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The Secret to a 65% Repeat Booking Rate with Encinitas Bungalows · Hospitable Hosts

• Miles - Hospitable: Hello and welcome to today's episode of the Hospitable Hosts podcast with me, host, Myles Hobson. Today I'm speaking with hospitable host Keith Clark, who is hosting out of San Diego. Keith does something pretty unique. He actually meets all of his guests in person right at check-in. And today we're going to hear why that's driving a ton of repeat guests for him. If you enjoyed today's episode, please don't forget to like, share and subscribe. Thank you so much for listening to today's episode of the Hospital Hosts podcast. If you enjoyed today's episode, please don't forget to like, share, subscribe on your favorite podcast platform. Hello Keith. Thank so much for joining us today. Keith: Thanks, good to be here. Kind of fun. Miles - Hospitable: yeah. So, I mean, I'm glad to hear, Keith, that you are also a listener of the podcast as well. We were just chatting before. So it's nice to have a listener on ⁓ to part of ⁓ the not just the audience for a change. Keith: Yeah, no, it's it. I'd like to educate myself when I can, usually driving in the car. So I listen to different podcasts, but yeah, the hospital once popped up in my feed one day. And so, you know, I listened to those when we get them. So yeah, it's kind of fun. Miles - Hospitable: Great, awesome. So obviously, Keith, today we're here to kind of talk about your experience as a host. I know you're using Hospitality yourself. Maybe you can give us a bit of an introduction into you, your business, whereabouts you're hosting, whereabouts you base personally, just to kind of kick us off and set the scene for us. Keith: Sure. So I started this business about 11 years ago on a whim. A friend of mine said you should get into the vacation rental business. And I didn't know anything about the business at all. And I was actually going to Hawaii. And I'm like, I'm going to rent a vacation rental. And so ⁓ I got on the back at the time it was Airbnb and Verbo and I got on the Verbo site and I started looking at properties in Hawaii that I was going to rent. for my family and everything was horrible. It was like, God, I can't believe they put these furnishings in there or this or that. And I literally found nothing I could rent and I ended up staying in a hotel. And that summer that the next month I bought a property and the intention was to convert it into a vacation rental. And because I had no vacation rental experience, I just said, I'm going to outfit this place the way I want it to be as if I'm traveling. And so I put in, you know, phone chargers. I put in a Vitamix blender because I like to make smoothies every day. I put in like nice appliances, just quality furnishings, quality ⁓ bedding and built a business having no idea what the business is like, never even staying in. vacation rental, but I built it knowing what I like when I travel. And ⁓ I started with a duplex and I had one property and one of them I was doing a long-term rent on to kind of cover my expenses. And then on the other one I started a short-term business and that year I got my first booking, you three months later, you know, and then slowly started building a business. And then the next summer I converted the other unit over the short term. And then I pretty much just had these two units and I managed it myself. And I would meet every guest at the property and kind of get to know their story and see where they were from. And I had multiple guests that would just stay with me and they're like, all right, I'm coming back next summer. I want these days or, you know, block out this, this month in the winter. And we started this personal relationship and it just kind of evolved on its own. And then. I had some tenants that stayed with me five years in a row and they said, ⁓ Hey, we're thinking about buying a second home and they lived in Arizona and they're like, when we're not using it, do you think you would want to rent it out for us as a vacation rental? And I'm like, well, maybe I go, here's the deal. I run it my way. You furnish it. I'll run it my way. And. We set some minimum prices and we figured out a management fee and we started a partnership and right away filled it up. And so then the house next door became available and ⁓ they bought that one. And so now I have four properties and and they're all within a block. They're all four within a block of each other and things are going well. I filled up. I filled up their property right away. It was bigger. Mine were two bedroom. Those were three bedroom and got a really quick loyal following. And so my partner's like, okay, I want to buy more. I want to have like 10 of these and I've got a regular nine to five job and I'm just doing this on the side. It was kind of like, it's going to be my retirement gig, you know? And ⁓ so we're shopping for these other properties and we find a fourplex, four bungalows on a lot. And we ended up buying that and converting that. And we convert to do two long term and then convert to the short term. start filling those up. And then, you know, now this business is kind of moving a little more and I'm like, I'm spread really thin. I got a regular job. I'm meeting guests. I'm doing all this. So I ended up hiring a friend of mine to become my frontline person. And her name is Stacey and our, our websites, Encinitas bungalows.com. And you'll see Stacey and I are. our pictures on the site and she meets every guest. So I kind of do all the back of the house stuff and she does all the front of the house stuff. So she meets every guest now where I used to do it. She does it now, or if she's traveling, I still do it, but she's kind of a stealth salesperson. So my, my goal in this business was to apply what I learned from the software business. So much like hospitable, you guys have recurring revenue. You have ⁓ a subscription model, you pay so much a month, you have different options you can put on it. And when you look at your book of business, you know kind of what, how many people are going to renew and going forward. So I applied software principles to my business and what I was looking for is retention of guests. And so I was looking for guests that were coming to the neighborhood for either a family vacation, they've got kids in the neighborhood, you know, their grandparents and so on. So I wanted to build a relationship with those guests and make sure they know about all my properties and give them the ability to deal with us directly outside of the OTAs. And because most people hate paying higher fees, know, they just like a fun traveling, I want to pay the lowest price I can. And my guests are exactly the same way. And so, you know, we kind of built this business with the thought of recurring guests coming back. And so We're basically screening every guest and we're looking for people, you know, because we accept instant book, you don't know what you're going to get, but we meet every guest and the reason is we want to size them up. Why are they here? Why are they traveling? What is, ⁓ what's their purpose here? And then once they understand our product and what we have and saying, we now have a website that has 10 properties on it. And so You know, someone says, Hey, I'm looking for this week and they know my property and all our standards are the same across the property. use the same linens, the same bedding, same kind of amenities so that everyone kind of knows what the experience is going to be at one property and take it over to the next property. And so as we've expanded, ⁓ we've had to like change how we do things. You know, we had to make sure that we've got all the, all the right stuff in the, in the places. So. If a guest was at one place and they had to move to another place, it would feel the same, even though the location was different. ⁓ But yeah, that's kind of sorry. That's my long back story about how I got into this business. Miles - Hospitable: No, I love it. And I love that you've kind of kept it so people centric, as you say. I think a lot of businesses are moving away from that kind of, or moving towards, sorry, the come on, or like a contactless check-in, right? And you're keeping that one-on-one kind of interaction. And you said there about kind of almost screening the guests in person as well, right? Is that so, you you basically deciding who you're gonna invite back to the property, who you're gonna encourage to direct? Keith: Yeah. ⁓ Yeah, it's kind of interesting. So we're definitely, we definitely have a profile of guests that stay with us. It's either older couples or younger families with kids. And because we allow pets, ⁓ that's changed the business as well. We've always been pet friendly. And what we've, what we've found is that people that travel with pets that are truly on vacation or traveling with pets, their pets are actually pretty good. They're not crazy wild. ⁓ Miles - Hospitable: review in the future. Keith: Because they're travelers, their pets are travelers. So they kind of get it. And so we kind of added that into our property. What trips us up and why we size everybody up is when we get local guests staying with us, their houses under construction, they had a water leak. Those guests are very, very different than traveling guests with pets. Those guests are more like entitled in staying at the property and treat it. much, much harsher than traveling guests. So when we're meeting people at the property, we're definitely meeting every local person. I mean, for sure. Any one of the pet we're always meeting and make sure that they understand, hey, we want you to pick up your pet ways. Please keep the pets off the furniture. We give special pet blankets we put on the furniture. Because we want it clean. Like our cleanliness standards are really high. Our cleaning fee is high and our standards are really high. And ⁓ we pay out most of our cleaning fee to have it clean. We want it clean. And people appreciate that in our properties. That's the number one thing that people say when you look at reviews. like, yeah, it's clean. It looks like the pictures. It's appointed. If anything's run down, we fix it right away. Anything's broken, we're there. As stuff runs down, we schedule it to be replaced and things like that. ⁓ But yeah, so we really want to meet them and understand that they know our rules. So if they're bringing a pet, hey, this is what we expect from you as you're bringing a pet. And we're looking for that repeat guest. currently about 65 % of all of our revenue is repeat guests. So that to us is huge. Like I look at my bookings for next year and I'm already booking next winter right now. Like I've got guests right now that are staying. You're like, okay, these are the dates I want next January, February, March, block these out. and, and we, do all this stuff in advance and it's a testament to what we do is that we are a customer centric business. We've, when I'm on the phone and I'm trying to reach a live person and you get stuck in automation hell, Miles - Hospitable: Hmm. Yeah. Keith: where it's just an AI voice and you can't talk to it, you just want to get a person, that drives me nutty. And I just want to talk to a person. And I think in the vacation rental business, guests are looking for that same experience. They're not used to it because nobody does that. But we do it, it sets us apart. And it's the personal connection and hearing the stories of where someone's from and where they're traveling to. Miles - Hospitable: Hmm. Keith: that makes the connection because we're all travelers. We're all going different places. We want to know what's the cool place to go to go get coffee or, you know, a happy hour special or something like that. So we, we share that information with our guests. want them to live like a local in our property. we're in Encinitas, California. It's a part of North San Diego, Southern California. and it's a very much a tourist destination. Miles - Hospitable: Yeah. Mm-hmm. Keith: I get to live here, so I'm super lucky. As I travel the world, I come back to San Diego. It's like, I love this city. The city's amazing. Every day, you're looking at the beach or whatever, and we're just a block or two from the beach, depending on the property. And so ⁓ it's a great place to live. It's a great place for people to come visit. And we're looking for those guys that keep coming back and come back again and again. Miles - Hospitable: Mm-hmm. Nice. And tell me a bit more about the properties. ⁓ So obviously, they're all quite close to each other. The majority are because they're local. But do you do much kind of differentiation between the properties? ⁓ Or have you kind of got kind of a consistent style in how you furnish and kind of the amenities that you have across the board? Keith: Yeah, because we have different partners. And so I, I load a partner, someone who owns the property and then myself and Stacey, we manage the property. personally own two properties. I have one partner that owns six. have another partner that owns one, another one that owns one. ⁓ when we took on the properties, we're like, okay, love your furnishings, but Hey, this is what we want for bedding. This is what we want for towels. This is what we want for amenities. You know, we want an espresso. We want a K cup machine. We've got certain. Miles - Hospitable: Mm-hmm. Yeah. Keith: standards that we want to offer at every property because people have people you know people are expecting certain things when when they ⁓ when they stay with us ⁓ but the location we've got four in Cardiff so Encinitas is the area Encinitas is three four towns together we've got a south part of Encinitas called Cardiff we have a north part of Encinitas called Lucadia and then we have Encinitas proper so we've got four in Cardiff all within a block of each other, four in Lucadia, all on the same piece of property, which is kind of cool for like a family or a group of friends coming. They can, they can reserve multiple units and all be in the same compound. And then we have two longer term stays, kind of 30 day type stay properties that are in Encinitas on the other side of the freeway in California, Southern California. The five freeway kind of designates. where your properties are. If you're west of the five or east of the five. So we've got most of our stuff is west of the five and then a couple of properties that are east of the five. And those are longer term rentals and two fantastic properties, just really, really cool. Very different from our beach type properties. ⁓ But really popular with guests. mean, like higher end, nicer furnishings, ⁓ more space. You know, at the beach, you're always really tight on space. When you go on the other side of the five, you have a little more space. So yeah, kind of makes it nice. Miles - Hospitable: Yeah, that makes sense. then obviously, it sounds like you're delivering a fantastic kind of personalized experience. Are there any other ways that you're kind of encouraging people to repeat book, to have such a high repeat book rate? Are you doing any kind of special offers to encourage them to come back, special upsells for free kind of thing? How do you encourage that activity, or does it just happen organically? Keith: Yeah, it's kind of it is very organic. So because we make that connection with our guests, so we don't, you know, we send them an email that says, hey, welcome. We have a guest guy. We use touch, stay. ⁓ But we stay in touch with them via text and we do a newsletter like once a quarter, just kind of like, hey, here's what's going on. We added this property or that, but it's not encouraging to book. We're not running promos, but we encourage all of our guests to look at our calendar. to reach out to me directly if they want to book, they're coming in short notice, last minute. ⁓ We want to be as flexible as possible. We want people to be able to book direct. And so we even do something really unique in that if someone has stayed with us before, stayed through either booked it through Airbnb, Verbo, through the hospitable direct site, they can come back to us and just book direct with us as long as they're comfortable sending us Zelle or Venmo for the payment. they can just pay us direct. We don't do a security deposit. We don't do anything else if they've already stayed with us because they've already been vetted. They've already stayed. We know what they're like as a guest. Just as much as we're rating them, they're rating us, right? And so we, like I say, we're always focused on the bottom line. We want people to be able to pay the lowest price. Some people want to use a credit card. We're like, great, go to our hospitable site, book there. You can use a credit card. You get insurance. You get all this stuff. ⁓ But most folks are really looking to spend the least amount they can. And so they come and just contact us directly. we'll do like we never charge add-ons. The one thing that I've always done in this business is I wanted to connect with my guests as if they're my friends. Well, if your friend wanted to stay with you, are you going to charge him $100 to come early or $100 to stay six hours later? No, you just wouldn't do that. It just wouldn't be. wouldn't be a thought. You say, but let me see if I can work with my cleaning crew. If it's ready on time, yes, please come check in early, you know, or if it's, we can clean it a little bit later. Your flight's at two o'clock, let you stay till noon. No problem if we can do it. And so we, we encourage those types of things. It's non-standard, but it sets us apart from everyone else. I'm not looking for transactions. I'm looking for long-term guests that want to stay, that want to come back. and want to be treated fairly. because of that, you know, I'll tell you, I had a guest, I think maybe they're in their six or 70 or staying with me. The very first day they negotiated with me on the rate. And they're like, you know, I'm going to stay for 60 days. Can you give me a better rate? And it's, it's in summer, which is my best season. Summer in San Diego is our highest season. get our most money. And I'm like, you know, I've got a monthly discount. Miles - Hospitable: Wow. Keith: I do a weekly discount, I do a monthly discount. And so I gave her a little bit more on the monthly discount. And the reason why I did it is, and I've done this a number of times, when people see our product and they see what we're about, they never have a problem the second time paying full price. Never. They never like, it's really rare when they negotiate on the second time. So I'll negotiate on the first time if it's within my constraints. I know what my break even costs are on every property. I know what the numbers are we're trying to hit. And if I can make it work, if I think it's the right kind of guests, we'll negotiate and then prove to them that we have value. And all those guests that negotiate, they always come back and they're like, yep, no problem. Done. And that's, that's an interesting thing in itself. You know, we even take that one step further. ⁓ we use a dynamic pricing model now and we basically have three seasons. We have low, have medium, we have high. And we use a dynamic pricing model to fill in the gaps, right? You know, as stuff is further out, someone's on Airbnb or on your site, whatever they find us, they can just look at it, book it, and they pay that price. When they come back and stay with us, they get a rack rate. So my summer rate might be $5.25 on a property and they may have paid $6.50. Miles - Hospitable: Yeah. Keith: on that property that summer, because that particular day was at a high demand. And so we tell people when you come back, no, no, no, you get our preferred rate. This is our summer pricing. You get that. ⁓ And so there's a lot of incentive for people to just stay in touch with us. Say, Hey, I'm looking at these days. You know, can you what's, know, what's the rate? Right. And the other thing we'll do that ⁓ that's kind of unique is we have four, five, six day minimum stays in our property. Some properties are 30 days, but let's say I have a six day minimum and I've got two blocks, two six day bookings are there and there's three days in between or there's four days in between. We'll of course change those minimum nights or if the gap is bigger and I have a regular guest that wants to stay like two nights or three nights, as long as they're okay paying the cleaning fee and it butts up against another reservation, we don't... we'll take the reservation, even though it doesn't meet our minimum, because I know I won't have a gap. I won't have a one gap or two day gap there. And so I'm flexible on our minimum nights when they book up against the another reservations that that's there. I have a better chance of keeping my calendar full. And because of that, we run about 80 in the high 80s ⁓ occupancy rate in our in our long term, in our short term rental stuff and our long term rental. Miles - Hospitable: Nice. Keith: The rates a little lower, ⁓ like in COVID was crazy. We were running 95%, 96 % occupied. It was, it was nutty. Like we would have a cancellation and someone would rebook like within minutes. And it was just, that was a crazy time, but usually we're in the 80 percentile range. And ⁓ that's kind of our goal. Our goal is like kind of 85%. That seems like the maximum you can get on bookings and still be able to repair stuff and, you know, keep the turnover in. Miles - Hospitable: Yeah, that makes sense. Awesome. So I think maybe just one final question. So obviously now you've gone up to, you you've gone from one property to managing 10 and you're still keeping that personal touch in there. I know you've now hired someone to help with that. What do you think has been the greatest struggle with kind of keeping that personal touch and really being on it with the whole strategy and communication across 10 properties at, you know, 80 plus percent occupancy? Keith: Yeah. Miles - Hospitable: Like how have you managed to keep everything in check and what's been the most difficult thing to kind of juggle, I guess, ⁓ as you've grown. Keith: Now, yeah, the personal connection is the hardest part, right? You know, and if I was to scale the business up further, I figure Stacey and I can probably handle about 15 or 20 between the two of us. And then we'd have to add another person, but the, never want to give up the personalized touch because that's what really sets us apart from other folks. You know, we're not a transaction company. We're looking for those guests. So that would be the hardest thing to scale up. Miles - Hospitable: Mm. Keith: Our cleaning crew standards, we have a setup book that our cleaning crew uses and it shows you photos of the living room, how we want it, the kitchen cupboards, how we want it, the bedding, how it should be made. so the cleaning crew cleans it and then Stacey walks the property before the guests gets there. And she makes sure that, these pillows are this way, this thing. shouldn't be in here in the cupboard. It should be over there. And just, I look at our properties as a product. I want my product to be the same every single time. And someone comes in, they know where the blender is. They know where the silverware is. And it's going to have that same formula. It's not going to be open a cupboard and you got mishmash of bowls and stuff. Everything's labeled. Everything's clean and neat. It's like, It's for the OCD. If you're OCD, you stay at our properties, you're like, oh my God, this amazing. I've had, I've had guests that tell me they, okay, I went home. Don't laugh. But I labeled everything in my house and put it like dinner plates are here. Salad bowls are here. And it, helps our guests when they're there to be able to put things away. But if you can set your properties up in that way, you can scale really easily. Right? If you have a system in place for how you do things, you can scale it up. So yeah, think, you personally, to me, this is my retirement gig. You know, to me, this is a fun business and we make pretty good money at it. You know, if I wanted to take it and really scale it up, I'd have to hire more Stacey's out there to go meet them in person, but I'll never give that up. It's just like, I think that's what sets us apart from other rentals. And we have guests that tell us, like, I've never met a person at, at an Airbnb before. It's like, why do you want to meet us? We can. Miles - Hospitable: Mm-hmm. Keith: plunge in the door code. We're like, well, we just like to meet every guest and just make sure they get in okay. And make sure they know how to operate everything. You can't, I can remember staying at a rental and it's like, couldn't figure out the TV. It's like, I can't figure out how I even get this thing to where I want it to be or the air conditioner. can't get this thing to work right. How do I do the settings? So we have little videos made for every one of those things, but we also meet them there and say, Hey, let me show you how the air conditioner works. Cause you're going to want to use this. And that, those few moments of showing people what the property has really makes a difference. And we've had people say, ⁓ my God, thank you so much for meeting us. I didn't understand the value of it. I've never done that before. And it really reaffirms what we believe that this business is a people to people business. It's not a transactional business. And ⁓ it's just like if ⁓ you go to the four seasons, they meet you in person. The concierge is there. It's like, hey, how are you? Miles - Hospitable: Hmm. Keith: We want that same kind of feeling where you're important and you feel good. You're like, make a connection there. You don't make a connection with a lock box or a door code and a paper manual on the table that says these are the do's and don'ts. So, yeah, that's, that's really what sets us up. Miles - Hospitable: Nice, I love it. Well, it sounds like you're really enjoying it and also you're doing a fantastic job. So it's great to hear, Keef. Keith: Thank you. Yeah. Awesome. Thanks, Miles. Miles - Hospitable: Well, thank you so much for speaking to us, Keith. Appreciate it. Keith: Cool. Thank you.