Technology is quickly becoming the great differentiator in the crowded vacation rental home market. “We’re a tech company at our core,” says Cliff Johnson, co-founder of the full service vacation rental company Vacasa. “Without our proprietary technology, we couldn’t scale our business the way that we are.”
The Portland, Oregon–based startup says its dynamic pricing system guarantees homeowners they’ll make more money with Vacasa than any other platform, including Airbnb.
Johnson explains that Vacasa’s newly revamped pricing software considers hundreds of real-time data points for its 5,200 rental properties in 17 US states and 10 countries including Italy, Spain, France, Chile, Costa Rica and Belize, with plans to enter South Africa.
Vacasa looks at factors such as location, home size, and market rates, as well as local events, like wine or film festivals, that can trigger demand for a particular property.
The pricing model is designed to boost income for homeowners, but Johnson says it can also help renters. Typically, vacation rentals, such as hotels, are priced based on the season. But Vacasa argues that even within those seasons, rates can and should fluctuate.
For instance, a weekend in Maine in August could be less expensive than Labor Day weekend, which can create a good deal for renters. In turn, it offers homeowners the most accurate market rate.
Owners set a minimum rental rate and leave the pricing to Vacasa. For a 35% commission, Vacasa will also list and book the property, clean and maintain it, and correspond with guests. For an extra fee, it offers renters’ insurance through a partnership with Assurant.
Vacasa has grown from just two employees in 2009 to nearly 1,400 today. Johnson says growth has nearly doubled year over year, but as the company matures, he predicts growth of between 60-70% over the next few years.
With the global vacation rental market expected to reach about $170 billion by 2019, there’s a lot at stake.
Airbnb is the clear market leader, however. By 2021, eMarketer predicts Airbnb will nearly double its US user base to 60.8 million adults, at which point growth is expected to slow to single digits.
Vacasa hopes to grab a piece of that growth. Instead of viewing Airbnb as a competitor, it considers the platform a partner. Vacation rentals managed by Vacasa also appear on Airbnb.com, Booking.com, Homeaway and VRBO.
“We list our properties on these various platforms to get in front of as many people as we can in different categories and to provide the best value possible for homeowners,” says Johnson.