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‘People really still want to travel:’ Rental company Vacasa on growth despite COVID-19

Yahoo Finance’s Alexis Christoforous and Matt Roberts, Vacasa CEO, discuss vacation rental demand amid the coronavirus pandemic.

Video Transcript

ALEXIS CHRISTOFOROUS: The Coronavirus pandemic may have upended travel around the world, but the home-rental industry continues to bounce back faster than the hotel industry. Joining me now is Matt Roberts, CEO of the vacation rental company, Vacasa. Good to see you again, Matt. You know, we spoke just a few months ago-- it was in August. --and back then, you said you were seeing 35% jump in rental real estate transactions in some markets this year. What is business looking like now?

MATT ROBERTS: Well, it continues to be great. It's amazing the rebound that we've had. We're actually supposed to be in our shoulder season right now, but it's anything but a shoulder season. Our September was up 38% year over year in terms of homes that have been with us for a year, reservation is up 38%. In October it was 31%, and November is looking great as well. You know, it's just a function of people really still want to travel. And we have pretty much the hottest product in the travel sector right now.

ALEXIS CHRISTOFOROUS: You know, I'm a little surprised to hear this only because we're now seeing a spike in coronavirus infections across the country, and, in fact, globally. Have you seen that starting to creep into demand?

MATT ROBERTS: As of this moment-- you know, in everything with this pandemic, you have to stay in the moment somewhat. --the context is no, we have not seen a spike in cancellations. We're certainly keeping an eye on them. Just like in the past if there are new mandated restrictions, we'll continue to follow those. But so far, so good in terms of not seeing a rise in cancellations and continued strong demand. And I think it's really a function of the flexible work schedules that people have right now. They want to be in a home, they just want to be in their home anymore. They want a different view, but they still want to travel. So we have the perfect product for that.

ALEXIS CHRISTOFOROUS: This week, Vacasa had some big news adding two independent board members. One from Zillow, one from Angie's List. Both of these board members have experience taking companies public. So now, of course, people are reading into this, Matt. Is there a timeline for when you hope to take Vacasa to the public market?

MATT ROBERTS: Sure. No timeline, it's clearly an opportunity for us. We're very much focused on continuing to execute against growing the business and fulfilling this new demand. But, you know, we're excited that the business is so strong that it does present a really viable opportunity for us.

ALEXIS CHRISTOFOROUS: Of course, Airbnb, I don't need to tell you, going to be going public in the coming weeks. Are you sort of watching and seeing that as a litmus test, perhaps, for your own company?

MATT ROBERTS: I wouldn't say that I'd call it a litmus test. I fully expect that Airbnb will have a very positive reception because, just like us, we really have the hottest product in the travel category right now. It really is the right product for the time, so I'd expect that they have a very strong reception in the public market.

ALEXIS CHRISTOFOROUS: Look, I know you're a private company, founded in 2009, but can you give us a feel for the health of the financials? I know that you raised over $100 million over the summer with one of your largest investors, the private equity firm Silver Lake. You have some big names backing the company. What does the balance sheet look like, and is this a profitable business yet?

MATT ROBERTS: Yeah, so you're right. We're a private company, so we don't need to share financial datas quite yet. So we're taking advantage of that. But, we have a very strong balance sheet. Certainly, the rebound and the boom in our sector right now has only contributed extra strength to that balance sheet, and allowing us to invest in our future growth.

ALEXIS CHRISTOFOROUS: Can you share with us some of the hottest places people are looking? I know in August, you were talking about the hottest sort of vacation rental places, one of them was the Poconos in Pennsylvania. But what are you seeing now?

MATT ROBERTS: I think you were vacationing there at the time, actually.

ALEXIS CHRISTOFOROUS: Well, I'm here in New York City now, but I was at the time. So I was like, oh look, the Poconos is on this list.

[LAUGHING]

MATT ROBERTS: Hey, hey. We're seeing, really as you would expect, sort of warmer destinations. Opportunity for people to, not only take vacations, but take longer vacations because of that flexible schedule. And so as we look to the fall, as I mentioned, we're not seeing a slowdown at all. We're seeing it continue to be robust demand. You know, if you look to the ski markets though, there you're seeing some challenges right now because people are taking a wait-and-see attitude with the ski operators themselves not really opening up the markets yet. But we're confident once they start to sell tickets and people have some clarity about how things are shaping up, that we'll start to see bookings materialize in those key markets as well.

ALEXIS CHRISTOFOROUS: Matt, in your space, what do you see as one of the big headwinds as you head into the new year? Is it the virus and how we're able to wrap our hands around it?

MATT ROBERTS: Well, sure. I mean, we still are in the travel sector, and in broadly speaking, if there's significant increases in mandated stay-at-home orders, et cetera, we'll feel it just like any other part of the travel industry will feel it too. So, I absolutely have to put that at the top of the list of sort of existential risks to the business.