Should Vacasa prioritize adding more luxury properties to attract high-end renters or focus on expanding budget-friendly options to increase overall booking volume?

Introduction

The trade-off question at hand is whether Vacasa should prioritize adding more luxury properties to attract high-end renters or focus on expanding budget-friendly options to increase overall booking volume. This scenario involves balancing the potential for higher revenue per booking against the possibility of increased total bookings and market share.

My analysis will cover key aspects including product understanding, stakeholder impact, metrics identification, experiment design, and a decision framework. I'll conclude with a recommendation and next steps.

Step 1

Clarifying Questions (3 minutes)

• Based on Vacasa's current market position, I'm thinking we might be underrepresented in the luxury segment. Could you share our current property mix between luxury and budget-friendly options?

Why it matters: Helps understand the starting point and potential for growth in each segment. Expected answer: 70% budget-friendly, 30% luxury properties. Impact on approach: A low percentage of luxury properties would suggest more room for growth in that segment.

• Considering our revenue model, I assume we take a percentage of booking fees. Is the commission structure different for luxury vs. budget properties?

Why it matters: Affects the potential revenue impact of focusing on either segment. Expected answer: Higher commission percentage for luxury properties. Impact on approach: Would make the luxury option more financially attractive if true.

• Thinking about our user segments, do we have data on the booking frequency and average stay duration for luxury vs. budget renters?

Why it matters: Helps predict the potential impact on overall booking volume and revenue. Expected answer: Luxury renters book less frequently but for longer stays. Impact on approach: Would influence the balance between attracting more bookings vs. higher-value bookings.

• From a technical perspective, are there any significant differences in the onboarding process or platform requirements for luxury vs. budget properties?

Why it matters: Affects the feasibility and resource requirements for expanding in either direction. Expected answer: Luxury properties require more detailed vetting and higher-quality imagery. Impact on approach: Would impact the timeline and resources needed for expansion in the luxury segment.

• Considering our current team structure, do we have dedicated teams for luxury and budget segments, or is it a unified approach?

Why it matters: Influences the operational impact of focusing on one segment over the other. Expected answer: Unified team structure with some specialization. Impact on approach: Would require consideration of team restructuring or training needs.