Why I’m Not Mad About the Vacasa Devaluation

This post was written in October 2023 after the first Vacasa/Wyndham partnership devaluation. For a post about the most recent devaluation, which took place on 3/26/2024, please visit my newest post on the subject.

There has been a lot of chatter in the last couple of weeks about the Wyndham points program recent devaluation. Wyndham points have suddenly become less valuable for booking Vacasa vacation rentals. At the end of the day, I’m more relieved by the changes made to the program than upset about it. It seemed like something that was inevitable and I think they still managed to keep the partnership valuable with Wyndham.

Update (3/6/2024) - Loyalty Lobby reports that starting on 3/26/24 pricing for a Vacasa vacation rental with Wyndham points will be 15,000 points per bedroom per night for a rental with an average price of up to $250 per night per bedroom. The price will be 30,000 Wyndham points per bedroom per night for a rental with an average price of $250 to $500 per night per bedroom.

We have used Wyndham points twice to book Vacasa rentals and have gotten great value with those two bookings. I have written about those redemptions in the two blog posts below.

What is the Vacasa Partnership with Wyndham?

Vacasa is another short term home rental agency, like Airbnb or VRBO. Being a family of four we appreciate the extra space a vacation rental provides, and we try to eat healthy as much as possible which is difficult to do when eating at restaurants all the time. Because of that, a kitchen is a huge bonus for us. I know people hate the “inconsistencies” of vacation rentals, but I’ll take a vacation rental with worn pillows and sheets and a kitchen over a 300 square foot hotel room with a terrible coffee maker and perfect sheets. I also find daily housekeeping to be more of an annoyance than a benefit.

There are very few partnerships in the short term vacation rental space, Marriott has Homes and Villas and Wyndham has Vacasa. Hyatt is working on a vacation rental program called Homes and Hideaways, but we’re all waiting to see whether or not it becomes a big deal or just a few rentals in a few locations. Because of the limited choices, booking vacation rentals with points is not easy. But the Vacasa/Wyndham partnership is the best way right now to book rentals with points.

Wyndham and Vacasa put together a relatively easy to understand program. Basically, if you looked at the Vacasa website and you found a rental that you liked, and it was available on the days you wanted, you could rent it for 15,000 Wyndham points per night per bedroom. In other words, if the rental was a 1-bedroom, it would cost 15,000 points per night, a 2-bedroom would cost 30,000 points per night. There was only 1 limitation of the program, and that was that the price for the nights that you wanted would have to be under $500 per bedroom per night. So, you could rent a 1-bedroom for 15,000 points if it was under $500, and you could rent a 2-bedroom for 30,000 points if it was under $1,000 per night.

That Wasn’t Going to Last

That was way too good of a deal. You could get maximum value for those Wyndham points at 3.3 cents per point when Wyndham points are normally valued at 1.1 cents per point. On top of that there are some great ways to earn Wyndham points, such as 8x on gas and 5x on utilities when using the Wyndham Business Earner card. In the case of the gas, if you were to earn 8x and then spend it at 3.3 cents per point, you would be getting 26.3% back and there is no way that is profitable. If you also take into account the 10% discount you get when redeeming points when you have a Wyndham Business Earner card it was like getting 29.6% back.

This deal was going to have to change. This felt like the kind of deal that happens if they were just trying to figure out a simple way to bring vacation rentals into the Wyndham points program. Once the word got out and people started to take advantage of it, they were going to have to change the program – it was inevitable. I was worried that they would go to a cash value system, where they would allow you to book Vacasas at 1 cent per point. That seemed to me to make the most sense from a business perspective, and while I would probably still use it occasionally, it wouldn’t have been great deal.

How Did they Devalue Vacasa/Wyndham?

One morning I was scrolling though Twitter and came across a post from Shawn Coomer at Miles to Memories titled “Vacasa Makes Negative Change to Wyndham Rewards Bookings“. Oh no, here it goes, one of the great deals in miles and points is gone. But after reading it I felt okay. What they did was lower the cap from $500 per night per bedroom to $350 per night per bedroom. The price is still 15,000 points per night per bedroom. What this means is the maximum value falls from 3.3 cents per point (3.7 with Wyndham Business Earner Card) to 2.3 cents per point (2.6 cents per point with Wyndham Business Earner card).

That may seem like a bummer, but I think it might actually be a blessing. I was very suspicious that they could keep this program the way it was because I didn’t believe that it could be profitable. If they have made this particular adjustment, I would assume that this should make the Vacasa/Wyndham partnership more sustainable. I actually feel better about building up balances of Wyndham points, because I feel there is a better chance that they won’t completely devalue Wyndham points or kill the partnership altogether.

How Much Does the Devaluation Hurt?

I think that the way to measure how big the Vacasa/Wyndham partnership devaluation is to find out how many properties are suddenly unavailable for booking on points. What that means is, how many 1-bedroom properties are priced between $350 and $500 per night and how many 2-bedroom properties are priced between $700 and $1,000 per night. For this I’ll look at Hawaii during a spring break weekend in 2024.

There are 147 1-bedroom properties for rent on Vacasa for the weekend from March 15th through the 18th for up to $500 per night (bookable under the old rules). There are 136 properties for the same weekend for up to $350 per night (bookable under the new rules).

There are 126 2-bedroom properties for rent on Vacasa for the same weekend for up to $1,000 per night (bookable under old rules) and 124 2-bedroom properties for rent for up to $700 per night (bookable under new rules).

So with all of the handwringing about the changes to the program, people have lost access to 13 properties during a Spring Break weekend in Hawaii while still having access to 260 properties. Even though you are probably losing access to the nicest properties, that’s not a lot of properties in a time and place where vacation rentals tend to run very expensive. The sky isn’t exactly falling.

What might Be Around the Corner

The one thing that seems to be missing here is that the higher end Vacasas won’t be available for a points redemption. This could be an area where Wyndham could make changes in the future to allow for a higher point redemption for a more expensive property. For example, maybe they say that a vacation rental from $350 – $700 per bedroom costs 30,000 points per bedroom if they wanted to keep the point chart simple. But with this new devaluation, the higher end Vacasas are out of reach on points and allowing for a second tier would at least make them bookable.

Another potential devaluation I could see on the horizon for the Wyndham program would be the elimination of 8x on gas when using the Wyndham Business Earner card. It just seems so out of whack, that I can’t understand how that’s a good business move for them. I would expect them to drop it to 3x or 5x some time in the future.

Even if they made these changes, the Wyndham program would still be a great program. The redemption rates on Vacasas are still way more valuable than using them on Wyndham hotels and earning Wyndham points is still fairly easy to do. I’m obviously a big fan and still plan to use it for vacation rentals in the future.