Casago bought Vacasa last year for less than $100 million. Not bad for a company that had been valued at $4.5 billion just a few years earlier.
The big question post-acquisition was what would happen to its sprawling network of local operations.
Now we have a clearer answer.
Casago has sold nearly all of Vacasa’s former property management businesses to local operators, converting many into Casago franchises. More than 31,000 vacation rentals have already been transferred, with 89% of Vacasa’s former field staff hired by the new operators.
We are seeing that shift in Hawaiʻi as well, although the exact structure is still unclear. An owner letter we reviewed, sent in connection with a Kauaʻi property, said Vacasa’s local management business had been transferred to Hawaii Exclusive Management LLC, doing business as Heavenly Vacations, a Casago franchise partner. We reached out to Vacasa, Casago, and Heavenly Vacations for clarification but did not hear back, so it remains unclear whether one operator is handling the entire state or whether Casago is using separate franchisees by island.
The model is simple enough. Local operators handle the messy, expensive work: owner relationships, guest service, housekeeping coordination, maintenance, staffing, and everything else that happens on the ground. In return for a franchise fee, Casago provides the brand, technology, marketing, booking infrastructure, and operational support.
The real question is whether economics work. A hotel management company may earn 3% to 5% of revenue, but the hotel owner pays the operating expenses. Vacation rental managers typically keep a much larger commission, often around 30%, but that is not profit. It has to fund the entire local operation.
If a slice of that commission now goes to Casago as a franchise fee, the local franchisee will need enough scale and efficiency to make the math work.
Hotel franchising has proven wildly successful. Whether the same model works in vacation rentals, where the operator’s margin has to cover so much more, is this an industry game changer or another business model not ready for prime time?
