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The vacation rental management platform, Vacasa (VCSA), had an underwhelming debut on the Nasdaq Tuesday after merging with the blank-check company TPG Pay Solutions in a deal that initially valued the Portland-based company at $4.4 billion. In its first day of trading, the stock fell 10% to close at $9.84 and was more than 3% lower Wednesday afternoon.
According to Vacasa’s CEO Matt Roberts, that has yet to materialize. “Our booking behavior continues to be strong,” he told Yahoo Finance Live on the day the company went public. “We’re not seeing any impact from the Omicron variant.”
"We posted amazing Q3 results when the Delta variant was spiking. It's partly because we're domestic focused and whole homed. So, if anything, we are quite insulated from any new variants," Roberts said.
Roberts said vacation rentals at ski destinations are among the most popular right now, but he’s also seeing a growing trend of people planning stays for 2022.
“People are very much eager to get ahead of the spring break planning and even the summer and even the fall of next year,” Roberts said. “People don’t want to miss out. They’re not wanting to risk not getting that rental.”
After seeing their business plummet by 90% at the onset of the pandemic in March of 2020, Vacasa’s business has come roaring back. Last quarter Vacasa saw a 77% jump in revenue year-over-year to a record $330 million, and expects to bring in $120 million more this year than previously forecast.
Vacasa manages about 35,000 rental homes for owners in 400 destinations in exchange for a cut of profits. While the company is still losing money, it is trimming its losses.
Demand for vacation homes and short-term rentals has surged as employees take advantage of working remotely and as home-weary consumers spend big for vacations that afford them privacy and space. According to the data tracker AirDNA, revenue in the short-term rental sector reached $3.8 billion in September, a 30% increase over 2019.
But investors are questioning the overall sector’s room for growth. Increased competition from renters and a slowdown in new-home construction is pushing up costs. That concern is playing out on Wall Street.
The vacation rental company Sonder and its SPAC partner, Gores Metropoulos II, recently announced they would cut the planned valuation to slightly over $1.9 billion, down from $2.2 billion when they first announced the planned merger.
Roberts said his company has an ample supply of homes to meet demand and that part of the $340 million in proceeds raised from the SPAC deal will go toward expanding that inventory.
“We’ll use the proceeds to triple the dollars spent on our technology and to add more properties to the platform,” he said.
“There are 5 million vacation homes in the U.S. alone, so we’re just 1% penetrated,” Roberts said. “If you look globally, there are 20 million second homes, so there’s a massive runway for us to grow the business."
Alexis Christoforous is an anchor and reporter for Yahoo Finance. Follow her on Twitter @AlexisTVNews.