Vacasa has raised a USD 108 million financing round in what the vacation rental management company calls a “smooth” process despite the coronavirus pandemic.
Founded in 2009, the company manages more than 26,000 vacation homes and averages two million guests per year.
The Series D strategic investment round was led by Silver Lake, with participation from Riverwood Capital and Level Equity - all previous investors in Vacasa’s USD 319 million Series C round, which in October 2019 valued the Portland, Oregon-based company at more than USD 1 billion.
Silver Lake’s participation marks the private equity firm’s third high-profile investment in the hospitality market in recent weeks: In April, it contributed to Airbnb’s USD 1 billion fund - a combination of debt and equity securities - as well as Expedia Group’s USD 1.2 billion equity investment.
Vacasa CEO Matt Roberts, the former CEO of OpenTable who replaced Eric Breon in February, says that despite the challenges brought on by COVID-19, Silver Lake, Riverwood and Level equity were all “eager” to continue to partner with the platform.
Cleanliness is key
As travel begins to resume as stay-at-home orders are lifted, he believes travelers will gravitate toward professionally managed vacation rentals over hotels as privacy and cleanliness become top priorities.
Indeed, the short-term rental market has placed a heightened focus on hygiene due to concern over the spread of the coronavirus and how measures are communicated to guests.
Recently, the company launched Vacasa Premium Clean, a new program that follows the Centers for Disease Control and Prevention’s recommendations and the Vacation Rental Management Association’s SafeHome guidance.
Road to recovery
Vacasa has started to see signs of recovery, with guest reservations in May reaching 6X those booked in April.
Its guest bookings have also increased to 723 cities in the United States, up from 357 cities at the height of the crisis. Vacasa’s booking window is also comparable with 2019 averages at 40 days compared to a booking window peak at 142 days in April.
While Airbnb and others are pivoting their models to longer-term stays, Vacasa appears to be betting on its professionally managed services to lure back future travelers for the time being. For one, different states have different regulations around long-term rentals and tenant/landlord rights, which can make the strategy complicated. Vacasa also says that given the demand it has seen in short-term rentals, “long-term stays doesn’t feel like a long-term solution.”
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