Handing Over Key to the Rockies: What it was Like Selling Our Vacation Rental Business

Mike and Julie Magliocchetti tell the story about the recent sale of their business, Key to the Rockies, to Vacasa.

Mike: It all started when we converted the tiny hot-tub room in our Keystone, Colorado, townhouse into an office using a piece of plywood. We worked six days a week for the next twenty-eight years building a successful property management business on the wave of the Colorado ski industry. We loved every minute. This year, we sold that business and went to work for the buyer. To the surprise of friends and family, we couldn’t be happier. This is our story:

Julie: Mike and I met on a blind date at Keystone Ranch. That was back in the 1980s, when I used to Scotchgard my jeans. I’d spent spring breaks skiing with family in Colorado, and the mountains never stopped calling. After graduating from Michigan State University, I packed up my golden retriever and headed west to the Rockies where I fell in love with Keystone’s

Soda Creek Valley—and also with Mike.

Mike: I followed my brother from the Philadelphia area to Colorado in pursuit of powder. It was 1977: the golden age of skiing. I moved to Keystone where Keystone Resort was developing condominium lodging throughout the valley. I landed a job as a night auditor for their condominium operation, moved to manager of employee housing, then found myself in rental operations, running commercial laundry for the resort (we did 12,000 lbs. of linens every day). Ultimately, I was promoted to director of property management for the resort, where I helped manage convention business during the off-season. That’s how I met Julie.

Julie: After getting married, Mike and I decided to start our own property management corporation in Keystone; we’d named the business Magliocchetti Rentals. But on a business trip to Chicago, we had some potential clients tell us the name sounded like a pizzeria. They suggested we call it Key to the Rockies instead. We trademarked the name and began growing our portfolio. For families with second homes in Keystone, having a local contact was a much-desired service. We just needed to get the word out.

Mike: The scope of our marketing was classified ads and romancing the travel agents. Whenever the industry took a little evolutionary step forward, it was easy to keep up. Travel agents turned into travel wholesalers who packaged bulk lodging and bulk air. As a small company, we didn’t have marketing capital, so we relied on these third parties and sweat equity to keep heads in beds.

Julie: Back in the 1980s, I used to drive from Colorado to places like Nebraska and Iowa to visit travel agencies. I’d show up with donuts and say, “this is our company and these are our properties; let’s do this thing.” It’s hard to even imagine now. I just drove around visiting travel agents, youth groups, churches, and anywhere else I could think of throughout the Midwest to make presentations. I didn’t care; we just wanted guests.

Mike: The vacation rental industry wasn’t for everybody back when Julie and I got started. It was a specialty market catering to a certain type of guest at primarily beach or ski resort destinations. It wasn’t always glamorous work, but, as a property manager, if you were willing to put in the elbow grease, you could run a profitable business in a beautiful location that you loved.

Julie: I would say the early 90s–during the dotcom boom—was when things started to get harder. Everybody was starting to develop websites—that was a big change for the industry and for us. We jumped on board as much as we could. I think Key to the Rockies went through half a dozen websites during that time, each bringing new complications to connecting things like our booking engine, back-office accounting system, and property management software.

Mike: As the years progressed, it became possible to wrap those business elements into one fully integrated system, so we did. Then everything went cloud-based. Changes in technology kept coming at us, and they kept coming fast. We’d put our eggs in one basket only to see they were already hatching in another.

Julie: One day, we realized that we needed an employee fully dedicated to business development and another to marketing just to keep up. We didn’t have the capital to bring on new staff, so we added to our staff’s steadily increasing workload. For the first time, we began talking about what it might look like to one day sell our business.

Mike: Over the years, we’d had a number of companies offer to buy Key to the Rockies, but either the timing wasn’t right, the numbers were wrong, or they were too pushy. Then one day I received a fantastic email from Sandra Brahn at Vacasa, and it changed everything.

Julie: Mike didn’t show me that email for two weeks. Then one day he pulled me aside and said, “Julie, I think you should take a look at this.” Sandra had attached a video of herself. She greeted us my name and proposed a partnership-style acquisition that would enable us to continue working under Vacasa’s banner. There was a comfort level with that partnership approach that appealed to us.

Mike: Plus, Vacasa’s 35% commission, which is the same as our commission, was attractive. Likewise, the terms of Vacasa’s service were similar to ours. What was most appealing to us was Sandra’s interest in creating continuity with the two of us. In addition to working for Vacasa, she told us we could carve out our real estate business and operate with a mutual referral relationship with Vacasa: if we referred our clients to Vacasa, she said, Vacasa would refer their homeowners to us. We thought, what’s not to like about that?

Julie: We met Sandra at a time when it felt like the walls were beginning to close in around us. Every month we hesitated seemed to bring a new reminder that we needed help. That winter in Colorado, we didn’t get a lot of snow. Looking at our competitor’s rates, I thought, holy smokes, we have to do some discounting, but it was like pulling teeth to change rates on our website. Realizing that we weren’t providing our homeowners the service they deserved was a huge eye-opener for us.

Mike: We weren’t performing in yield management because I didn’t have the marketing talent to really understand how to optimize it across the reservation grid. I knew the concept. I was exposed to it at Keystone Resort, where we had an entire marketing team at our disposal, but I wasn’t in a position to put it in place in our small business. We were faced with very real limitations in our ability to measurably improve performance for our homeowners, and there were other stakeholders to consider.

Julie: With Vacasa, our team (and Mike and I) would have continued employment—with benefits. And that’s a big deal because Summit County, where we live, has the highest insurance premiums of any county in Colorado (which has the highest premiums in the United States). The idea of securing 100% free health insurance—including dental and vision—and paid vacations for the team was pretty awesome.

Mike: Key to the Rockies needed a shot of capital in the arm. We knew from Sandra that Vacasa had recently made an acquisition in Key West, Florida. We called up the former owner and principal broker (who now also works for Vacasa) and asked about his experience. He warned us that selling our business would be an emotional rollercoaster. He also told us that just after he’d sold to Vacasa, Hurricane Irma hit. “Vacasa came through for us with full support,” he said. “They booked our homes and helped house our team. They’re a good company.”

After four months of researching and getting to know Vacasa and how they do business, we called Sandra and said, yeah, this is a good fit. She flew out with the transition team and a road map. They walked us through what would happen, when, and told us what we needed to do to prepare.

I think I wrote six or seven drafts of the announcement letter before I sent an announcement to our homeowners. I explained who Vacasa was and told the truth: we didn’t have our company on the market. We’d talked with Vacasa in-depth about the mutual benefits of partnering with them. The more we talked, the more Julie and I learned that there were huge advantages for all our stakeholders.

Julie: In his letter, Mike told our homeowners that, based on Vacasa’s historical performance, we thought it was in their best interest to take advantage of the opportunity. Furthermore, he told them, it was a great financial opportunity for us and an opportunity to give something more to our team.

Mike: The reaction from our homeowner base was overwhelmingly positive. Over a dozen of them called to congratulate us. I attribute that to the integrity and trust that we’d built up with our clientele. Plus, it was a good story to tell: they get the same care plus a bigger opportunity for marketing with a global company.

Julie: Our professional colleagues reacted with a mix of congratulations and envy. There was the feeling that we ran a successful business; it was perceived to be valuable, and we just took the next step in its growth. People know that Mike and I went to work six days per week and were hands-on.

Mike: Given my experience managing HOAs here in Keystone, Vacasa asked me to further develop its HOA business across the Co

lorado market. It’s a good fit for me, and I’m happy to say that all our HOAs agreed to the assignment of their contract with Vacasa.

Julie: Now I’m a community manager spreading the good word wherever I can: community events, chamber events, and I’m here for our homeowners. My job is really to put a local face behind Vacasa. I know the community, and I know the benefits of Vacasa. It’s fun.

Mike: Probably the biggest change for us has been the speed at which things move. It’s a big change in our lives. We’ve been chugging along for twenty-eight years doing the same thing. Now we’re part of a big corporation, learning new things every day.