric Breon, founder and CEO, tells us that its algorithm is superior to others in the market in optimizing price-setting. The company even guarantees more income to new owners than what they're earning currently.
As with other platforms, the company also helps with digital marketing. Its global approach gives it a leg up on local players, it says.
Vacasa manages more than 4,100 homes in 150 markets in the US, Spain, Italy, Chile, Costa Rica, and Belize.
It employs more than 1,400 people. It employs the majority of its housekeepers and local managers directly (with a minimum wage in the US of $15 an hour) instead of contractors.
Vacasa charges owners fees at the higher end of the market, say, the 75th percentile. But in exchange for the cost, the company offers full-service management, from revenue management to home repair, in the US Europe, and Latin America.
The company plans to acquire other property management companies. It believes it can apply its formula and drive more gains out of the inventory. It's acquired 14 such companies this year, to date.
Breon says that to succeed as a vacation rental management firm now, you need to either be great at driving revenue to homeowners or great at taking care of your homeowners -- or ideally both.
But he says many companies have been complacently skating by on being the only game in their resort area — or by having the oldest, best-known website that ranks high in Google search for their area.
These niche companies will face pressure, Breon argues, as Airbnb turns its attention to the vacation rental market and as HomeAway, Flipkey, Booking.com, and other players pay more attention to the market, too.
EARLIER: That noise you can hear is self-management dying on Airbnb and vacation rentals