CEO Spotlight: Steve Schwab of Casago

Casago

Steve Schwab is founder and CEO of Casago, a Arizona-based vacation rental property management company. The company made headlines at the tail end of 2024 after announcing plans to acquire competitor Vacasa, which has nearly eight times as many homes in its portfolio. 

Schwab's journey to this point goes back to 2001, where he worked at Cyndi’s Beach Home Rentals in Sonora, Mexico. After expanding the brand locally, Schwab advocated for empowering local property managers and still retains this belief as he advocates for a franchise model, taking inspiration from the hotel sector.

Casago, a vacation rental property management company founded in 2001, announced in December that it planned to acquire Vacasa, a much larger competitor.

Casago, which works on a franchise model, manages nearly 5,000 properties in 72 cities in the United States, Mexico, Costa Rica and the Caribbean.

Steve Schwab, CEO of the Arizona-based company, talked to PhocusWire about his priorities and growth plans for the business, as well as artificial intelligence and what he makes of Airbnb’s co-hosting marketplace program.

The conversation has been edited for clarity and brevity.

Following the Vacasa deal announcement, what are your priorities?

To continue to love on the team, on our homeowners and our guests to make sure that what we have been doing, that makes it successful, will continue to go forward. This is a relationship business. If you lose sight of those relationships, that's where the struggles start to happen.

I’ll have even more of a focus on caring for our homeowners, our team and our guests. More of a focus on that than ever to make sure that what makes us special remains there.

When companies scale too fast, they can lose focus. In the STR sector, are customer relationships at risk when companies get too big?

Your leadership style and the skill set it takes to run a large organization is very different from what it takes to run a smaller hospitality group, especially within the short-term rental industry. A lot of people who come into the STR world, they get an emotional connection with homeowners.

To remove yourself from that and trust your team will learn how to do that on their own, allowing them to fall off the curb so they don't fall off the cliff, and building those teams up, can be difficult for people. But when you start to scale the enterprise, that takes another full skill set you don't always get. If you go too fast, the company can outgrow your leadership ability and your skill sets.

For us, the big thing I've seen is why you are in the industry matters. If you're in it just to make money, you're not going to do well. This is a homeowner-loving, guest-serving, wrench-turning, bed-making, toilet-scrubbing business. And if you love it for those reasons and stay owner-centric, your ability to scale is going to be much easier.

Casago operates a franchise model. Is that the key to now scaling the company?

The advantage of a franchise is the local operator has a financial incentive and owns that business. He or she loves their community and isn't using their community because they live there too. And so there is a responsibility to their neighbors. The love of the community is a big part of one of the major reasons we believe the franchise model, among other reasons, is the right model to go with.

You’ve mentioned in the past how the hotel industry has had lots of success in franchising. Any brands that inspire you?

I love Four Seasons. I think they do a lot right. I know (founder) Issy Sharp, if you ever read his book, about how he started with pretty much nothing and built his way up to something that's pretty amazing, he had a fantastic journey. The way he's built his culture, the way he's made sure to maintain his focus on what matters, and his value proposition … I hope to follow a lot of those same principles.

What are your expansion plans?

We hope to be able to come to Europe. We continue to look to the future at some point to be part of the European community in a responsible way. And with locally-owned and -operated small businesses. The hope is to take the franchise model to Europe.

What is Casago’s AI strategy?

Obviously there's a massive amount of opportunity, and we all need to be bracing for a major shift in how business is going to be done in the future. For now, my belief is using AI to make Casago bionic, but not robotic. When I say bionic, what I mean by that is if my teams can find more accurate information faster and process information, and then be able to relay that as a human to human, that's the best use. To interface with our homeowners, guests and teammates with the best information as fast as we can and the lowest friction.

There's all sorts of innovation that will end up coming into place. Eventually, there'll be homes that manage a lot themselves. Our property manager can't be in a home 24/7, but AI sensors can be. I'm not talking about intrusive sensors. You have accelerometers that are RFID-driven, to let us know when a toilet's running for hours, or when we're getting to freezing point and the pipes might break. Or listen to the vibrations of the AC compressor and know it's running 40% longer than it normally runs at the temperature outside.

How did your time in the US Army Special Operations impact your leadership style?

I was exposed to some of the toughest, strongest minded, most ambitious men on the planet. And being within that culture changed the way I see the world. I don't think I would be in the same place without those men. They were difficult to stay up with. It constantly took everything I had to stay up with these guys, and it taught me a ton of life skills and leadership skills. Not only who I wanted to be as a leader, but I also got to see, under difficult situations, who I didn't want to be as a leader.

This is a homeowner-loving, guest-serving, wrench-turning, bed-making, toilet-scrubbing business.”

Steve Schwab, Casago

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What’s your take on Airbnb's new co-hosting marketplace?

This isn't the first time they've initiated this. I personally think it's a way to undermine locally-owned property managers. It’s a grab by Airbnb to try to get more, instead of trying to find local heroes who are actually following the real estate law.

It's something to get around real estate law. You have property managers who are required to have trust accounts, required to be licensed. I don't think what Airbnb is doing is good for the industry as a whole. And while Airbnb is an important channel, it's not the only channel.

You get to be an Airbnb co-host, but then you're locked into just Airbnb. What about all the other channels that drive a ton of traffic and a ton of opportunities?

The STR sector continues to come under regulatory scrutiny. What's your view of governments imposing extra legislation?

The reason there is pushback is because us, as an industry, have not regulated ourselves. When somebody else has to come in and discipline you, you're not going to like it and that's what we're going through. As an industry we need to take the responsibility to regulate ourselves and take care of the bad actors. Fair regulation sustains the industry. It's not fair to overrun a city with bad actors.

I’m a big advocate of Rent Responsibly with Dave Krauss. We work through him a lot. Casago has a five-person committee on advocacy, we take quite an active arm, but our stance is we don't want a free-for-all, we have our place in the community and we need to make sure we maintain that. But the bad actors give us a black eye, and if we're not taking care of it, somebody else will.

Casago University is your in-house professional development program for property managers. Do you have any plans to grow that following the Vacasa acquisition?

We fully intend to grow it. We're working on something called the short-term rental operating system, which is more expansive than just learning to be a property manager. It's also learning how to be a good business owner, how to run meetings, how to do everything. And we're bringing in experts throughout the industry to contribute to this.

Tours, activities and attractions are a hot topic currently in travel. Any plans to add more services?

In specific locations we have a well laid-out concierge service. Making sure people have the local experience and something authentic is a big part of the reason why people travel now. But you also need to be aware that often people will go stay in a home because their motivation is not necessarily to get into the middle of Las Vegas and party. Their objective may be to find somewhere quiet and peaceful and with somebody they love. People have very diverse reasons to come to STRs.