Operator: Our next question comes from the line of Bernie McTernan with Needham & Company. Your line is live.
Bernie McTernan: Hi. This is Stefanos Crist calling in for Bernie. Thanks for taking our question. Just wanted to ask about churn versus the increasing market supply and could you talk about what you’re seeing in gross adds? Thanks.
Rob Greyber: Yes. So on churn, when we look at churn, as we’ve shared on prior calls, churn is not where we want it to be. The industry continues to come off the highs that we saw in 2021 and 2022. We do see owners continuing to cite frustration over income levels as one of the top reasons that they look to change. We’ve shared that we’ve seen some improvements in our owner NPS through the last 12 months. We’ve made substantial investments in working with our owners on one of the other top reasons that they cite, which is around owner communication. So the tools, the processes, the work that we’re doing there, we are very focused on those two things as well as working with them on understanding, on delivering revenue premiums wherever we can on making sure that they understand how we are thinking about pricing and pricing strategy and understand the market dynamics.
At this rate, churn has not gotten to where we want it to be. We haven’t seen those things translate into less churn at this stage. In terms of ads, we’re continuing to focus on our organic sales performance with the transformation. As I mentioned, we’re focused on empowering our local teams to have more responsibility, more say in this, be able to be more aligned and as they’re building those relationships with owners, we’re building those things into incentives and we believe that the teams that are going to be closest to our owners working together more and more, they know the owners best, they know the local teams best and they’ll have that ability to drive better outcomes over time.
Operator: Our next question comes from the line of Lee Horowitz with Deutsche Bank. Your line is live.
Lee Horowitz: Thank you for taking our question. This is Ishant on for Lee. So in terms of trends, Feb saw slight uptick in the nights. So can you give some more color on what would that have been excluding the impact of extra leave day? And in the shareholder letter, it is mentioned that nights and GBV for nights are coming below your expectation. Can you help us understand how does that compare to the 1Q? Thank you.
Rob Greyber: So a couple of things and I’ll ask Bruce to jump in just on the evolution of night sold and so forth. So from an industry perspective, when we spoke at the back in February, we had indicated that we were seeing a very dynamic environment in in vacation rentals — in vacation rentals in the markets that we serve, primarily domestic, nonurban markets and then the second thing was around increases in the supply of short term rental units. So for us, we saw these kind of weak and volatile intakes in January. We did see some stabilization and signs of improvement as we got into February and that was encouraging as we approached some of the booking windows for our summer peak season, but we were obviously watching that very closely.
However, during March and April, the bookings billed for our peak summer season has remained below our expectations and so as we look at that and we look out through the rest of the year, it’s become clear to us that the summer season and the dynamics through the year will be very challenging and likely down again on a year-over-year basis. So there’s some longer term trends here that we think are in play on just sort of softening consumer demand, but that’s what we were seeing as we were looking out at the beginning of the year.
Bruce Schuman: Yeah, perfect. And just to give you this is Bruce. Just some additional color on how the quarter played out to your question. Revenue obviously declined 18% year-over-year while homes under management those declined by about 5%. So, think of the rest of that gap is really due to the lower monetization of the homes on our platform and again based on the data we see, we think this is happening across the industry. It’s not really specific to the Vacasa, and that lower revenue specifically because of the ADR, the pricing component that drives some deleverage for us across the cost structure as you just can’t lower your cost structure that fast in the quarter by 18% even though we’re much more variable than we were.
That really drove the declines in adjusted EBITDA year over year for the quarter. Given we believe these gross booking value levels to Rob’s point are going to persist. That’s why we you saw us take the action today to really accelerate our company transformation and significantly reduce our corporate expense load.
