VCSA - Vacasa: Changing The Sector's Paradigm Requires Patience

2024-03-19 06:02:58 ET

Summary

• Vacasa is shifting its strategy towards a more conservative approach, prioritizing high-value properties over mass acquisitions in the short-term rental sector.
• The company aims to improve operations, tighten relationships with property owners, and integrate with hosting platforms like Airbnb to enhance the user experience.
• Vacasa faces competition from domestic and international companies, but the European giants are hesitant to enter the US market due to its complexity and the need for significant capital investment.

My thesis

My "Hold" thesis for Vacasa, Inc. (VCSA) stock is based on my outlook for the short-term rental industry due to a shift in the paradigm from growth to a focus on operating profitability. My conclusion was based both on the analysis of Vacasa's forecasts for the years 2024 and 2025 and on the sectoral projection observed at the 2023 Short-Term Rental Summit.

In this way, the sector will prioritize the acquisition of properties with high added value, acquired through individual negotiations, and will avoid mass purchases from a specific client portfolio, through the acquisition of local property management companies. This acquisition model proved to be inadequate, as there was a stampede of platform owners in 2023.

Qualitative analysis

Vacasa is one of the largest property management companies focused on vacation rentals in the United States. The company also has properties in Mexico, Canada, Costa Rica and Belize in its portfolio. The company proposes to act as an intermediary between the landlord and the tenant through a technological and integrated application system, while offering a series of services related to property management, such as cleaning services, property brokerage services (since 2018 with Vacasa Real Estate ), interior design services, among others....

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