Matt Roberts, Vacasa CEO, joins Yahoo Finance to discuss the company’s newly released 2020 Best Places to Buy a Vacation Home report.
ALEXIS CHRISTOFOROUS: Travel may have been upended by COVID-19. But the vacation home market is exploding. Vacation rental platform Vacasa is out with its 2020 Best Places to Buy a Vacation Home report. And joining us now for a first on Yahoo Finance is Vacasa's CEO, Matt Roberts. Matt, good to have you on the show.
Before we get to this report, I just want to talk about business for Vacasa right now. I understand you're seeing 35% increase in rental real estate transactions in some markets this year. Why is that?
MATT ROBERTS: That's right. Well, first, thanks for having me on. The same drivers that are making vacation rentals the preferred accommodation are also getting people to think I'd like to actually own a second home that I can use as a vacation getaway. So the same drivers are in play here. And yeah, we're seeing big increases in transactions. And supply is tightening up as well.
BRIAN SOZZI: Matt, you just took over Vacasa in February. What changes have you had to make to the company because of the pandemic?
MATT ROBERTS: Well, it's been a wild ride, for sure. The travel restrictions and the quarantine situation really had the travel start-- stop in total. But then when-- we had thought that there would be a lot of pent-up demand. And boy, was there ever. We just came booming back.
And we're actually at record volumes right now. We're expecting a really good back half of the year as well. So I'm excited that we were able to reinvigorate the business and get charging ahead for the growth that we're expecting throughout the rest of year.
ALEXIS CHRISTOFOROUS: What's happened to some of the prices that renters are able to get for their vacation homes right now? I mean, are you seeing sort of bidding wars for these properties? Are people who are looking to rent able to really get a premium for their residences because people just need a change of scenery or they need to get out of dense cities?
MATT ROBERTS: Yeah, you hit it. I mean, people are really wanting to-- they still want to be in a home. They just don't want to be in their home anymore. They want a change of scenery.
And you couple that with the freedom that people have now to actually work remotely, and then add distance learning for the kids, and it really sets up a good situation for homeowners that are renting out their properties. we're definitely seeing good rates for them, but also, and as importantly, really high occupancy levels as well.
BRIAN SOZZI: Who is the customer here?
MATT ROBERTS: Well, it's really a people that are-- there's partly investors. And there's some people that are looking at a second home as-- this is an eventual retirement for them. But they want it to be a solid investment, too. Not just cover their operating costs, but they're looking forward to saying look, this is also part of an overall investment portfolio for us.
That's why we rank this list by return on investment, and so that we're providing both. This is a great place to be. This is also a solid investment for you.
ALEXIS CHRISTOFOROUS: All right, so let's talk about some of those places that made your list. Top three-- Big Sky, Montana-- lots of space there-- Cape Hetteras, North Carolina, and where I am sitting right now in Poconos, Pennsylvania. So happy to see that made the top three. Why do you think?
MATT ROBERTS: Well, they're all pretty similar in terms of that they have wide open spaces. People are really craving outdoor activities. And all of those really characterize an opportunity for people to just get away, change of scenery, enjoy the great outdoors. They also have great dynamics from an economics perspective-- the opportunity to buy at a reasonable price relative to the income that they can generate.
BRIAN SOZZI: Matt, what are some of the biggest differences you saw in this year's report versus last year?
MATT ROBERTS: One of the interesting things, Brian, is that Florida really had a much more of a dominant position in the list last year. And that's because there was a lot of condos. Beachfront condos are typically a really popular second home vacation rental purchase. But you're seeing more destinations that are dominant more by single-family residences versus condos. And again, that fits with the overall theme that we're seeing in travel preferences.
ALEXIS CHRISTOFOROUS: In terms Vacasa's business, I know that you had-- you had closed on a series, a funding series not long ago. I think it was $108 million, Silver Lake, one of your biggest investors. What are you doing with some of that money? I saw that you recently bought up Vail Resorts, a rental company. Are more purchases like that in the offing?
MATT ROBERTS: Yeah, it was a great opportunity to strengthen our balance sheet. Again, we had conviction that travel would bounce back and that we would be the preferred accommodation source. So we really wanted to set ourselves up for-- continue to invest significantly behind the growth opportunity we have in front of us.
ALEXIS CHRISTOFOROUS: Do you think-- I mean, are you looking at-- I'm sure you are looking at Airbnb looking at filing to go public. Is this something that would be in the future for Vacasa?
MATT ROBERTS: Yeah, possibly. We certainly would consider that. Right now, we're just focused on growing the business and taking advantage of this shift in consumer preferences to the vacation. We really have the hottest product right now. And we're just excited to continue to put those opportunities in front of guests.
ALEXIS CHRISTOFOROUS: Quick follow up for you--
BRIAN SOZZI: At Yahoo Fi--
ALEXIS CHRISTOFOROUS: Sorry, sorry, Brian. Have you seen cancellations rise in areas where the virus starts to pop up again? People have made reservations and then they pull back on those reservations?
MATT ROBERTS: We certainly did in the beginning. We see it less so now. I think people are expecting that there might be some residual effect.
But the truth is until there's really a mandated change, where a city or a county says we're going to stop vacation rentals for a period time or accommodations in a certain area, then people continue to move forward with their reservations.