Like Airbnb? Then You’ll Love This Growth Stock.

It doesn’t often happen that a company revolutionizes an industry. But that is exactly what a holiday rental platform is Airbnb (ABNB -3.10%) he did. With over 6 million active listings, Airbnb has taken on alternative vacation lodgings.

While Airbnb was the first, it is no longer the only one. Now, there are companies like Vacasa (VCSA -5.80%)which provides complementary services to vacation rental platforms, which can further grow the world of vacation rental industry.

Here’s a closer look at Vacasa and why, if you like Airbnb, you might also love Vacasa.

Not your regular vacation platform

On the surface, Vacasa does not look very different from Airbnb or Expedia Group.’s VRBO (NASDAQ: EXPE). Its listing platform contains nearly 35,000 vacation properties in North America, Belize and Costa Rica. However, there is a big difference.

Vacasa is a property management service that works directly with property owners, and lists the properties you manage for rent on its listing platform. Other listing platforms, such as Airbnb or VRBO, put the responsibility for managing the rental on the property owner. But Vacasa uses local management teams to take care of things like coordinating repairs, checking in guests, cleaning the property between bookings, and more.

The standard listing fee is around 5% to 7% on most traditional vacation booking sites. Vacasa charges 30% for property management and listing services, which may seem like a drastic difference, but it removes a lot of ongoing financial and management responsibilities from the property owner, saving them time and money in the long run.

How big can a Vacasa grow?

Vacasa went public late last year after merging with special purpose acquisition firm, TPG Pace Solutions. Unlike many of the SPAC IPOs that have taken place over the past few years, Vacasa is actually well on its way to reaching its growth potential.

As a vacation property manager first and listing platform number two, Vacasa is not in direct competition with larger listing platforms like Airbnb or VRBO. The company earns significantly more fees for property management services than it earns from its listing platform, so its focus is on acquiring new property owners, not trying to become the next big listing platform.

Vacasa manages an increasing number of properties for the owners listed on those platforms. For example, Vacasa manages about 47% of all Airbnb listings in Destin, Florida, and 24% of the listings there are on VRBO. It also sends the vacation property he manages to be listed on 100 independent booking sites to ensure his properties get as many reservations as possible for their clients.

Currently, Vacasa only has a 1% market share of US-listed vacation homes on VRBO and Airbnb, which leaves a significant upside for future growth. In addition, there are about 20 million vacation homes on the global market that it could expand into when it establishes services in those areas. However, penetrating the market will take some time. Its revenue for the second quarter of 2022 is up 31% compared to the same period last year.

As of the second quarter of 2022, Vacasa’s net income was $9.9 million. However, its EBITDA was negative $2.5 million. He was not able to maintain consistent profitability. As a result, the company announced a plan to pause discretionary programs to make EBTIDA earnings faster. She appears to be carefully managing $285 million in cash from the SPAC fund.

Is Vacasa a Buy?

VACA’s stock price took a massive hit in the stock market crash, down 65% since its initial public offering earlier this year. And frankly, too much of a loss in its stock price is bad timing. I believe that its intuitive platform and ease of management will attract more and more vacation owners to its platform. It simply just takes time. Travel is very cyclical, and given that it is still a smaller name, it is too costly to convert new owners until it becomes a mainstream solution.

Of course, there is no guarantee that the company will achieve the growth it hopes for. Growing a project like this requires a lot of capital. If there is less interest than expected from landlords in Vacasa services or a slowdown in the vacation rental market, it could result in the company not meeting its growth targets and quickly running out of money.

But investors who believe in the long-term success of the vacation rental industry should consider adding Vacasa to their portfolio. With its share price dropping sharply and settling at $3.33, it’s a very cheap buy that could eventually pay off if held for the long term.