Turbulent Hawaii vacation rental news as Vacasa plummets

First of all, if you don’t know the Vacasa name in terms of Hawaii vacation rentals, you should. They are one of the largest vacation rental managers/providers in Hawaii, with an inventory of nearly 1,200 Hawaii homes and condos.

This week, shares of the recent stock market darling vacation rental fell 48%”weak sales and cost overruns.“In total, it is down more than 80% over the past year. What does this mean for the Hawaii vacation rental industry, Vacasa, and more importantly, for you? Let’s talk about Vacasa, then back to the wider implications.

How Vacasa is different from Airbnb and Vrbo.

While Airbnb is the household name for vacation rentals in Hawaii, Vacasa asserted its claim here on a slightly different premise. Unlike Vrbo or Airbnb, Vacasa is a full-service property management company that also lists its inventory for rent. These other companies (Vrbo and Airbnb) do not provide management, leaving this to private or professional managers. Vacasa, on the other hand, sets up local teams responsible for a myriad of things, including check-in/check-out, cleaning, customer service, and repairs.

Vacasa charges around 30% for its combined listing and property management services. The concept worked, otherwise they wouldn’t have amassed so many Hawaii rentals in their pool over the past few years.

Vacasa went public last year with the potential for exponential growth.

Many Hawaii vacation rentals on Airbnb and other websites are managed by Vacasa. It offers up to 100 booking sites on which the properties it manages can be found.

Vacasa’s stock first fell during the stock market decline and then again on its own merits this week.

And now there seems to be significant doubt as to whether Vacasa can achieve its desired goals. That’s based on earnings falling short of expectations and, more importantly, indications he gave that momentum may be waning as the company faltered in third-quarter earnings. So despite selling more rental nights and with higher rates, they ran into much higher costs than expected, resulting in adjusted profits that were much lower than they had expected (46M $ versus $55 – $60 million).

What does this mean for Hawaii visitors who prefer vacation rentals?

1. Expect greater availability from now on for vacation rentals in Hawaii.

2. Price increases should stop and vacation rental costs should moderate in the future.

3. The promotional periods should reappear for the winter, spring and autumn off-peak seasons.

What’s next in the Hawaii vacation rental industry?

Vacasa also said gross bookings per rental may decline due to a weaker than expected economic environment. This is based on consumers traveling and/or spending less on future vacations (to Hawaii). And therein lies the big news in terms of Hawaii vacation rentals. As with Vacasa, this will likely go for the Hawaii vacation rental industry.

Lily Hawaii vacation rentals are no longer the “cheap” alternative.

What does the State’s September vacation rental report say?

Interestingly, the number of Hawaii vacation rentals on the market has dropped significantly since 2019, an average of 27%. The state report for September has already shown lower occupancy rates, even with fewer available units available. But at the same time, above all, considerable rate hikes have remained (at least for now).

There was a statewide average occupancy rate of just 59%, down more than 9% from the pre-Covid period. The average daily rate was $283, up 46% from 2019.

With huge rate increases and an upcoming reduction in demand, visitors are likely to see better days ahead for vacation rentals.

Maui vacation rentals.

Maui, which has the most vacation rentals, had an average rate of $333, +46% from 2019, and 64% occupancy, -8% from 2019.

Vacation rental in Honolulu.

Vacation rentals in Honolulu had an average rate of $214, +34% from 2019, and 61% occupancy, -12% from 2019.

Vacation rentals on the Big Island.

Big Island vacation rentals had an average rate of $225, +54% from 2019, and 50% occupancy, -8% from 2019.

Vacation Rentals in Kauai.

Kauai vacation rentals had an average rate of $377, +56% from 2019, and 59% occupancy, -7% from 2019.

hawaii-vacation-rental-performance-2022-09