Vacasa - Q1 2022

Transcript

Speaker 0

Good afternoon, ladies and gentlemen, and welcome to the Vaca First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen only mode and please be advised that this call is being recorded. After the speakers' prepared remarks, there will be a question and answer session.

Speaker 1

2022 Earnings Call. I'm pleased to be joined today by CEO, Matt Roberts and CFO, Jamie Peller. And redistribution of this broadcast is prohibited. We have posted a shareholder letter and press release on the IR section of our website at investors. Vacasa.com that will be referenced by our speakers.

Comments made during this conference call and in our shareholder letter beliefs, plans, projections, strategies, targets, estimates, objectives, events, conditions and financial performance. And Shareholder Letter we issued earlier today in the forward looking statements and risk factors section in our filings with the SEC. And results, including a reconciliation of non GAAP results to the most directly comparable GAAP financial measures, may be found in our press release and shareholder letter.

Speaker 2

100 of 1,000,000 of dollars in rental income. The team is executing against our goal of reinventing the vacation rental industry by leveraging proprietary purpose built technology that improves all aspects of the vacation rental experience for guests, homeowners, our internal team and our channel partners. There has been an undeniable shift in travel and preferences towards alternative accommodations over the past decade, which has only accelerated in recent years. The supply of available vacation rental nights is constrained relative to demand. As the only scaled vacation rental management platform in North America, we are strategically positioned to create and distribute the largest supply of available nights to travelers through our own channels and distribution partners.

A full service end to end property management solution that makes it simple to turn their second home into a vacation rental home that are designed to provide an exceptional experience for homeowners and guests and drive efficiencies throughout our business. And we have an enormous opportunity ahead of us, managing less than 1% of the more than 5,000,000 vacation homes in the United States. Which helped drive further efficiencies in our business or create a better experience for our homeowners and guests. We can also invest further in sales and marketing, which helps us bring more homes to our platform. Sign up individual homeowners and the portfolio approach is where we buy local vacation rental managers, bringing on dozens of homes at once.

The individual approach performed extremely well during the Q1. To growth engine humming, we are focused on hiring additional sales representatives throughout the rest of the year and are already pacing ahead of our aggressive hiring goals. We are also driving growth by optimizing the existing inventory of homes on our platform. For example, we are optimizing our base for extended stay reservations. The recent shifts in the way people live, work and vacation has potentially increased demand for reservations that exceed 30 days.

While this trend may not be as pronounced in our vacation rental destination markets, we are hard at work enabling extended stay reservations technology to support these reservations. Our proprietary yield management system and pricing algorithms give us the opportunity to tactically apply this offering in a way that generates incremental income for homeowners.

Speaker 0

Thank you, Ms. Cohen. Ladies and gentlemen, at this time, if you have any questions, We go first this afternoon to Doug Anmuth at JPMorgan. Sustainability, how you're thinking about that going forward? A lot of strong summer travel demand, of course, but macro

Speaker 3

And that 23% increase in GBV per night sold. So we're seeing great momentum in the business. We put this new inter quarter forecast 14, 15 days left in the month, which is pretty unusual. So unfortunately with this new process, there was just a few issues that led to us overstating that $280,000,000 to $290,000,000 guide are pacing the same as where we were last year relative to where we ended up

Speaker 4

Great. Thanks for taking the questions. Maybe just to start, you guys mentioned that the industry in your shareholder letter that the industry Square that with some of the commentary in your release and the guidance about how you expect, I think, gross bookings per home to take a step back a little bit, albeit off record levels. But What all that means for you guys bringing on supply?

Speaker 2

Sure. I'll take that one. So we remain confident that we'll grow the supply of is home sold or selling. So to the extent that that actually slows down that pace of play on that, that's actually more of a net feature than a bug for us. So overall, we feel and remain very confident in that 30% growth year over year.

And I think on the margin, interest rates increasing relative to the pace of play of homes sold in the vacation market is probably a feature as I mentioned.

Speaker 4

Understood. Thanks for taking the questions.

Speaker 1

Sure.

Speaker 0

Thank you. We go next now to Mike Grondahl at Morrisland Securities.

Speaker 5

Yes, thanks guys. Hey, roughly how many sales reps do you have today

Speaker 3

to hire a lot.

Speaker 2

Yes. I mean the only thing I would add is that with a super high LTV to CAC, 4 to 5 times LTV to CAC on our individual channel. The sales team Pretty much as an open to hire any salespeople, the ROI on any given sales new salesperson is super high. So That is really just being balanced with where it makes sense to add people. As Jamie mentioned, it's very much a market by market, city by city basis decision that the sales leadership team needs to make, but the economics are super compelling for it.

Speaker 5

Got it. And then maybe just quick, any markets that really over performed and then maybe a couple of markets that you describe as

Speaker 2

We'll have a variety of performance levels, but the sum of the parts is really doing great. Well, I would say though, almost every market is just is benefiting from this Market shift or this preference shift from consumers to vacation rentals. There are a number of up and coming markets for sure, But the overall picture is just underneath the umbrella of a consumer preference shift towards vacation rentals. Sure. Why don't we start with just the macroeconomic environment and how that our belief is how that will impact vacation rentals.

Obviously, we have inflation that's in the news all the time now. And so specifically on inflation, so there's talk about that And then also just point out that the breadth of our options across all of our destinations, we really do have a value to luxury selection. So we have these homes across a variety of price points to accommodate a wider range of consumer preferences. And we're not seeing the inflation, the current inflation environment impact our bookings and the strength items that you mentioned. Every single day, we roll out a ton of new features and enhancements to existing products and then We're working on more larger projects behind the scenes too.

So we'll update you on that next quarter.

Speaker 1

Could you talk about just the steps needed to bring something like that to market and how you think about incrementality? Thank you.

Speaker 2

Sure. On the portfolio side of the equation, remember that the portfolio is a minority of our It's really actually not what we're experiencing at any significant amount. Of course, there's going to be some people that look to come in and purchase And that's actually been the case and it will continue to be the case for us. But there's still thousands, I mean, thousands of property managers that meet our criteria to our business.

Speaker 1

Great. And extended today?

Speaker 2

Great. I knew there was a second part. Sorry about that. Thanks, Justin. So from an extended stay perspective, we mentioned it because As a scaled platform business, we really have this unique opportunity to grow the business by obviously Adding properties, we talked about that.

We talked about the strength in our sales that we're experiencing. But we also can optimize the existing base of or a merge for our homeowners. Our objective is to make homeowners the most amount of money possible. And in order to do that, you need to be able to take as much volume of demand for each homeowner as possible. Some of that demand is potentially going to be in the form of these extended day reservations.

So this is just about us doing our job, which is optimize our base in order to accept those reservations

Speaker 0

We go next now to Jed Kelly at Oppenheimer. And Mr. Oppenheimer, your line is open.

Speaker 1

Thank you. Yes, this is

Speaker 2

Yes. So the first one, Jed, the boilerplate on about Bokassa at the bottom is just that and really just meant it says more than 35 35,000 plus properties. And the actual number at the end of the year was, as we discussed, 37,000. That's just a boilerplate over 35,000 versus the actual number at the end of the year was 37,000, which is over 35,000. And as far as and Jamie, do you want to do the other one?

Speaker 3

Yes, I can take the bookings. So I'll point out, our peak season bookings are pacing Extremely well. We're looking really strong there. As we look into Q4, it's obviously much further out, so we don't have as much

Speaker 1

With your portfolio approach, how are valuations trending? Are you seeing some larger owners potentially a recession. Can you just talk about the valuations and how they're trending in your portfolio approach? Thank you.

Speaker 2

Sure. Well, everyone Property managers as part of our portfolio approaches is really important and we get to understand what is their objectives, what are they trying to accomplish, How much longer do they want to do it? A lot of these are family businesses or small businesses. And the reasons for them to decide to sell or not sell, Big variety of reasons there. Some folks may say, look, this is the perfect time.

Some people will say, well, no, I want to hold on for a little bit longer. But we are really good given the fact that we've done it 200 times and that's probably 10x as much as anybody else in the industry Great fit for many, many owners that are out there. So we remain very, very bullish on this as one of our 2

Speaker 1

Thank you. Welcome.

Speaker 2

As we prepare for our peak summer season, I just want to take a minute and thank all of our employees across the organization that serve our tens of thousands of homeowners and millions of guests day in and day out. Also would love to thank our homeowners for trusting us