Last Friday, Portland-based vacation rental company Vacasa announced layoffs, reduced employee hours and executive pay, according to a report from Oregon Live.
In early March, Lyric cut 20% of its staff and plan to close nearly 200 units. Vacasa, now, needs to make cuts to stay solvent.
“With rapidly evolving travel restrictions and closures in popular vacation destinations like ski resorts and beaches, we are seeing a significant decline in reservations and revenue,” Vacasa said in a written statement Friday. “To preserve the longevity of our business, we have to make proactive and significant cost adjustments, including staffing changes across the organization.”
Vacasa had raised more than $500 million in funding with over $1 billion valuation. Vacasa acquired Wyndham Vacation Rentals in 2019 for $156M in cash and $10M in equity from Wyndham Destinations, in order to boost supply. Vacasa has managed more than 23,000 vacation homes across 18 countries. The company provides end-to-end professional property management services to homeowners. It lists properties on its own website as well as on third-party websites, including Airbnb, Booking.com, and Expedia. The company has 6,000 employees worldwide, with 400 in its Oregon headquarters.
Vacasa went through a management shake-up in mid-February. Vacasa’s CEO and co-founder Eric Breon relinquished the chief executive role and was replaced by board member, and former CEO of OpenTable, Matt Roberts as interim CEO.
Sonder Expects Lease Clause Protection to Help Weather COVID-19 Crisis
Sonder expects to weather this crisis. A recession-release clause in about 80% of its leases could provide some protection by lowering its costs. “If there is a recession, our lease prices go down,” Francis Davidson, Sonder’s CEO and co-founder told Business Insider.
Sonder is also proceeding with plans to open a 13-story project, 2 Washington, in Manhattan’s financial district in early summer. The property is owned by the Moinian Group, a New York real estate company. This project is part of Sonder’s strategy to enter full-building projects, moving away from leasing individual units in residential buildings.
Hotels and vacation rentals are struggling with a 90% decline in occupancy around the world with companies including Marriott announcing that the furlough of tens of thousands of employees until demand picks up.
Demand is down and if short term rental companies can not rein in costs and have little cash runway, we could get more companies announcing deeper cuts in the upcoming days or potential distressed sales.
photo credit: sonder