Latest / GAIN Momentum / Elevating Aparthotels for the Lean Lifestyle Segment | with Niko Karstikko

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Elevating Aparthotels for the Lean Lifestyle Segment | with Niko Karstikko · GAIN Momentum

• ​GAIN Momentum episode #71: Elevating Aparthotels for the Lean Lifestyle Segment | with Niko Karstikko === Adam Mogelonsky: Welcome to the GAIN Momentum Podcast, focusing on timeless lessons from senior leaders in hospitality, travel, food service, and technology. I'm joined today by Nico, co-founder and CEO of Bob W. Niko, How are you? Niko Karstikko: Thank you, Adam. How about yourself? Adam Mogelonsky: I think I'm almost there. Almost few more coffees. 'cause uh, you know, for here, for me, here I'm in Toronto. It's 9:00 AM for you. You're, you are in Finland, so it's end of day for you. Niko Karstikko: That's right. We're in the two opposing ends of the, the global ice hockey spectrum, so I'm coffee. Adam Mogelonsky: And, and yet here we are talking about trends that affect the whole world. Hospitality as well as the larger pool that is real estate. Niko Karstikko: I guess so. Adam Mogelonsky: Okay, so let's start, give us the elevator pitch for Bob W. Niko Karstikko: I mean, listen, we, I guess we're, we're the answer to we are the professional institutional answer to the Airbnb generation that's growing up. We. Traveler that's mixing business with pleasure, um, that's spending a longer time on the road, um, is looking for, and that is not a traditional hotel in this traditional context anymore. And we obviously have tens of millions of Airbnb booking.com listings to prove it that they're looking for something else. Now, we basically have created a, what we call best of both worlds concept, which is best of the hotel experience, best of the short stay rental experience package up into this. Lifestyle brand called Bob w uh, and under the hood we're a tech company. We make the whole thing run on technology. So on the one hand, we don't screw things up. We remove human error from the most labor intensive industry in the world. And on the. Elevate that experience by, uh, creating a full service offering with self service apps, with, uh, amazing, empathetic hosting by Bob w and a marketplace. So we're full service, even though we don't have the operational risks, the costs or the, the, the issues around breakfasts and gyms and things like that. And, uh. that's basically where we're at today, where we operate. Uh, we started five years ago. Today we operate, uh, 45, uh, apart hotel properties in 18 cities, in take 10 countries, uh, total portfolios over 85 properties, uh, or 5,000 units. Uh, probably, if not the fastest growing, if not the fastest growing one of the most fastest growing, um, uh, hospitality operators and brands, uh, coming outta Europe. Adam Mogelonsky: So there's a ton to unpack there, but where, where I want to go to start off with in revealing all this is where you started 'cause your career, if anyone just looks at your LinkedIn. It didn't start in hospitality, started in tech, in, uh, marketing and in other fields. And traditionally, if you're starting in those fields, the going motto is, don't enter hospitality. It's, it's, uh, it's too much, uh, for too little return. So when did you sort of. See the opportunity to establish a hospitality brand that, that used tech as part of its ip, uh, to really drive performance. Niko Karstikko: You know, life works in mysterious ways. Um, and, uh. I mean, my, my, my background there, actually, one of my, my first summer job was actually in this very town I'm at right now for the weekend, which is in Hanco, Finland, a beach town in, in southwest Finland. I was a bed and breakfast manager that I ended up asked by accident. So, and there I got paid for responsibility because instead of hours. Basically hustled, uh, you know, there was a, the guy who got got fired and uh, uh, in the front desk where he left, I can't remember exactly. And I was only the dude who was doing the breakfasts in the morning. And the owner said, Hey, can you, can you look out for this while we figure it out? And, uh, instead of sticking around at the front desk, I put a nice piece of paper on the front or, or a print in a, in a frame. Along with, uh, a phone next to it and say, Hey, call this number. We'll be there within five minutes. and then I moved the booking, um, you know, the booking diary from a piece of paper to Excel and print, and I printed it daily and I went about doing other stuff around town, uh, and got paid for the responsibility as opposed to sticking around. Ironically, then. 25 years later, that's what we're doing by having a tech operated hospitality brand that doesn't have front desks. So maybe I was, uh, maybe I was cutting or lazy. I can't figure it out. But that was actually, that was early days. I was 13, 14 years old. But y you're right. I mean, my actual career took a very different turn. So I'm finished originally, but actually grew up in the UK and the us. France and, uh, uh, did a bunch of corporate stuff. Uh, latest worked in, in banking at Barley. And, uh, you know, to be honest with you, it wasn't for me. I'm this, you know, high energy, low, concentration, uh, typical entrepreneurial type. Um, and, uh, a corporate world was a very structured place for some, a person like that. Um, but it was a good school. and learned a lot of things. So was in the financial industry. So was it Barclays? Uh, in the latest turn of the career and then the tie was getting a little too tied around the neck. So moved back to Finland under the guise of a Master's. 'cause in Finland, not only is university free, but you actually get paid to show up, which is pretty, pretty, pretty crazy. You gotta graduate though, uh, and get the score, get the points, or you gotta pay back, which sadly I had to, but things worked out all right, because that was my, that was my facade. And, uh, I wanted to start a tech company. Uh, what I wanted to start a company and, and tech was obviously has, has been a big source of, uh, innovation and, and really center of attention when it comes to starting businesses. And obviously in the past. Past decades, so, and Finland has an amazing, uh, tech startup scene, uh, that really bats above its weight. We've got a bunch of unicorns coming out of this region and have had a bunch of unicorns. So anyway, so I went to that. So I've been a tech entrepreneur. Last company was a fitness activities marketplace, so North Americans might know ClassPass. Uh, we were a proxy competitor, so 15,000 gyms, yoga studios, rock climbing arenas. We raced 4 million Euros, venture cash, and it from Nordics to. The UK and the East coast USA and the tri-state area, and then eventually exited that business in 2016. So that had nothing to do with hospitality. Right. But actually, when I had that fitness activities marketplace, I started with an, uh, American dude. I went to college back at USC, way back when. And, uh, so I was always on the road and I was a startup founder, so I was broke, uh, needed to get some money, and there was this new platform, you know, circa 2011 that I'd just kind of gained popularity in Europe. called Airbnb and you know, rented my apartment when I was on the road and then rented my brother's apartment and then rented the summer house and then rented another apartment and got an investment apartment. So I had a little side hustle of seven apartments. So, whilst I was a tech entrepreneur, by day by night, I had this little side hustle of seven properties, and I loved hosting the people. loved showing. As a guy who's lived around the world, you kind of get like, I feel like peeps who travel a lot, lived in different countries. You become like a sober patriot to where you're from. You know, you, you appreciate the good stuff and the bad stuff, and you come very kind of like, I wanna show the good stuff, uh, for you guys. So I, I really enjoyed that. and yeah, so, uh, that was kind of the drumbeat that then eventually, uh, when I sold the tech company, I travel in Asia. Felt pretty burnt out at that point. Not, not to the hosting stuff, but the tech stuff. And, uh, ended up figuring out, you know, you know, hey, I can, I can, how am I gonna manage this thing, uh, when, if I'm in Asia, I don't have any employees, and you figure it out, six months of soap in a closet, chat based customer service, good to-do list, uh, for their, for the cleaners, and, and you figure out, okay, make it happen. The shortcomings of the sort of amateur hosting and, uh, and figure out if you were in control of the technology and the full stack, the, uh, you know, not just the technology, the hardware, software, uh, and the physical space. You could create something that wouldn't just match the expectation of the modern traveler, but for the traveler rate, looking for a hotel, you could actually exceed it in a consistent, and that's probably the. Adam Mogelonsky: So the whole term you mentioned earlier is this one called Lean Lifestyle and. That really ties into a lot of the programming that you would put in place from combining both design FFF and e and the prop tech and the, cloud tech that you would have there. Can you describe and unpack what you mean by lean lifestyle style? Niko Karstikko: I guess we, we probably throw around a couple of different terms in this industry and, and, uh, usually when we're talking to industry gang, trying to, trying to help anchor. But uh, you know, we can call it affordable luxury. We can call it lifestyle boutique. Uh, but really it's about, you know, The modern traveler is looking for something different than a traditional hotel can offer Airbnb, and that world has created this window of understanding what these people are looking for. We wanna live like locals, we wanna be independent travelers that feel like you're a part of that neighborhood. We want a chance to have a night in. We wanna have an opportunity to wash our clothes, all that stuff. So from a lifestyle perspective, the consumer taste, certainly in the sort of 20 to 45-year-old urban middle class have been heavily evolving, as witnessed by the proliferation of the Airbnbs and the booking com apartments in the TR, on mass. And so when people are looking for a, you know, uh, this kind of product, we are, we are, we. And unmask or, you know, re remove the horse flaps of what a three star or four star hotel should be. And really pick the best of the both sides best, best of both worlds in the experience of that. So, so Adam Mogelonsky: So within what you said earlier about this phrase called lean lifestyle, that is affordable luxury, it's, it's bringing together certain design features, FFF and e prop tech. Availability of cloud tech, all those things coming together to give a stamp of approval for an elevated experience. Can you unpack how Bob w meets this emerging trend? Niko Karstikko: as I mentioned earlier that the, the Airbnb generation has really grown know. We've all been there as active users, um, or, or, or most of us have been there as active users and consumers of the Airbnb type of experience. And, you know, we've, we felt the, the, the sense of. You know, do I, the classics hit or miss issues of a, of a fragmented industry? Do I trust the host? Do I trust the pictures? Yeah, I trust the pictures, but isn't in the ghetto. What about key pickup? Uh, will the washing machine actually work this time? and all of that. And like I've found in my travels, I ended up at the Hiltons and the Marriotts of world. Not because I wanted a hotel, but it was just like, you know, it was just too much work to have trust in. Okay. Like, am I gonna find the right apartment that's gonna satisfy the needs that I've got on the road? and so it was easier to stay at hotels even though that's when you were, you were looking for. Now the modern traveler on the one hand, through this proliferation of this has, has shown through the demand that. Desire, uh, for better value for, uh, this sense of living, like a local, this independent travel where you can have a night in and cook, or you can wash your clothes on the road. Um, you can be an authentic, uh, you know, genuine participant of a neighborhood, of a, of a city in a more, kind of different context. Combine that, uh, with, that's the good stuff. But then often this fragmented industry has let people down. Now as we've grown up and matured, what do you appreciate from the hotels? That's the consistency, the quality, the professionalism, um, the commercial grade, you know. the walls aren't made out of paper. They're a certain standard and that you don't hear the other guy doing whatever they're doing in the other room. Uh, and, and of course when you know you're buying, you get more value for your money. And, and when you know, you, we buy 50 couches instead of one or 50 apartments instead of one, you can have a higher design aesthetic for that same value of money, et cetera. So, so. The best of both worlds is again, from that hotel, the good stuff that's consistent. But then again, from the short stay rentals, the utilities, amenities, living like a local and hosting. Why hosting? Because anybody who's done enough Airbnbs knows that the best experiences that you've had are made or broken by a host, and almost always the best hosts. you know, that have created this amazing experience. By default, you don't actually meet them and to us. That was always, proof that you could have an amazing. empathetic customer experience a customer service experience that feels like somebody's there for you and is taking care of you, but you don't actually have to meet them. And for us, that always then gave us the, the confidence that we can actually then use leverage technology instead of people. to Create this host driven experience, and that's where the name Bob w, which is the avatar of the perfect host. He is, you know, he is in, uh, uh, he speaks languages. He's clearly well educated, but a, but a man of the people. Uh, he's super approachable. and unlike a normal host, he does not sleep. He doesn't need a lunch break. He doesn't call in sick. He answers your messages in less than two minutes. And if you've got a problem, you can always call him, or one of his colleagues is gonna be around, around the door. We don't need a front desk, we don't need a customer service layer or, or a a on on call customer service layer in physically in the building or front desk. to go with it Um, and so basically that, that really is when we had that aha moment, okay, we can create a whole new category of hospitality that's the best of these two sides driven by this hosted experience. And what does that translate into to the guest today? Well, that translates into having this. Uh, you know, lean luxury experience in terms of an apartment which has the, reward of a coming into a nice hotel. It has the utilities of an apartment, it has the full service, breakfast gyms, early checkouts, late check-ins, all available through the app. It has a great empathetic hosting hosted feel. Great customer service, mainly chat based. and it's got design that gets local that is based on sustainable local design. So you get local, uh, designers, artists, artisans, et cetera. And effectively it is a, you know what? You get Airbnb experience on steroids with unseen consistency. And I think that's really has propelled us to. Europe's best rated international hotel chain, uh, based on public ratings at 4.7 out of five. Net promoter score 76 or 77 last year. Um, and and that is really because it is that answer to the Airbnb generation that's growing up and. And we can provide. Finally, I guess we can provide better value for the guests. Why? Because we've got one seventh of the employees of a comparable hotel asking for a comparable nightly rate. Sixth, seventh is the technology, and yet as the ratings would prove. Um, you know, customers really feel the opposite of being alone, that they feel like they're being hosted and they're getting value for money you know, us probably speaks to a broader trend of we are having good product market fit for these, for that new generation of traveler. But also it speaks to this trend of, of. Unchain should be, and instead the customer problems. Adam Mogelonsky: There's a lot to unpack in what you just said, and I was astounded, blown away by saying that you can get away with one seventh the labor of a traditional hotel. That's, that's proof alone that that hotels all over in every single real estate. Whether it's commercial, multifamily needs to invest in tech to realize those opex savings. That's incredible. So bravo. And we don't need to drive, dive into the ip. That is part of, just how you operate and, and the technology play that you make that happen. One thing I do want to pick out is you're talking about consistency and consistency and trust. That is in essence what a brand is. Realistically here, what a brand is is also, its trust in the face of numerous choices, and that speaks alone to what we're seeing on the ground as a trend in 2025, which is that Airbnbs are traditionally alternative accommodations, but there's so much choice now that really they're just, it's the accommodation sector. They're more than traditional hotels, but we can't really recognize trends until in hindsight. So we know right now that we have this niche of people that want to be in short-term rentals. They wanna live like locals, but they also want the consistency and feel of a hotel within a service department layout. Where is this going? Where, what's next for Bob W where, where do you see the world going and how you fit into it? Niko Karstikko: Listen, I think there's a massive. consolidation and professionalization of the short stay rental space. Long gone are the days of early adopters, one of which, which myself as well, it was one of the coolest feelings to show up in, you know, la. And, and rent the dude's couch for 20 bucks. Not only was it great value for money, all of a sudden you're in the heart of it all and you got a local buddy who will show you, you know, how to get around town. That was like that aha moment of the early days of Airbnb. How I, I experienced it was well, was absolutely amazing. The reality today is that, you know, a big part of that stock is some ladies or some dude's third apartment, uh, with the cheapest IKEA stuff in there. Um, so it, and as this mass, like in Europe, there's over 4 million short sale rental listings. Last time I checked it was a bigger market for short rentals than, than actually in the us. Albeit that of course now, when a lot of short stays are going away from also city centers, you're seeing a, a, a that trending, people trending towards that direction as well. But the point being is, is we saw a massive. Proliferation of short stay rentals and, uh, uh, the early days, the early adopter days are long gone. I remember the early adopter days. I remember, you know, going to going to Los Angeles and staying at a dude's couch for 20 bucks and getting breakfast from him and having a bonus friend in town. Uh, I still, I still have the guy's number on my WhatsApp message. Few years, but I. Now, you know, with even just Europe's more than 4 million short stay rental listings on the platforms we, we have, you know, it's really this, this market has come to a level of maturity and now, as always, as markets mature, now the differentiation comes and, you know, some dude's third apartment with the cheapest IKEA stuff isn't commanding. The interest of the consumer anymore. So from an STR industry perspective, now is the time to start differentiating. Differentiating can be in very many forms. It can be more value for money, it can be quality, and can be our cases. Elevating that into a more hotel like experience. Uh, it can be, uh, you know, doing more unique stays. It can be adding services. It can be increasing consistency, which obviously is something we do. We are in a sector of hospitality that doesn't have standards. Therefore, it's even more important that our brand represents a standard and so I think this differentiate. Standards because brands equal standards, that can be delivered in many ways, but standards, nevertheless, those, those are massive macro trends. And third one is because there's been this proliferation of these alternative accommodation space, uh, this accommodation space, it has opened up the consumers. And the operator's minds that you do not have to operate the three star hotel in the way that it's always been operated with those horse flaps on thinking this is what it's gotta be because the consumer has opened up and shown they don't need that. So there's an opportunity for us to create new categories of hospitality, something that we've pioneered in this sort of hotel Airbnb hybrid, uh. Outdoor hospitality, uh, you know, consistent networks of, of individual apartments. Um, luxury budget, student social, communal, et cetera. There's a massive opportunity to now really, you know, remove those last bits of. What a hospitality should be. That is bygones of an era where mass standardization of hospitality happened. and that's not the reality we live in today. Uh, which is a great opportunity in the industry for, for everybody, for consumers, guests and, uh, uh, operators alike. Adam Mogelonsky: So I want to pick out two observations that relate to Bob W from my own travels. Number one is wherever I go, one of the things I love to do is I love to go into a local supermarket and just see what's there. I typically am not buying things because I'm staying in a hotel room and I don't have a kitchen. Number two is one of the limits I have on staying a longer time is that I don't have access to laundry, so therefore I can't do laundry. Therefore, eventually you run out of underwear and what those Niko Karstikko: Or you gotta pack a bunch of under. Adam Mogelonsky: Yeah, just in case, right? You never know. Um. so all the, these trends speak to what we call in hotel parlance. The metric is LOS, length of stay, and I imagine that you have the keys to the kingdom to speak to how Bob w punches above its weight or above index in terms of LOS. Is that Niko Karstikko: Yeah. Uh, length of stay is a, is an interesting game. It's hard to actually get it right from a revenue management perspective, but we see it as well. First of all, what's our average length of stay in, uh, European capital cities is 1.5 nights. We average about 4.5 nights. So it's still short, but it's three times longer than a hotel. Um, now in that bell curve, you can fit a lot of one and two nighters, but there's also some couple of week people for a couple of weeks, people for months. Our promise is you got everything you need to stay for days, weeks, or months. Um, we hold that true, not just consumer. Roughly speaking, uh, a little bit less than half of our business, 40 to half, depending on, uh, markets, markets where we're at. length of stay is important for us because, well, first of all, our product wants to offer you that flexibility. So if we were just one nighters, we would be failing on why we would have kitchens to be, uh, in the, have kitchens in the first place. We love it because that gives us flexibility in the distribution systems. So. Speeding in on the Airbnb type of world. Uh, we are also doing relocations. We are doing corporate travel, all of that stuff. So it gives our US flexibility because also our target demographic, the 20 to 45-year-old urban middle class, the modern traveler is looking for flexibility. They're gone for one night there, but they're gone for three weeks there, uh, et cetera. Um, so length, length of stay. Um. For us is about catering to that broader set of use cases. And then also of course trying to play a lot of optimization in terms of which clients do we wanna award the night that, that sounds pomp. We we're glad to have our guests, but, who are we gonna focus on? What kind of traveler are we gonna, you know, get November or Monday, Thursdays? And uh uh, we clean once per week. So, of course the theoretical perfect customer stays for six nights, which is still paying for nights, not weeks or months, uh, but still doesn't go through that, uh, that cleaning cycle, which would then, then, you know, mean we change your sheets and, and, and, and towels and all of that. Uh, of course it's always at the, at the end of the day, you know, it's GOP of your business, you know how much operating profit are actually creating there. But I think the main driver for us always has been is that we have the flexibility and the resilience, which makes us as a business, well first of all, having survived and thrived through the pandemic. Um, because the product works for somebody staying for four weeks that doesn't wanna see anybody else and, uh, doesn't want a front desk and wants to cook themselves. Uh. A piece in revenue management, which has been historically, um, neglected. Of course STR individual apartments, length of state plays a is a slightly different game to us that still has a kind of a hotel building, but you can play the Tetris game. Uh, so we actually build a lot of our own software out and we've got, we do a lot of analysis on, uh, length of state patterns. Length of stay, uh, on the booking curve, as in you get closer to the days you get. The last minutes are more for the few nights than the, than somebody who books Three weeks are likely gonna be a little bit more farther in advance. So we, we do a lot of analysis around that because that does, uh, reflect, uh, um, profitability. Adam Mogelonsky: And within that length of stay, we're talking about data analysis. What else do you see in terms of. What features are driving the length of stay extensions, the long, the extended stays. And can you tie that back using data to saying, uh, it was, yes, it was the laundry, the kitchen, but it was this third thing here that really convinced me to stay for 14 nights instead of seven. Do you ha are you able to run those sorts of analysis? Niko Karstikko: Yeah, so we, we've got 45 live properties. Three of them are hotels, which will eventually get conversion elements to it. Uh, but, but the rest of them are apart hotels. So we can also see some variance of where, we actually see, get customers to stay still in those markets, almost double compared to normal hotels. Uh, but that's got to do with probably, length of stay features are. You know, are gonna be driven, like you said, with the basics, with the, with the kitchens, washing machines, dishwashers, everything. You need to show up with a backpack and stay for days, weeks, or months. But actually we, we are the only provider at this scale who has a marketplace of breakfasts, gyms, early check-ins, late checkouts, additional cleanings. So we were the first one that introduced. early check-ins, late checkouts, for example, fully algorithmically. So we can promise you eight weeks in advance to get in at 9:00 AM or the morning of at 9:00 AM if you're last minute doing it because we can play, uh, we can play that, that te game of operational te game and, and count the averages basically. from these features, what we've found, and partially also while we continued to develop them, is our breakfast and gym. Now again, we don't have restaurants in our building. Never do remember my last startup was a fitness activities marketplace, an app and a third party gym, local gym down the road or, or a yoga studio. And that was always about how do you create this amazing experience that feels like it's a natural part of the app or the, the service, but actually there's no integration because the systems are all so different. and so we are the only ones that offers from, uh, you know, these, the breakfast and the gyms. and overwhelmingly corporate customers wanna put breakfast on the company card. Now try to get an apartment where there is a, just about any market in Europe where there's a breakfast on offer. Those are far and few. And then when you combine that with a gym as well, which we find again, we are 20 to 40, uh, you know, 20 to 45 year middle class, this is one of the most active generations, the most health conscious generations. that We are dealing with. And as we spend longer time on the road, we want routine to continue on the road. I mean, if we behaved like our dads behaved when we traveled on business trips or, or, or holidays for that matter, we'd be way boosted up. Huge tummy, you know, broke 'cause we, you know, partied too much and had too much, uh, you know, souvenirs. We had to bring back home every time we, we, showed up. Nowadays, life continues on. So we always have, again, no gym in our building. We have a local gym partner within 500 yards, 500 meters of the building. And I guarantee you it's a better gym with real local people, uh, compared to a hotel gym, uh, in just about any case, uh, uh, except for maybe some super top five star fitness orientated, uh, hotels. And that those two features has surprisingly been for this length of stay and a really important factor. 'cause who wants to pay for breakfast themselves? If you can chuck it on the company card. And the other one is you wanna continue your routine going on the road. So, uh, we have always gyms included in the price. It's a real gym. And then we all actually have, uh, yoga mats and complimentary online yoga studio. And we see that those in a way simple routine things really go a long way. And the fact that our competition be that apart hotel or other tech powered, uh, uh, operators or, um, individual apartments can cater to that. So if you're filtering an apartment, you shit outta luck with all those extra services. Adam Mogelonsky: You're, you're preaching to the. Choir is somebody who is a big wellness advocate, and fitness is a big part of that. And I gotta say, I've, I've been to a lot of hotels and you go down to the gym and it is like, they haven't changed anything since 1975. And, is doing a disservice to that. And you're, you're spot on about how. Younger people have different values and they want to stay active while on the road. I can't speak for, to say that that's a hundred percent of people, but there's enough of that, whether it's a niche or just mainstream, there's enough of that to carve a very successful worldwide business out of it. Niko Karstikko: I think we, we all in hospitality need. To look out for our differentiators, and I think that's, that's, that's our thing. But it is a massive macro trend, and I, there's a lot legs on it. Uh, for, for concepts outside of ours, Adam Mogelonsky: Right. So we've talked about the opex. Now let's just to dovetail this, let's shift into the CapEx because getting to 45 properties and then I guess a total of 85, including those just under management, Niko Karstikko: uh, 85, if we count the. Adam Mogelonsky: right? Uh, so 85. Including the pipeline since 2019. That is huge. Scaling. What, what's your CapEx structure and how, how did you do that initial cap raised? let's start with the cap raise and then, and then talk about the trials and tribulations of, of going through the development and, and building conversions. Niko Karstikko: so, uh, today we've raised 70 million, uh, euros. So I guess that's, that's, uh, USD pushing, pushing 80 million bucks and, uh, um, a little bit less than that. Um, so why have we managed to. Get so much growth capital on board is, uh, we, I mean, we do triple the margins, uh, compared to a traditional hotel. We have one seventh of the employees, which also means that our, Initial work, initial upfront cost expansion is minimal. We recently, well, not recently, over a year ago, we expanded to, uh, Amsterdam with two properties, 128 units, and the other one 30 units. We hired three people, uh, three, three great people, but three people. Now, if we, if we were a hotel chain, we would've built two teams, uh, two GMs, and. The technology allows us to be able to move so much lighter, that our CapEx costs, born by our own activities, not the actual directly the building itself, uh, are minimal. And that of course was the initial investment in the technology. Um. And, you know, and then, you know, we first opened Intel and then Helsinki and then we opened and we figured, okay, nobody's gonna invest big money in us 'cause we're in the periphery of Europe. so we thought that, screw it, let's try to find properties in the biggest, toughest markets in Europe. So we went to Madrid and London and, and pounded the pavement for six months and found our first properties in London and Madrid. And as well, now we have the two mega cities of Europe. Let's, let's roll with this. and we're able to show that the metrics, uh, the, the performance as well as the reviews or the financial performance and the reviews was able to not only just keep up, but continue beating the market from, from that perspective. then in terms of our cost, of course, early days. Landlords are like that. Who, who the hell are these guys? Uh, like, uh, you know, a guy who hasn't done any real estate or hospitality and, and my dear German co-founder Sebastian, who's this sort of German stereotype on steroids, and, and he, he is, uh, uh, but, but, you know, hadn't been in the hospitality space. He was a finance background guy, an operational real estate background guy. But, you know, early days. This is the big barrier of entry into our industry, especially in the commercial properties. Every borrow we want just wants the McDonald's or the Marriott because they've been around for a hundred years and they'll be around for another a hundred years and they'll pay the rent or, or, you know, make sure the management agreement gets, gets the returns that they need to get. Our CapEx cost initially was of course through the roof because nobody wanted to help pay for the renovations and they didn't wanna pay for the furniture and all that stuff. Um, and then you, then they wanted big deposits from us, um, and that, so the initial, um, first buildings were very expensive for us. Of course. Then the pandemic happened and there was, uh, the, uh, you know, first everybody was kind of holding steady in Europe for one year and not really transacting. And then the ones that really wanted to or needed to transact, we were, we were the first ones on the market. 'cause we're like, Hey, if we're gonna survive the pandemic, we're gonna thrive after it. But we were actually looking for, properties very actively when most of Europe and the hospitality space was kind of not doing that. Um. And then, then we, so we got a little bit maybe better deals at that point in terms of upfront CapEx cost and then, then eventually we've just been able to re replicate that and have that track increased track record and that success and commercial viability of the business. You know, we've reached profitability despite doubling our size. Uh, we've at least doubled our size every year for the last, uh, five years. So, uh, largest annual growth was eight x revenue. And, uh, and you know, we've done that now and reached profitability as well whilst doing that. Uh, so now I would say the tide really turned from, from a CapEx perspective, but only, only like two years ago, where all of a sudden all we gotta do is show up with a bank guarantee, uh, for the most part. And, uh, landlord is comfortable to, to take over that cough of refurbing and furniture and all that. Adam Mogelonsky: Yeah, I, I mean, it's, um, you've put in the work, you, you ground it out, you bootstrap. To now you're a known commodity and people understand the business model. Niko Karstikko: and there's of course a macro trend, which helps. So let's, let's not just give Bob, Bob, uh, the only pat in the back there, even though he is done a, he's done a good job, is The other one is, is just. Commercial apartments, call it service departs apart hotels, multifamily, that is just the most booming macro trend in real estate in the western world. And, but it's missing players and that's where, that's, you know, luck favors the prepared mind, but somehow we, we, got lucky and ended up at the right place at the right time. Adam Mogelonsky: Okay, so 85. Place is 85, Bob Ws, including current and in in the pipeline. Is that all in Europe or do you have global ambitions? Niko Karstikko: Now, of course we have global ambitious. Eventually we'll end up to Mars as well. But, uh, but I think we're a few years away from development there. Uh, still gotta figure out some logistics. Um, but, but, uh, no, all, all jokes aside, you know, our companies, uh. Vision is to be the most loved hospitality brand for the next generation of traveler. We are well underway with that, with Europe being being the best rated ho hotel operator in best rated international hotel operator in Europe. Um. But it is just a DR. 5,000 units or, or I guess we're closing 5,500. That's just a drop in the bucket. I mean, what? What's Marriott? At 1.6 million and that's the massive opportunity in the short stay rental space. It is fragmented as hell. We are the pioneer. We are a market leader in our space on the entire continent. We are small fry still in the grand scheme of things, the there is room for the next generations of Hiltons and Marriotts in the short stay rental space. And the better news is there's gonna be even more flavors. So there's gonna be the out next Hilton of the outdoors and the next Hiltons, the Marriotts of the, you know, of the urban, urban offering and all that stuff. So that it is a massive opportunity. Um, so for us. The next one to two years is still really, uh, pushing heavy on Europe, but also simultaneously starting to make inroads to North America, Southeast Asia, middle East. Adam Mogelonsky: Awesome. And now I'm wondering, I guess just to close things out, is there anything important you want to touch on or anything you want to talk about in terms of future trends and how Bob W's meeting that demand? I. Niko Karstikko: I think we, we, we covered a lot of these. the main themes. I think the one thing we didn't cover is sustainability. Um. The, you know, it, it gets lost now with all this global, um, political turmoil that, that we're seeing now. But we are in the middle of a climate crisis. We are, also, to a certain degree neglecting that the younger generation is far more militant about fixing this than our generation is. Since as STR space, we don't have the legacy that the inevitable physical built world of the old Hoch hotel chains has, so that we have the responsibility, but more importantly, we've got the opportunity to really do something differently in terms of, uh, being a more sustainable sector of the industry. So we, we became the first climate neutral hospitality operator in 2020. Uh, we run a hundred percent renewable electricity across the board. We, uh, we have, we have over 30, uh, 30 initiatives in the company to reduce, to factually reduce, uh, our. We have fully offset our, our, uh, emissions, which of course is paying for your sins. So let's not give too many pats on the back of that. But importantly, that requires measuring, uh, your emissions. And that's the important part. Nobody ain't gonna bring it down and improve it unless we're measuring it. Because, if we're not doing so, we don't know where to start and where to improve. And did our actions actually have any meaningful change to that? So we, we felt this way for now, for, for five years. So we've actually, we publish, republish, uh, the. Guest night emissions. Well, first of all the numbers, but guest night emissions, not just down to the building, but each apartment type, so you can compare. Compare our studio to our two bedroom apartment and our emissions scope one, scope two, scope three to oversimplify all of the emissions. And why do we do that? Because the modern traveler cares about sustainability. Now, if you care about sustainability, just like let's say you care about calories. So if Adam, I give you two chocolate bars, one has, uh, uh, all being the same. This one has 80 calories, and this one is 120, and you care about calories, you're gonna want the 81 Now. If consumers can't make educated decisions and they're just, uh, dependent on nice adjectives, which is not gonna give you the understanding, uh, you know, we are as an industry are not gonna serve the needs of the modern traveler, nor are we not gonna engage in this positive competition to actually bring down those emissions. So, uh, so you know, if you care about, you travel and you care about price, you care about location, you care about design, you care about it as a pool, well, if you care about sustainability, we should have a simple metric that we can all get behind with Now. We did not find an all-encompassing metric in the industry, so we built our own, it's called the legit standard, L-E-G-I-T. Uh, you could read about it from our website and it'll, take you towards, towards the, the, the association website as well. And that was just to be the all-encompassing number of a per guest night emission, just apples to apples. I think the call to action is, is that, you know, this is a great opportunity for this part of the hospitality industry that doesn't have the legacy to do the right thing, which is going to end up in our favor and give us the ability to get the trust from the modern generation of traveler, which by the way is great, uh, has great economic viability. Recent gift reports clearly show that consumers, particularly sub 40 year olds, are more than happy to spend extra to do, to make the sustainable choice. So I guess that's the trend and, and if I had a call to action that is measure. You know, like do the accounting of the emissions as an operator, and let's start publicizing. Let's start having an apples to apples metrics. Nobody's perfect. We ain't perfect, but we sure as hell, feel confident that the consumer deserves to know. Adam Mogelonsky: Yeah, the first comment I have is the old. Peter Drucker adage, you can't manage what you don't measure. That's number one. Number two is I think we're all or most people are underestimating the sea change that's happening with the young generation, how they view climate change and all the weird weather events that are happening around the world, and what's coming with that sea change when millennials and Gen Z are the largest voting block together. Um, and, you know, dare I say it, but there, this weird weather will re will get weirder. And, you know, one day it's, uh, one day it's, it's a German town that gets wiped out by a, by a weird flood. The next day it's fires in Los Angeles. what is tomorrow gonna be? And the weirder and weirder these events happen, the more likely people are to vote with their wallets for sustainable choices and looking for brands that. Have that consistency and that trust that they're going with a Net zero partner. So again, you know, uh, hats off to, uh, to Bob w Niko Karstikko: Well, I, I think, you know, nobody's perfect in this space and, but we have an opportunity to work together Adam Mogelonsky: Yeah. It's the process and you're, you're not getting mired down in bureaucracy. You're making things happen and improving to be net zero. And then eventually maybe there'll be, you know, carbon positive where you're actually reducing the total carbon that is the leftover of 50 years of, or a hundred years of industrialization. And That's really what we're talking about. Yeah. March. March, which we just, I guess we're in April now as we record this March was, uh, the, the, by far, the warmest march in the record, uh, of, of the planet. So, you know, I mean. Whether you believe in science or not, it's a, it's a different thing. But, uh, one, one thing's for sure is that the climate is certainly changing. Niko Karstikko: And as a result of that, uh, uh, you know, if you've ever seen your ice cool in your glass when you're sitting in Florida, uh, on a, on a sunny beach, well that same thing's happening to all the ice caps and eventually, um, it's gonna, it's gonna rise, uh, rise the temperature. So, uh, but, but we're not here to tackle the si science part of it. The generation, younger generation of traveler cares about it, and it's time for us to start meeting that need. Adam Mogelonsky: And, uh, you know, thank you for addressing that. And of course, you know, it's just another part of the, of the, the special sauce that makes Bob w such an incredible brand. Niko Karstikko: I appreciate you saying that day by day, the product's never finished, so we're gonna keep at it. Adam Mogelonsky: Well, Niko, thanks for coming on the show. It's been fantastic to have you. Thank you. Niko Karstikko: Thanks for having me, Adam.