Vacasa on Death's Door
(News Item #0462, Published: 05/09/24, Author: Steve Milo, LinkedIn.com)
I am taking a break from writing about the self-inflicted crisis of ethics and chaos by the VRMA Board to discuss the implosion at Vacasa!
On the Thursday, May 9th Q1 2024 earning’s call, Vacasa saw gross booking value (i.e. RevPar) drop 18% from the same quarter last year. In Q1 2024, Vacasa had a net loss of $141 million, including an $84 million impairment charge.
Vacasa then announced layoffs to 13% of its workforce – about 800 people — (including 40% of Vacasa’s corporate and central operations roles) after a layoff in February of 5% of its work force. Per a report on Skift, among the executives being replaced is T.J. Clark, Vacasa’s chief commercial officer.
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Vacasa’s Q1 2024 results were driven by a 12% year-over-year decrease in occupied nights and a 7% drop in gross booking value. Vacasa’s CFO reported a 5% decrease in net units, as many property owners left Vacasa over revenue.
In the most bizarre spin ever, Vacasa who claimed it had superior technology and that it could scale based on a centralized model, reversed course. CEO Rob Greyber went on to say Vacasa is “significantly reducing our central corporate footprint” and accelerating an effort to strengthen local teams.
As reports poured out on social media of local teams being reduced as much as 50%, it is hard to understand how this drastic financial restructure will stop the company from hemorrhaging more units and property owners.
Vacasa refused once again to provide guidance on 2024 year-end earnings, and indicated 2024 would be unprofitable. Vacasa also announced they had drawn down $80 million from a $100 million revolving line of credit.
Vacasa’s cash flow is in deep trouble. Vacasa’s current assets are $354 million vs. current liabilities at $552 million.
With the departure of both Vacasa COO, John Banczek, and Chief Commerce Officer, TJ Clark, the bizarre saga of TurnkeyVR running Vacasa comes to an end.
As I digest the Vacasa news and read the many Direct Messages to me, it appears that the drastic 13% layoff just before Summer Season is a desperate attempt to generate enough cash savings to avoid bankruptcy in Q4 2024.
There appears to be no plan to make Vacasa sustainable, with deep cuts to both the central team and the local teams two weeks before Memorial Day week.
Vacasa is on death’s door unless a cash buyer is found to rescue them. On May 9th the Day of Ascension, it is only fitting we should light a candle for Vacasa.
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