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US: Portland-based vacation rental management company Vacasa has announced that it has raised $30 million, with the option for an additional $45 million, amid its ongoing restructuring efforts.
The investment came as part of an initial senior secured convertible notes financing with an affiliate of global investment firm Davidson Kempner Capital Management, and a further $45 million could be issued subject to certain conditions being met.
Furthermore, Davidson Kempner has designated two undisclosed people to Vacasa’s board of directors, adding that two more directors could be added “in certain circumstances”.
The news was announced as Vacasa reported its Q2 financial results, in which the company reported an 18 per cent year-over-year drop in revenue to $249 million and a net loss which more than doubled to $13 million. In addition, quarterly gross booking value dipped 19 per cent on the equivalent quarter in 2023, driven by a 17 per cent decrease in nights sold.
In the first quarter of this year, the firm reported a 12 per cent year-over-year decrease in occupied nights and a seven per cent decrease in gross booking value – representing the fourth consecutive quarter in which the company had seen a drop in bookings. At the same time, Vacasa’s portfolio dipped slightly to around 41,000 homes, down around 1,000 homes on the same time 12 months earlier.
Vacasa carried out its second round of layoffs of the year in May, in which 800 employees – or 13 per cent of the company’s workforce – were made redundant amid a “significant restructuring” of the business. The headcount reduction predominantly affected those in corporate and central operations roles.
Three months earlier, the management company laid off around five per cent of its overall workforce [affecting 320 employees], as it sought to achieve profitability. At the time, the workforce reduction impacted two per cent of Vacasa’s local operations team and six per cent of its central staff, costing the company between $4 million and $5 million across the first two quarters of the year, primarily in employee severance and benefits, plus professional service fees.
Vacasa has undergone four major layoff rounds during Rob Greyber’s tenure as Vacasa CEO, since he joined in August 2022. The firm let go of 280 team members in October 2022, and then an additional 1,300 people [at that time, a 17 per cent workforce reduction] in January of last year.
Vacasa also announced a large-scale, albeit unspecified, number of layoffs at the beginning of the pandemic.
Over the past year, the company has also seen the departures of chief operating officer [COO] John “JB” Banczak, chief financial officer [CFO] Jamie Cohen, chief commercial officer [CCO] Craig Smith, and chief technology officer [CTO] Jeff Flitton.
Greyber previously attributed the redundancies to needing to “eliminate layers of management and optimise spans of control” in order to “build a sustainable, profitable business that delivers value to all our stakeholders”, as well as referring to a “softening demand for domestic, non-urban vacation rentals, as well as increases in the supply of short-term rental units”.
This time around, Vacasa confirmed that it was facing ongoing challenges with softening domestic, non-urban vacation rental demand and increasing supply on the market.
In a letter to shareholders, the company said that it had also “taken significant steps to reorganise and decentralise our operations into locally focused regions”.
Vacasa’s portfolio now stands at just over 40,000 homes in destinations across the United States, Belize, Canada, Costa Rica and Mexico, marking roughly a nine per cent drop in properties in the last 12 months.
In the aftermath of Vacasa’s announcement, the company’s share price dropped to a record low of $2.36 since the company began trading publicly in 2021.
