Heads In Beds Show - If We Did It, Here's How: Our Thoughts On The Casago & Vacasa Merger

Episode Date: March 12, 2025

In this episode, Paul and Conrad cover the unfolding situation surrounding the potential acquisition of Vacasa, discussing the initial bid by Casago and the subsequent unsolicited bid from Davidson Kempner Capital Management. They delve into the potential motivations behind these moves and the broader implications for the vacation rental industry. Paul and Conrad share their speculative insights on how they would approach the Vacasa situation if they were advisors.Enjoy!⭐️ Links & Show NotesPaul Manzey Conrad O'ConnellConrad's Book: Mastering Vacation Rental MarketingConrad's Course: Mastering Vacation Rental Marketing 101🔗 Connect With BuildUp BookingsWebsiteFacebook PageInstagram🚀 About BuildUp BookingsBuildUp Bookings is a team of creative, problem solvers made to drive you more traffic, direct bookings and results for your accommodations brand. Reach out to us for help on search, social and email marketing for your vacation rental brand.

Welcome to the Heads and Meds show presented by BuildUp Bookings. We teach you how to get more vacation properties, earn more revenue per property, master marketing, and increase your occupancy. Take your vacation rental marketing game to the next level by listening in. I'm your co-host Conrad. I'm your co-host Paul. What And I'm your co-host Paul. What is going on Paul? How are things hanging? Oh, you know, we're just having another lovely, wonderful, mother nature drunken mess. Anybody who saw my LinkedIn, they saw we went from 50 degrees on Monday. Wednesday we had 11 inches of snow. That's yesterday. And I am feeling it right now. I told you it's like I went out and played a marathon

golf day. Muscles I didn't really remember that I had. I engaged yesterday in ways that I wish I really hadn't. But fun part is that Sunday, I think our temperature is supposed to be 54. Monday is supposed to be 58. So my backyard, which was almost dry pre snow, oh, she's going to turn into a dog swimming pool here pretty quick. So that's my update. How are you doing, sir? How are things going in your neck of the woods? Obviously much better. We've got the wind, but no, no other, um, you know, symptoms at the moment. So yeah, swinging, swinging the sticks the other day, but no other symptoms at the moment. So yeah, swinging the sticks the other day, first time out actually on the course in quite

some time, three months at least. And I hit a driver 320 on one hole and 240 on the next hole into the wind with the down wind. So there you go. And I hit the one good that I had 240, honestly. Just straight into the wind, just kills the carry distance. So we've had some severe wind here, which is kind of not super uncommon for us,

but a little bit strange. The wind brings change to the weather. You know what's just changing? This whole Picasso, oh, that's interesting. There we would come out and slip there. All right, Casago, Picasso merger. So we haven't commented on this, at least not publicly. And we came up with this idea a while ago.

So here's the disclaimer. We're recording this, it's Thursday, March 6th. We'll just say that. Obviously, it'll come out a little bit later. And things are rapidly changing. And initially we didn't record this because we, first of all, we know people involved and we want to be respectful of them.

We hope the best. We hope this works out for everybody. But we also just are curious. We're curious because this is a big thing. This is big news that is happening in our space. And the problem is that shifting every day. So we are recording this, something may change on Monday or Tuesday.

We're like, we take this deal with the David, um, the Kemper Kemper, whatever the name of this company that could, that could happen. And then we look stupid for releasing this, but whatever, we're going to go with it. Let's see what happens. This is our take on more casual conversation, but this is our take on kind of how we would handle the saga of a cost of merger if we were asked to give our advice, which we were not to be clear, but if we were things that I would like, I want to think about.

Um, so, I mean, again, we've not talked about this publicly, privately, we've talked about this like nonstop, but like, the listener give them maybe a little context that they haven't caught this or they don't know what the current status of it is. What's kind of your read on this as someone who's kind of following the news a little bit on this whole deal? Yeah, if we have to go all the way back, it is it's that Casago made a bid to finally take over Vecasa and I think it is, you know, we assume probably try to put some of these into a franchise model of some kind. What had happened? Oh, maybe three weeks ago, three weeks

ago, I guess we might be approaching a month is the Kemper Davis Davis Kemper. We should probably get this right. If we're gonna comment on it. Kemper Davis Davis, I think it's Davidson Kemper, we should probably get this right if we're gonna comment on it. This is this is get that accurate Davidson Kempner Kempner Capital Management is the official name of the company. So yeah, they have $36 billion, according to their Wikipedia page. So that is

in the private equity world or capital market world. I think that's not much money. But in my world, that's a shit ton of money. So there you go. That's what I was gonna say. We'll take that one. Now the there's there's some nuance there where they do have some members on the board right now. They were the ones who had objected to some of the initial to the initial Casago bid. And then Davis Kemper kind of gave an unsolicited bid a little higher price, a little more appealing maybe to some. I really don't think anybody they ever voted on it. I don't believe the board ever ended up voting on that because there were there are still some objections and about Friday before we're recording here

so end of February I believe early March. The it would appear that Davis Davidson Kempner really sweetened the offer. Really making it more cash forward making it a quicker transaction. I think you know what they said in the most recent press release was that they could close the deal in a week. They have the cash ready to go. They have- More than enough. They got $36 billion. That's what I was gonna say. They've got a lot that would,

as an outsider looking in, may seem to be something that would be appealing. Again, I think a lot of this hinges on, and a lot of this discussion today is gonna hinge on, what is the long-term concept of a Casa? Or because what has happened, what has worked or what has not worked, you know, what is the best solution for a Casa,

for whatever that looks like for Casago, for a Casa, for the greater vacation rental industry. And I think that that's something that until we really know just what's going to happen, I think there's just a lot of, we'll say balls flying in the air right now because I don't think there's a lot of M&A happening right now in our space, you know, kind of some small acquisitions here and there. But this is kind of the, I'm not going to say the last chapter of what was an arms race kind of between Vakasa and Vtrips and some other players for a little while there. But this does this, this really, it

certainly ends the chapter of Vakasa as we know it right now, one way or another. I mean, even if they continue moving forward with Davidson Kempner, it's not the same. It's not the same. So or it's Casago moving forward or it's what Picasso, Chicago, whatever that is. Um, but yeah, I think that's kind as much as we can go into more details. But I think that's the high level thousand foot view here where if you haven't caught up, and that's that's hopefully the catch up. That's our, our little cold open there to get everybody caught up here. So I mean, did I miss anything? Are

there anything there that you would you that you want to add make sure that we've got the context? No, I think I think you've got it right. I think if I could bullet point that or, you know, explain like I'm five version of it, it would be they're going to get bought private and a company is going to take them off of the public markets and then run them in presumably a much more profitable, focused way or profitability focused way, not in the way that maybe they were running certainly during the growth period, and kind of not the way they're running now where they're not really taking too much care and profitability. So that's one side of the coin that seems plausible, but perhaps less likely given what we know at the moment, at least again, that can all change in a moment's notice. And then yeah, you've got option B, which is basically it's going to get split apart. This is again, our understanding from third party sources. I've no detailed, detailed knowledge of inside this, but this is a reasonable assumption of what's going

to happen. It's basically going to be something to the effect from my understanding of, um, you are going to be, uh, offered like the ability to take over a market, a former Vacaasa market in under the Casago flag. So that's kind of my understanding. So it'd be like, all right, Paul, do you want to be Casago, you know, Minnesota, and we're going to sell you all of Casago, Minnesota, or maybe they have market lines to find, you know, that's how most franchise agreements work, you have some agreeable definition of what the actual locations are. Obviously, that makes a lot of sense here in this market, there's a definition of locations, what is actually considered the outer banks,

what is actually considered Myrtle Beach, that's all probably been defined, then you'd be able to buy that from that particular company, or by the contracts, if there already is a company in that market that has the Kusago flag, I think this is this makes sense to me, this is, again, I have no knowledge of this, but it makes sense to me that you'd be able to be like, Oh, I want to get that inventory in my program, if the deal would actually go through. So I think there is, for example, I don't work with the person, but I know there is a Kago in Myrtle Beach. I don't know that people behind it, but in theory, my understanding is there's also a Fecasa inventory here in the Myrtle Beach area.

Perhaps they could then acquire that inventory and bring it under their program, perhaps as a way to grow their business faster, which could be amazing potentially for people who are already owners of a Casago franchise in a market where there's a lot of a Casas inventory. Imagine their business could double or triple overnight, which is an amazing opportunity, also is a bit like playing with a grenade with the pin pulled

out from an operational standpoint, obviously, you know, which maybe it sounds like fun initially, and then, you know, boom, your hands gone, then it's not so fun after that. So that's obviously a natural cause for almost a concern, but just like a natural thing to be like, how much can I actually take on? Can I actually, you know, bite off this much and chew this much in a logical way? So those are those Can I actually, you know, bite off this much and chew this much in a logical way? So those are, those are things that, you know, kind of secondhand and stuff like that. But again, the core of today's episode is like, what would we do? So like if we were in charge or if we, if we had a voice at the table a little bit

and we're revising some of these people that we know and that we like, um, what would kind of be some of the things that we would talk about? So, um, I'll go first. Maybe we'll kind of just trade some different ideas here and we'll, we'll see where it takes us again. This was more casual, just kind of a fun conversation. Cause yeah, like I said, news like this doesn't happen very often. So it's kind of just trade some different ideas here and we'll see where it takes us. Again, this was more casual, just kind of a fun conversation. Cause yeah, like I said, news like this doesn't happen very often. So it's kind of a interesting thing. So I think the first thing to think about is that

if the Casago model is going to end up working to the best level of effectiveness in the longterm, the Casago brand needs to be more elevated. And it needs to be something that people actually respond to and have a positive interaction with. So the analogy that Paul and I have done a lot offline, I'll say it here for the recording, is this idea that if I open a McDonald's franchise

in a location where there is not a McDonald's, let's say in a nearby area, tomorrow, I believe that I wouldn't actually have to do that much marketing, sales, and advertising to make that franchise some level of success. Because McDonald's, the franchise, Kings, if you will, Queens, if you will, has so much brand awareness associated with it that just by opening it and people seeing the golden arches, I mean,

that's not really a thing anymore, but seeing the gray box, you know, on the outside of the McDonald's, it creates its own demand. People just know what it is. They don't need to be told what it is. The brand awareness is already there. So when I see it, I go, Oh, of course, it's McDonald's. I'm hungry. I want a chicken sandwich. I'm gonna go in there. The quality of the food's gonna be, eh, but I know what I'm gonna get. And you know, it's gonna be $5, you know, so we're in our space. And I don't think this does exist. Despite the now we're in the bubble. So we can't look at our own lens and go, of course, I know who runs Casago. Of course, I know who runs these different franchises. If we go outside of our bubble, our little industry bubble, and we and we stopped,

this is the this is the thing that I said to Paul previously, if we stopped 100 random people on the street, and we said, Have you ever heard of Vakasa, Airbnb, and Casago? I think the numbers would be virtually the same for Vakasa and Casago, although I imagine it might be a little bit higher for Akasa, bigger company. Airbnb would be very high. I think it'd be 80, 90% of people would have said,

oh yeah, I've heard of Airbnb. I've stayed in Airbnb before and so on and so forth. And I think I'd be shocked if there was more than five people that said, 100 random people you stop, I've heard of Akasa or I've heard of Casaka, right? Yeah. So they don't have, you know, that brand awareness. I'm certainly not nationally. I was actually, this was the topic of the conversation I told you I was having earlier today with someone, which will come out in the other podcast feed I do. And we asked that individual, we said, how about someone tries to get it done

regionally first, before trying to take over the entire, you know, 48 states, Canada, US states, can we get someone to like, just get the Carolinas nailed down or just get Florida nailed down? Like, what if what if it was just like, all right, we're gonna put 100% of our focus effort and energy into being the best property management company in Florida, which is like 10 amazing markets, by the way, two of which are some of the largest in the entire US and Orlando and

destined kind of like 30 a markets Panama City Beach, if you want to include that into kind of that, that panhandle area, let's try to get those things nailed down. But like, let's try to get one state or one region nailed down before we even think about, oh, we're going to have stuff in Florida and Arizona and Massachusetts and California and Oregon, all this stuff. So I think that's an interesting positioning as well. Like, can we at least get something you know, bigger than a, you know, it's like we go from, you know, eating a four ounce steak to eating an entire elephant with this Vaca idea, at least as far as the national management model goes. And like it didn't work. And we

get we get to speculate why that is. But I feel like that's another problem set here, which is just biting off more than we can chew. So a few ideas there. But I think the core one to come back to sorry, is this idea that Casago needs to, and or any whether however it on it continues on whether it's as Vaca says, we know it today, roughly, or the new version of Casago, that brand needs to figure out a way to actually generate some level of brand awareness so that they can generate bookings that generate demand without the need for doing expensive marketing, advertising and brand awareness stuff. What's your thoughts on that? franchise models in our space right now. There is no defining factor. There may be some small USPs, but there's no defining factor that separates a Casago from a Cassiola from a V-Trips from a Skyrun from an iTrippinese. They're all great brands. I mean, it is. They all have their benefits. They'll have probably some opportunities to improve as well, but there's nothing there.

And I think that's something where when we compared it to our discussion of really the hotel model and having those franchises a little more clear and clearly defined what the expectations are, we don't have that. And I think it did seem like, I mean, I can remember on the connected TV side of things, I remember seeing Vakasa ads and I don't know how much they were doing there to kind of increase that brand awareness, but they were making some attempts and I would assume they were targeting specific DMA regions or cities or zip codes or whatever that was. But that is certainly the play because it is.

Casago is going to run into the same issues that Acasah has, that Asandr Hemiwede has. Go down the list. We know that there are different business models as well, but truly what does still allow the hotels and the traditional accommodation and traditional lodging providers is that that equity is built in. We're still trying to grow all this and then we've been growing it at hyper speed in very small units. That's why everybody knows Airbnb because they were able to do it at scale. They were able to do it at mass.

I still think had VRBO, remained VRBO instead of Verbo, they might have that same type of pull where I don't think it necessarily would have been everything's in Airbnb. I think you would have, I mean, I remember having the conversation back in 2014, 2015. These are not vacation rental by owners, but that's what everybody knows them as. I mean, they're still run by property managers there. So that's the

initial positioning is, yes, Casago has to somehow be able to position themselves as the leader in the space in a way that Picasso was not able to do that. Because with Picasso, was size. You know, it's all about that volume. And we still see that with some of the remaining properties that they have. So you're definitely hitting one of the most critical parts of their success is how can they stand above the rest or how can they supersede what is already there? And I think the concept of breaking it down into markets and doing stuff like that, really owning those markets, I think that's how Casago really built and developed themselves early on is they really did try to go down to that local

level. Steve is a really big advocate of being a local in all of your markets there. So I think that that's good. But now how do you bubble that up to that next level? And because nobody's been able to do it that effectively, yeah, I'm really interested to see in what they are, what they're able to do or what strategy they have in mind. Because again, you're not thinking about this in the short segments, you have to have that growth strategy in place. So as hopefully this news rolls out as deals are consummated

and things like that, we're gonna see what the roadmap is, what the trajectory is, because it's still at time of recording 32, 31 thousand ish or 33 thousand. There's still a lot of rentals out there. So it's going to be a massive change, a massive shift. What does that entail for this new brand, this new entity that is going to be starting kind of from from stage one again? So it'd be really interesting to understand the calculus on the Davidson Kemper side of things where again, this is our

assumption that one would assume they're buying this company and going, hey, we can turn around, we can fix it. And I'm assuming what they're gonna do is cut all the unprofitable stuff along the way. You know, this idea that, you know, Vakasa, yes, they've done all these things well, they've done all these things poorly. I guess this brings me back to something that Amy Hino did a while ago, which I probably should refresh

at this point. Maybe we could try to figure out a way to refresh this on a future episode, which is all the areas that someone needs to focus on in their vacation rental business. And it is diverse, right? There's so many different things that a someone needs to focus on in their vacation rental business. And it is diverse, right? There's so many different things that a company needs to focus on.

Just to run a 25 unit company well, the diversity of different topics that you have to be skilled in is at times kind of mind blowing, right? Like you have to understand all these different things. And it's kind of like, I think Amy at the time had broken down like 70 discrete different, you know, business techniques or strategies

or tactics or channels. I don't even know what you would call them. like 70 different things you need to do well to run a company, you know, a small vacation on company well, including things like taxes and accounting and issuing all that paperwork, including things like regulation compliance, and then including things like we know like marketing, like doing all the marketing things well, but even within marketing, that's a broad scope. Even you know, my company, I always say this to people now, within my company, I'm the marketing person, and we own this agency, and when people on my team are better at individual things than I am, my writing person is better than I am at writing, my company, I always say this to people now, within my company, I'm the marketing person, and we own this agency. And when people on my team are better at individual things than

I am, my writing person is better than I am at writing. My social media manager is better than I am at social media. So like even within our own company, where we specialize in a specific thing, we've broken it down further, and we have individual people or small teams that focus on one specific thing and do it well. So again, imagine that across 70 to 80 different things in your vacational business, what I'm getting out of here is the cost

has obviously done many of those things well. And I think it's foolish to say that they have not done a lot of those things well, because they've grown a lot and they continue ironically, it's kind of strange because as you know, I do the inventory tracker on my website, they are still signing homes that are reasonably fast clip. Now they're losing more than they're signing their their net losses that they're but if a cost has never not been skilled at signing inventory, they've never not been skilled at when they were buying companies. We could argue whether

it was sufficient or not from a dollar and cents perspective, from a capital perspective, but they convinced people to sell their companies and give them hundreds of contracts at a time, and at least try to run them. They didn't end up running them well, but they had a lot of the right piece in place. What I think what the problem with costa was, if we went back and broke it down, is of those 70 areas, they were probably good at 30 of them or 40 of them. And then the problem is, it's kind of like this idea we talked about on the last episode, it's

a chain that goes from link to link to link to link to link, right. And if a few of those links are weak, you're probably okay, hopefully, the whole thing doesn't fall apart. But if 20 of the 50 chains in that link are weak, and you start pulling on it, things just completely rip apart and fall apart, right? So it's like, and like, again, we've given Vakasa credit on the marketing side before, obviously, there's been a lot of complaints and feedback about like how they handle that property management layer, like the owner relationship layer is probably the most read about thing that I hear about with Kasa, along with things like pricing, like those two things seem to always stick out

to me. So it's like, let's say they were not great at like having one person assigned to your account who's dealing with your property, who you have a relationship with over a long period of time. That's what a lot of small boutique property managers do quite well. It's like, hey, we got XYZ person, XYZ person has been here for five years.

She deals with all of our owners. She is here to help any questions, feedback, comments, concern, she's there, she's there for you. And she's gonna be here for long-term. That is a much more good feeling, but ultimately what matters is the performance, but like that's a better feeling than, oh, it's there for you. And she's gonna be here for longterm. That is a much more good feeling, but ultimately what matters is the performance. But like, that's a better feeling than,

oh, it's got Paul this quarter, and then, oh yeah, he left now, so now I got Mark over here. Oh yeah, Mark left, sorry. We got Amy coming in, don't worry, Amy's gonna take care of you. And you're just like, what the heck is going on here, right? Like, churn always feels like a bad thing,

employee-wise, when you're dealing with that type of company. So if there's like, again, if there's a lot of things they've done well, there's also a lot of things they've done poorly. And that was obviously the downfall because they can't, they can't, you can't afford that. You can't afford to be like mediocre at 10 or 15 things and then get up there and say, we're the best, we're the biggest, we do such a good job. Because that leads to this almost like cognitive dissonance that people have with the brand association and going back to the franchise thing, I'll kind of say the same thing with the franchise model. One thing that I haven't seen clear yet from the franchise model. And you

said this earlier is who is it for? Because I will say if you go and look at five different Casago websites, they may all be well run professional companies. And to your point about focusing local operator, maybe the local operator is excellent at their job. But it doesn't seem like they enforce the same brand standards or have the same consistency across different markets. So it's not like, oh, man, I had a really good experience driving a BMW in Florida. And then I go drive a

BMW in California, and it's a different car. That doesn't happen. That doesn't that doesn't make any sense. Right. But that does happen, I think, with these franchise models, where it's like, you may stay with a Casago property manager in XYZ location, go to ABC location, and it's not the same in terms of fit, finish quality type of home. So if that's the case, it's like the anti McDonald's example from earlier, imagine one McDonald's, you go to the burgers $9, and it's awesome. And it's served to you on a plate with a cloth, you know, thing and

it feels really nice. And then you go somewhere else the burgers dollar and it's you know, served you by an angry person who doesn't seem to want to be there. And it's upset that you're not ordering through the drive thru. Shout out my local McDonald's. So that's that's like the I think the dissonance that occurs on the franchise model to you, which is like, what are you there for? And I don't know, maybe this is a jumping off point on your side of things. I don't know if you're familiar with this brand. luxury retreats pre Airbnb acquisition luxury retreats in my mind was like this shining star in the hill of like, wow, this company seems unbelievably well run. The

inventory is mind blowing, like the quality of it is mind blowing. And it was consistent all the way through they had standards, they upheld them. There was a lot of stuff that didn't make its way into luxury retreats they want to. And Airbnb basically bought the company turned it into Airbnb Lux, which is kind of just been fizzling and sitting on the corner there. I mean, it's there. But I don't know anyone who's like dying to get to Airbnb Lux. I don't think it's worked out in a meaningful

way. And it goes back to this idea of like, even Airbnb is struggling with it, right? Because like now Airbnb has lux properties next to a shared room property for 50 bucks a night. And then you got a $5,000 a night, you know, luxury home, like those things don't make any sense either. But Airbnb has been the most resilient at figuring that out. To be honest with you, I can't exactly explain why, other than just the fact that people are searching

and finding what they're looking for, I guess, on the Airbnb site and they become known for that. But I'm actually surprised that that hasn't been figured out yet. Is all these problem sets defining them more clearly? And I don't think that Davidson making them more profitable is gonna be, they're not gonna solve new problems, I guess, there. What they're probably going to solve new problems, I guess,

they're what they're probably going to do is just like, are we going to focus on these 12 GOs and just do all of our effort on there. I also don't think that saga is going to solve that necessarily not in a bad way. But I just don't think they're going to solve it because I think it's a more fundamental flaw in the franchise model that is going to take like a decade to fix or like many, many years to fix that. And it's not something that's fixable right away.

I think how the franchises make money is, you know, you have to charge for performance to a certain extent there. And I do I think that kind of some of those early for the people who are starting their own and this is where I think I think the, you know, with Casago can take on where you're not starting fresh because we dealt with that inventory a lot. These businesses that are trying to go from zero to five, zero to 10, zero to 15, not necessarily because they want to because they have to because they have to pay their franchise fees because they have penalties in place if they don't have specific numbers by specific things. And I don't think that's everybody, but that is definitely a factor for some people is that they it's not a matter of

they don't you know they want everybody wants to grow to that certain extent. But they need to grow because that's part of kind of the outline for success or the roadmap for success for these franchises. So you do you have to you don't have to But in your mind you kind of have to start taking on anything that you can get and it's the whole order acquisition strategy weighing the value of holding to a brand standard versus Taking on inventories so that you can you know have a business Well, we'll speak on this idea for a second It goes back to this idea of how differentiated is the brand because like we talked about this before offline again, you did all these landing pages and direct mail pieces trying to come up with the USPs. And the truth is, most companies don't really actually have a USB, correct? Like if there's not actually it's not actually there. So speak on that.

I mean, there's no other way to say it. It's, yeah, you can put the marketing material you have for material in front of people, but again, there are not a lot of, you go into attribution sources and do everything like that, take it to the digital side of things. There are not a lot of people as there aren't on the booking side

who are visiting your site once based on whatever they did, filling out that form. Your first conversation with them is the close, the one call close. It just doesn't happen. You have to, like, this is a relationship that you're trying to nurture there. And I just, I think that if they are nurturing those relationships, and it seems like Casago does that reasonably well, then sure, you can have that success. But it is But I think the benefit that they'll have here is that you're starting with 50 units, you're starting with 75 units, you're starting with 60 units, you're starting a business that, I'm not going to say it's already, that's already jump started and ready to go because I think even if you're taking on 60 Picasso units, you're probably going to be dealing with some things, if not headaches, maybe people that want to understand how you're going to be different than Picasso, how you're going to deliver all the things that they felt like they were getting

or they didn't or how you're going to improve what they didn't feel like they were getting. So we can certainly talk about some of the strategies for targeting those displaced property managers, because that's going to be a big part of this is that there are whatever the number is now, that will not be the number in three months, that will not be the number in six months, that will not be the number at the end of 2025 of units on on whatever the system

is. So then, if I'm Casago, I'm starting to think about those things, right? I'm starting to think about some of those marketing efforts right now of this is how we are going to change. This is how we're going to be different. We know you haven't been treated the right way. We know that you have, your policies have not been great.

We haven't been delivering a great guest experience. We can go down the list of areas where we have some opportunity available to us. That is, if they're not already coming up with those strategies and then those campaigns to launch immediately and are kind of free, I mean, they should be pre-marketing this. You have to have the confidence that this deal is going through a little bit. We don't know where it's at, but you gotta start to do the groundwork. We don't know what the next six months look like

after an acquisition, but you gotta think that there are already conversations happening with, I mean, you have to know that people are already bidding in the back of their minds for, ooh, I see something in Park City. How many of these homes in Park City are available? In the Catskills, how many of these homes are available? So there's going to be some of these opportunities and some very unique markets. And yeah, there's a lot of low-hanging fruit for

how we can attack how we can, how they can retain it's it's it's gonna be a little bit of a battle there to see what how people really approach that conversation moving forward at the very least because yeah, is it Are you are you battling the castle? Are you better in Casago? Are you battling neither both? What does that look like? Yeah, I think the way I look at it too is like, from the homeowner's perspective, it's like they probably don't care about in a way they don't really care about the flag on the front of the building, right? Or the logo or the email address that's coming from they care about the performance. So if if a casa for those that have been sticking with the casa and working with them over an extended period of time, presumably there's pieces of that relationship that have gone well, presumably there's some markets that are doing well. Otherwise, I'm assuming the company with $36 billion wouldn't

want to spend 100 million of it on this thing. Because it's not even that you're buying the company for $100 million to them. That's like, that's like me getting a parking ticket when you have $36 billion is not that big of a deal. But at the same token, it's more all the work behind the scenes, the fact that they're willing to do it, and they're willing to be aggressive in doing it tells me that they understand what's behind the scenes as far as the work done. And they feel like they've got some idea or some solution to get to the right outcome. When it's all said and done, they figure out they have a path towards making it profitable again, and making it work well again. So they must see something that I would say honestly, in a way,

some of us don't like like I've speculated before that the Vakasa brand at this point is almost a toxic asset in a way that it's almost like, it's almost something that would you would either get rid of or change so drastically from like maybe like a design and branding and look and feel perspective that it feels new. Like it's almost like the new Coke meme that you know, will be referenced sometimes where it's like cake Coke changes the recipe like why that's an example of a company doing well and changing it for no reason. This I feel like is the opposite this I feel like is like the rebrand or we need to get rid of the old brand in order to launch something brand new, which obviously the

cassago merger gives them a great chance of doing that. But again, it'd be very interesting to see if that does go through, if the Casago merger goes through, what ends up happening to have a Casago brand? I'm assuming it doesn't just become a Casago.com, excuse me, overnight. I'm assuming there'd be some process to sort of slowly dismantle that brand and merge it into Casago. And then the Casago will eventually be like any brand that is sunsetted, it's gone away. And the website, some of those other materials will remain. But even that, like any brand that is that is sunset, it's gone away. And the website, some of those other materials will remain. But even that feels like a got a monumental undertaking to get 31,000 rentals added to all the

ksago assignees, you know, whatever the case may be there, getting all those companies up and rolling, think of how many sounds simple stuff. But like, think of all the trucks are running now have a cost of logos on them. There's a vacasa office relatively close to me that has signage like that all would have to get ripped down, like the amount of work needed to get that done there is, you know, it's almost like puts my brain into a pretzel thinking about it. But that's the kind of scope that we're talking about here, right? It's $100 million company. And then it's almost like you might need

to spend 100 another $100 million over the next few years to like get it back into the shape that it should have been in from the beginning. So that that just feels like such a monumental thing. And I don't think it's just the simplest thing, hey, give it to the local people. They're going to do a better job on operations and boots on the ground. I think that's one part of a like 20 part problem that is at hand here. And again, going back to that idea earlier of like

50 things, Vakasa does maybe 30 of them well, but are those 20 that have to fix? Each of those 20 things could easily take like a year to fix, you know what I'm saying? And we have to fix them kind of concurrently in order to get the right outcome there. And do we have all the right people in place to make that a reality?

I, you know, I don't know. I don't know. It's something that I would be very hesitant to, you know, broach or I'd want to like be very clear about like, how many of these problems can we actually tackle simultaneously one at a time to get to the right outcome? And I think some things, even though I wouldn't want to, I'd have to put on the back burner. Like I'd have to put a lot of marketing stuff on the back burner almost in a way to like get the operations and get the churn level down.

Because without that, we have nothing right. Well, and I think that that's obviously, you know, our lane is marketing, digital marketing and stuff like that. But this is the one thing that we really haven't talked about is there are people and there are still people working you have to the the casa is not running just as a headless entity here. There are people on the ground and, and those are things that as you know, as people are looking at what, what is going on, you know, now these different markets go into current property managers, things like,

what does that look like? Because because it has probably cut and laid off more amazing people than, than, you know, are, are still at the company. But how does that mesh with your current operations team and, and things like that? I think that that's certainly, you know, we can, we can look at the money, we can look at the numbers, we can look at, I mean,

the sheer numbers of properties are one thing, but there are people right now that are, that are making those, those properties wrong. Again, we can discuss till we're blue in the face, the quality to which or the degree to which they're doing that, but it's happening because again, the business is still functioning relatively well. So I don't know. I think that that's something that I would not want to be in the position of any any either of those two companies where right now you kind of don't know what's going to happen there

because I is I would assume that in some cases yeah those managers will stick around for the current manager market manager whatever that is will stick around for a month two months three months, but then what's going to happen? So I think maybe that that human side of things is something that we've seen so much fluctuation in this space as far as, you know, maybe it is. People are here, people are not here anymore, people are there, people are not there anymore, and I think that that's something that I'm wondering what is next for some of those people. I mean, do they just kind of fold

right into the Casago brand? Do they fold into some of these sub brands? What does that look like? Because we got to flip the switch on 33,000. But then what's the human capital that's being brought over and is going and are they a fit? I mean, that's, you know, I know Steve puts a big focus on getting the right people in the right side. I think he works with over there and the better talent side of things,

just making sure that they're bringing in the right people. So. But just, I think you nailed it there, like just the pure manpower to like get all those individuals over from, you know, from all the properties over and then all the relationships, all the reservations over from one system to another system. Let's just assume that they all move over and they all just say, Yep, sounds good. I'm willing to be part of the new entity. That feels like a monumental task

that I just don't know how anyone could be up for that battle. I mean, the amount of bodies you need to hire in order to get that to happen. I just can't seem to square in my head, you know, as far as how complex that project would be. And yeah, then at the end of it, it's like, like you said, yeah, the whole time, guests are checking in, guests are checking out, we got door codes flying around, we got cleanings being scheduled, right? It's not like we can pause.

If we could just hit pause for a second, gets the new thing and then be like, all right, we're relaunching under this new thing. Maybe that's like a cleaner break or a cleaner way of getting from point A to point B, but that's not really how it's gonna go, right? It's just gonna be like, hey, business as usual. Some guests just happen to go on Airbnb

and they booked a quote unquote, Fecasa unit. They're expecting their family vacation to happen on or their spring break, maybe I should say it now, spring break to happen on February or March 20th of this month. And they expect the property is going to be there. It's going to be clean. It's going to be ready to go. And there are things lined up with what's the actual boots on the ground reality of the situation. So it's a really, really sticky problem. I think when you think about just how complex it's going to be to move those things over. And I do think that although some of the ideas we presented today are talked about today are good ideas, executing on them across, you know, however many locations is going to be it's gonna be very difficult. I went to the

Picasso leadership page, by the way, I wasn't sure, you know, because this changes a lot. I'm just curious that there's been changes there. They have I think I've got this right, they have nine people on the board. And they only have five people on the leadership page right now. And one of the people on the board, Rob Greiber is the CEO and also the on the board. So really, they have four people that are not on the board, like involved in the company, at leadership level. And then they have all these, you know, across 31,000, there's individual companies I work with in a single market that have more than four people on a leadership team. So

that just feels strange to me, like just like saying that out loud, like that's what's on the Vakasa page right now. And again, maybe that's maybe that's incorrect. There's other stuff that's going on there that I'm not aware of. But that's what's on their own website, like fokhasa.com slash leadership go there right now. And actually don't even have I don't know if they have all their markets listed in one place. I know in the past, I've gone on the website and seen all their other markets listed on a

single place actually don't think they have that at the moment But as far as states go like just to give context in that way at least in the US They're only they're in every single state in the US including Alaska and Hawaii So of the 48 except for seven of them, I believe they don't have West Virginia, Kentucky. I'm sorry, Connecticut, Rhode Island Iowa, Nebraska, Kansas, North Dakota, which North Dakota is not a real place Which is a bit that I've done for a while and don't prove me wrong on that But that's a different discussion for a different day. And so think about that, right? All these different states,

all these different and I didn't even touch on Central America and South America. I think they have stuff in Mexico, Belize, Costa Rica. Okay. I thought they had more in South America or Central America. They don't just Mexico, Belize, Costa Rica. That's a whole another thing, whole another division of the company there, which, you know, Mexico wouldn't be a large lead for the Macasa or the Casago crowd. They're obviously familiar with that, but you know, it's problematic. So just, just to wrap your head around, like you know, Mexico wouldn't be a large lead for the Vecasa or the Casago crowd. They're obviously familiar with that. But um, you know, it's problematic. So just just to wrap your head around, like you said, the basics of like getting the software moved over, getting all the properties, metadata

moved over into the I was assuming they do streamline because that's the system that most Casago franchises used to my knowledge. Just that process alone feels like such a monumental undertaking, getting all the owners contact information moved over marketing this keeping this whole thing on the rails while that's happening just feels like such a monumental undertaking, getting all the owners contact information moved over marketing this keeping this whole thing on the rails while that's happening just feels like such a you know, such a challenge that I don't really know how you do it. So it goes back to like the premise this episode is like, how would we do this? I would have a really

hard time signing up for this or like being like, I want to tackle this and maybe the the ends will be worth the means maybe the or the means will justify the ends in some way. Maybe the final outcome here is going to be we bought a company that was once worth $4 billion for $100 million. And if we could just get it worth back to anything more than we paid for it, or like, you know, imagine you double the value of it, it's still like, you know, less than one 20th what it once was worth when it went public back in 2020, I think is one one public or maybe end of 2019. You know, that so in five years of

value, $3.8 billion of enterprise value was destroyed. If you could build back just some of that, it's reasonable to assume that maybe someone would buy it again. Maybe there'd be another changing hands down the road. Adam reminds me a lot on the other podcasts that we do that some inventory, and we joked about this, I think you and I offline before, would have been signed by what ResortQuest would have gone to Windom, gone to Vecasa, and now potentially gone to Casago. So imagine you're an owner and you're like, I'm dealing with a fourth company. And I mean, great, that's over many, many years in a way,

but still like just the fact that that could have happened to someone is like almost funny at this point that they would have been like sticking with it the whole time being like, yeah, the fifth guy, they're gonna figure it out. Whether we're onto that next one, down the road. And that just feels like such a battle here. So it's, this is like we said here at length before,

these are such sticky problems to solve. I think it's indisputable that many things could be done more efficiently from some corporate HQ headquarters type thing. And many things, I mean, I would argue our marketing services are done remotely, and we have a few local clients. But like all the stuff we're doing marketing wise can be done from afar. Certainly, there's things that cannot be done from afar. Cleaning cannot be done from afar. A property inspection cannot be done from afar. You know, at that relationship with a homeowner, I think that can be done from afar. Cleaning cannot be done from afar. A property inspection cannot be done from afar. You know, at that relationship with a homeowner, I think that can be done from afar, but it needs to have consistency. It needs to be the same person I'm talking to all the time. And certainly it's going to do better if it's not from afar. If the person you're talking on the

phone to goes, Oh yeah, I was just at your property the other day and I saw XYZ or I was at your condo building the other day or I saw XYZ or whatever the case may be. So there's, it's really like, no one's figured out the right formula yet, including the casa. And I don't want to say Casago hasn't figured out yet, because that's not fair to them. But I would say they obviously have proven that their formula has led to a certain level of success remains to be seen if by adding 30,000 units into that same formula, if it's still going to have the same level of success, or they're still going

to go in the same direction that they are going, which is hopefully positive. But you know, it's fair to say, and I say this again, with all love and respect to the world for people there, Casago wasn't taken over the industry, Casago doesn't, you know, run any market. There's not a single market I can think of where Casago is the biggest company in that market by any stretch. And in most markets, it feels like I often see them lower on the leaderboard than higher in the leaderboard. And usually the biggest company in that market is only in that market. That's usually the case.

And even when you see these new models of private equity or other groups buying them, there's some out there that you and I have talked about before offline where they're buying the companies and keeping the front more up. And they're not merging the brands, those companies are buying companies that were already successful. So I don't think that's like a fair, like, that's a different game. Like, I'm going to take these companies and figure out how to roll them up and sell them. That's different than even what Picasso was doing. Because they're not trying to harm the local brand. I mean, that's the Milo was done VTRIPS. And you know, that's a different model than what other people have done. And that obviously has had its its growth curve and it's had he's had his struggles as well. He's done Laos before there's articles on skiffed about that. So that's not, you know, guaranteed slammed on success either. So this, this stuff is just hard, like it's super hard. You know, I don't know exactly how this is going to go. I think you and I remain, you know, I guess skeptical that it's all going to go to plan and everything's going to look nice and rosy along the way. But maybe, like I said, it works out to be a good deal for the whole Casago crew and the financial backers working with them if they end up getting more than they paid out of it. There may be a lot of carnage along the way, a lot of lost properties,

a lot of missed opportunities, missed inventory. But if they take the shell of this company that was once worth $4 billion and figure out a way to make it worth $200 million again, and they spent $100, they might look like geniuses from a financial perspective. So maybe that's the way they're thinking about it. I don't know. But I don't see this as some, you know, paradigm shift. And, oh, man, the way it's going to work now is they're going to take over the world. I think there's just too much nuance, too much fragmentation that it's not going to be a problem that's going to be solved anytime soon. It is it is something that is going to move the industry a little bit. I mean, it is that's that's, it's too big to not do that. But we're going to see a fundamental shift. This is not a COVID level thing. This is not a disaster level thing. This is another big player in the space just kind of starting to do something a little. It is interesting that the big names have, you know, over the last five years we have seen a lot of shift and change with the Windom's and the Resort. Those are not like new concepts. It's not new concepts that

these big companies are moving, changing hands, doing things, growing, shrinking, going out of business. But I think it's But I think it's maybe reassuring that as a whole, the industry is still kind of pushing through, pushing on. And when you have that big of upset, it doesn't impact everywhere else. I mean, it is, it gives some of these smaller managers opportunities to pick off properties. It gives some of these larger managers the opportunity

to better define themselves against a different brand. It gives, it hopefully gives these big brands a chance to maybe set a better standard for the industry. I mean, I would love to that be part of this where we have more standards. We have a better expectation that is universal as opposed to, yeah, every market's a little different. I mean, we, you know, this is not the McDonald's model. This is the Casago model will not be the McDonald's model, but I think they can still bring some greater strength to what they're doing and some greater cohesion and unity and things that I do think will, on a grander scale, benefit the industry. So I think what it what the final product is, is more or less irrelevant. I just hope that we get some positive momentum of some kind. All of the tides rising all the all the

ships there and that happening right there. So he's so passionate folks that he's ending their podcast by taking his drink and just throwing it all over his throwing it all over everything. It is just that's how it. That's how passionate I am about this. Well, that brings us to a close here, Paul. I'm with you on that. And hopefully this, this, you know, this conversation was more, more meant to like, talk about some of these issues, talk about some of the things that we feel like are the ways that maybe we would

try to approach it to figure out how to get there. But it's a hard problem. If they pull it off, then God bless if it ends up being, you know, the growth curve that they think I'm rooting for them. I want this to go well. I want people to be happy. I think the cost is actually when I hear someone having a negative experience through a professional manager and I hear that it was from a large company, maybe like a Vecasa, it ends up harming our industry long-term.

Because it gives that someone who gave that money to that person the chance to say, you know what? I don't wanna go do that again. And that's not what anybody here wants. Whether you compete with the Vecasa, whether you like them or don't like them, it's reasonable to assume that if someone goes and books a vacation rental,

they give their hard-earned money to stay in a vacation rental, particularly the first time. I want them to have a good experience so they come and stay again. And of course it's our job to make sure that they come to our clients and make sure they book with them. And that's a good way to think about it.

So that is all we got. We'll put a bell on this one. Thank you, Paul, for your time and attention. This is a fun, more conversational episode. We'll come back next week with some more hard-hitting marketing stuff. And Paul will continue to throw his drinks on the table in the meantime.

So thank you. Leave us a review, go to your podcast app of choice, click follow, click subscribe, and we'll catch you in the next one. Thanks so much.