Latest / Reframe First / Michael Snyman, CCO at Alloggio | Scaling Short-Term Rentals

Transcript

Michael Snyman, CCO at Alloggio | Scaling Short-Term Rentals · Reframe First

• Oleksij Rak: Hey guys, welcome to another episode of Reframe First. I'm Alexey, the host of the podcast and let me welcome our today's guest, Michael Steinman. is chief commercial officer at Logio Group. So hi, Michael, great, great having you. Mike Snyman: Thank you very much, Lesky. Thanks. Looking forward to the next couple of minutes and having a chat with you and your listeners. Oleksij Rak: Awesome, awesome. Thanks a lot for joining. So what ⁓ learned, ⁓ is a leading operator of short-term rental accommodations in ⁓ and also partially in New Zealand. also from what I learned, you operate kind of on both ends of the spectrum. So on one end, you serve the end clients and visitors. On the other end, you're managing properties. So it's like ⁓ ⁓ Could you tell us more about what you do at the logic group and what this whole story is about? Mike Snyman: Yeah, sure. So Loggio founded about 10 years ago by our founder named Will Creeden. And we essentially have two parts to our business. The first part being holiday rentals, as you mentioned. So we've got about three and a half thousand holiday homes that we manage end to end from booking, marketing, distributing the product to the guests, welcoming the guests. Oleksij Rak: Yeah. Mike Snyman: ⁓ hosting the guests and then ⁓ maintaining the property. So, you know, ⁓ looking after the pool, looking after the garden, et cetera. So it's a full end to end. If you've got a holiday home, you give it to us, we manage it from start to finish. The second part of our business is what we call mixed accommodation. about, ⁓ run about 16 hotels and motels, mid-tier hotels and motels, so nothing too fancy. Oleksij Rak: you Mike Snyman: And we essentially lease those hotels on behalf of the owner. So we pay the owner a fixed fee every single month. And then we have full rights to run those hotels and motels. So we operate 16 of those across East Coast of Australia. And then our footprint with regards to the holidays businesses, East Coast Australia, as high as Magnetic Island, down into Noosa, Gold Coast, Brisbane, Great Ocean Road, Victoria, Byron Bay, and into, as you mentioned, into New Zealand. Oleksij Rak: you Mike Snyman: where we operate in two regions, Queenstown, which is an absolute humdinger of an area, and New Plymouth. full end-to-end business. We have two customers. The most important customer is the owner, the owner of the property, that's our first customer. And then we join our customer, which is the guest. And the guest obviously stays in the owner's home. So we kind of that middle layer between the owner and the guest. Oleksij Rak: Yeah. Awesome. So you managed, mentioned three and a half thousand holidays home, but you said the world home, ⁓ ⁓ do not own them, ⁓ Mike Snyman: No, we don't know. We don't own and that's the beauty of the model. We don't actually own the properties. But so obviously, obviously, the the owners of the properties own the properties, but they give us the management letting rights to run the properties for them. So we don't run the risk of the balance sheet in terms of having the properties on our balance sheet. But we get the benefits of the cash flow of essentially running those properties. Oleksij Rak: Yeah. So you basically own them without owning. So you kind of rent them for long term and you manage them completely and then you accommodate the Who is operating the property in the end? Mike Snyman: It's not long term. Yeah, so we're essentially we do operate, we do operate long term because it depends on the investor the owner's investment strategy. So we do offer that as a product, but majority of our letting is for holiday accommodations. So we're in the short term holiday letting market. And, you know, you know, it's people who wants to come around for a weekend for a week for two weeks. That's who our primary guest is that stays. But do do long-term rentals, but that's probably more of a secondary service ⁓ to our customers, largely because they don't like the fluctuations of the leisure market and they don't like the fluctuations of the short-term market or short-term holiday letting, because it's very volatile. You have a peak season where make a lot of money and then you have the down season in winter, really. Oleksij Rak: the . Mike Snyman: which you don't make so much money. So some customers don't like the lumpiness of the earnings. So they prefer the long-term rental. So we do offer it, but it's not our main business. Oleksij Rak: Okay, I see. Yeah, and speaking about seasonality, what's the seasonality in Australia? Because I'm not really familiar with that. You mentioned the of interviews. Mike Snyman: ⁓ yeah, of course. Well, Australians are, Australians are outdoor people. So they love the beach and we're known and we're notorious for our beaches, sun, surf. So, you know, along the East coast of Australia in particular, we've got some of the best beaches ⁓ there are the world. So seasonality for us is largely summer, school holidays. So, ⁓ and summer for us the ⁓ Southern Hemisphere is... ⁓ starts around October, and then you move into November, December, January, big Christmas, New Year period. We of have a bit of a lull, a little bit of a downside in February, March, and then we pick up again for Easter, ⁓ which is now coming around the corner. So for us in a week's time, Easter is our peak period for us. And then coming out of Easter, we have probably three or four months, which is winter season. The beautiful thing about our model though is, Oleksij Rak: Yeah. . Mike Snyman: ⁓ We try to build a natural hedge into our business by the different businesses or geographies we operate in. So although it's quiet time now coming into May, June, July, August, because it's winter for the beach season. So you'd imagine not too many people go to the beach. But we do have businesses in Queenstown ⁓ in Zealand, which is a ski season. ⁓ And got a fairly large operation there. Oleksij Rak: Yeah. So, you. Mike Snyman: But also up north in Queensland is an island called Magnetic Island. And it's very warm and summery during the winter periods. So a lot of Australians flock to Queenstown and a lot of Australians flock to Magnetic Island. So in our business model, we kind of have this natural hedge where even though it's winter time, we have destinations where people go. Oleksij Rak: Yeah, yeah, I Awesome, awesome. have a few friends in Australia, but you know, always need to your hand around ⁓ and around that kind of stuff. It's different. Mike Snyman: It's a good question. Oleksij Rak: in your hemisphere. Okay, anyways, coming to the properties, I did not have much experience like chatting with property owners, ⁓ actually property operators. What does it take to operate properties at this scale? Like ⁓ what kind of like operation? Mike Snyman: Well, that's a super question. Look, larger, it's a super question. In order to operate at scale, we need to have ⁓ a model that we can pick up and move to various regions and locations fairly easy, and it's replicable and repeatable. So we need to make sure our processes and ⁓ our systems are in place to be able to do that, pick it up, and then it's repeatable. That's the most important thing for us. Oleksij Rak: Yeah. Mike Snyman: ⁓ we probably have a slightly different model to, growth model to most of our competitors. Most of our competitors grow organically. So they win ⁓ owners through, you know, natural attrition or just, you know, chatting to, know, the local neighbor or, ⁓ know, getting, getting more properties through that. We actually buy a lot of our, ⁓ ⁓ our growth. So, ⁓ we're, we're, we're backed by private equity. Oleksij Rak: Yeah. Yeah. Mike Snyman: We've got an amazing private equity partner called Next Capital based in Sydney. And they're not your typical sharp elbowed private equity type of guys. When I say sharp elbow, they don't see value in coming in and cutting costs to create value. They come in and want to support the business to grow rather than, and that's where they find the value. So they've been amazing partners with us for probably the last better part of two and a half years. Oleksij Rak: Hmm. Hmm. Mike Snyman: ⁓ And through them, we've managed to access capital and we go and last year we did 12 acquisitions ⁓ in a year and we essentially go around the country and buy very similar business to us rent rolls and we just prop them into us into our machine at the top of the funnel and ⁓ fit in with our systems. We've got a great system, a great process. And we take over that business, they fit in with us within about four days we've integrated. So it's pretty quick integration and acquisition. And once we've obviously gone through the investment committee and all that sort of stuff, but I'm talking about from when we got unconditional, it's about a four to five day integration process. So our business model is pretty unique. We buy a lot of our growth, but we also have an incredible sales arm. We started that about 18 months ago. Oleksij Rak: Okay. Mike Snyman: and we've got about 15 or 16 BDMs at the moment that go out and every single day their job is to try and win more keys. And they look to our target is about 600 keys a year and we buy about 600 keys a year. So we're growing at about 1200 keys a year at the moment. So it's a really interesting business model. Just to answer your question, how do you scale? Man, I think scale comes with different levels. Oleksij Rak: Okay. Yeah. Mike Snyman: ⁓ You build your process and you have the right people and you have the right systems and you have the right strategies in place to get to a certain level. And then when you get to that many keys and you get to say 500 keys, it breaks because it doesn't work anymore. Even people that you have are brilliant people, but the businesses advanced past who they, know, past their capabilities and past their skill sets. Oleksij Rak: Yeah. Mike Snyman: And you kind of find yourself in a situation where you've got to rebuild it and then you rebuild and you redesign your processes and redesign ⁓ systems ⁓ bring in new people and new talent and then you get to the next level and know that that middle layer works again and then you get to a thousand five hundred keys and everything breaks again. certainly, yeah. ⁓ Oleksij Rak: It always breaks. always breaks. It depends on number of people or number of whatever purpose. The technologies break, people break, processes something breaks. ⁓ Mike Snyman: It all breaks. the earliest signs of that is when it becomes operational, you become operationally inconsistent. So when you start to see across the board that there's inconsistencies in your service levels and there's inconsistencies in how you service a customer and how you deliver your product to a customer and how you talk to a customer. ⁓ Oleksij Rak: Mm-hmm. Yeah. Mike Snyman: That's when you know you're starting to break. And it shows through all your metrics, your NPS scores, and it shows through your, you know, your start to leave you, your guests start to leave complaints, and there's definitely signs there. So scaling is not easy, as I'm sure most people understand, who's built a business over the years. Oleksij Rak: Do you have any example to share? What was the what was the reason that was something that broke or like most significant that broke? What did it cost you and how did you fix it? you can. Mike Snyman: ⁓ what broke? That's a great question. There's probably two. Oleksij Rak: I'm trying to chat about operational challenges and this is like operational challenges. Mike Snyman: Yeah, Look, I actually think there's probably two examples I can give you. There is a middle, I'm ⁓ going to say a middle management layer has gotten to a point where I think the size of our business now has outgrown them. So And they're amazing, they're amazing talents, amazing people, but the ideas they're coming up with, the ability to change, the ability to grow the business further than what it is, I just don't think in many instances, and some are brilliant. I think we've got to a point in some departments, and I won't mention which ones because I don't want to point any people out, but we've certainly got to a level where you can absolutely see that we've become stale. as a result of ⁓ management hitting a ceiling. So I one area. And the other area which comes to mind is we operate off a property management system, which is basically a distribution system to all our guests. And that system now gotten to a point where the amount of development that we require and the amount of ⁓ service that a guest And technology ⁓ we need to service that guest, it has become to a point where that technology platform ⁓ can't and cannot service and keep up with ⁓ what consumer ultimately demands. So we're in the process at the moment of changing that PMS, which is a massive change. ⁓ Our property management system is the fundamental center of our world. Oleksij Rak: Yeah. Mike Snyman: So to change that system is pretty huge, but we've come to the realization now that the system that we're on was probably good enough for what we were, but it's not good enough for where we're gonna be. Oleksij Rak: So I'm rebuilding it. I'm rebuilding the system already. Mike Snyman: ⁓ We haven't, not, procured it, we've procured another system through a major industry leader, the system's called Gesty. And they operate probably six out of the, I'm gonna say six, maybe seven out of the top 10 global property management companies around the world. So they definitely are the number one. Why I hesitated at the start in terms of, we rebuilding it? Because the way we operate in Australia is ⁓ different to the way the rest of the world works because we have trust regulations. So have trust accounting. So we hold money on behalf of the owners, which is our money. And there's a whole bunch of regulations and rules and requirements and compliance that we have to have to be able manage our business that way. Oleksij Rak: Mm-hmm. Mike Snyman: And we're working with Gasty in this instance to build that trust compliance piece. ⁓ as much as Gasty has a PMS system, which brilliantly around the world, it doesn't work necessarily in Australia yet. So we're in the process, we're co-building it with them at the moment. ⁓ we're there, we're the largest operator within Australia and New Zealand. you know, we're the perfect. perfect customer for them to build it for. But at the same time, we also have the benefit of being able to tell them what we want and we need out of a system. So it comes with its own challenges. Oleksij Rak: Yeah, yeah. Awesome, awesome. Promoter hero, you're kind of around three businesses on the one umbrella. you. You have a real estate business, you own the properties, and then you're managing the properties. And in the end, it's like guest acquisition and serving the guests. it's all, basically own your inventory and sell it. ⁓ on the market, are like different players in each of these areas. So you're doing it under ⁓ single umbrella. That's amazing. ⁓ Mike Snyman: Absolutely. The nice thing about our model, Alex, is to your point is we are think the business model is so good is that we don't have inventory that and logistics to worry about. You know, if you think about a, know, a Woolworths or we've got a Coles, which is like a grocery store here, a major grocery store, anything that's got logistics. Oleksij Rak: Yeah. Mike Snyman: They've got to store their stock in the warehouse. They've got to get it from A to B. They've got to worry about the prices of inflation and all that fuel. And then they've got to worry that their stock gets obsolete and all that sort of stuff. So having that stock piece, I think adds a lot of complexity to the business model. We don't have that stock necessarily, like that physical stock or the logistics that we have to get from our customer. Oleksij Rak: Mm-hmm. Mike Snyman: to our owner or our guest or owner. We don't have that logistics piece. We've just got to make sure that we do a damn good job at connecting the two. And then when they do connect that we do a great job at that owner and that guest journey. So, you know, our business model is actually pretty simple. And if we get it right, ⁓ all along the way, and I'm sure you've read all the books around the flywheel and that sort of stuff, you know, making sure that we get all the pieces in the flywheel right. Oleksij Rak: Yeah, absolutely. You mentioned like one of your... Mike Snyman: the model is really profitable. Oleksij Rak: when you acquire new keys, new properties you replicate your business model in like three to four days. So it's almost like a kind of franchise, know, except that you're running it yourself, but sense of franchise that you build the systems that somebody else can easily run. In your case, you build the systems that like property managers of that particular property can easily like set up and run. What does it take to build this kind of system? ⁓ ⁓ What moving parts are there to the system? What does it take to like onboard a new property and make it run in three to four days? It's quite fast actually, it's under a week. Mike Snyman: Yeah, it's very quick. And a lot of the time... the who we buying the, you know, the target, I'm gonna say in inverted commas with the utmost respect, staff don't even know that we're about to acquire them because the seller or the owner of the business is very quiet about it and don't want to let the staff know. So generally they find out, you know, two days before or on day that they've just been sold. So that, to answer your question about, you know, what does it take? ⁓ First and foremost, look after the people and we try and provide charity that they are safe in their role, that what they do every day is important and that they are gonna have a job. ⁓ The business is, ⁓ we're the service business, we're in the travel business, so we're offering, our people is most important asset. So the very first and foremost thing in the cornerstone of our acquisition strategy is around making sure that the people feel safe. Oleksij Rak: Yeah. Mike Snyman: that they, ⁓ we have a lot of support ready in terms of people and culture. We have a lot of support ready in terms of our own staff to be able to talk to the transitioning staff, if you want to call it that, to let them know that they are safe, have a job, et cetera. Then you get to the technology piece. ⁓ Our technology platform allows us to be able to pick up Oleksij Rak: Yeah. Mike Snyman: the properties and the inventory that we have and be able to just literally dump them back into our new platform, by picking up a CSV file and loading it ⁓ The hardest part of that is making sure that we've got the right rates in the system to make sure that we're charging the right rates out when we sell the property. It's no less than a day's worth of work for our team because of ability to pick it up and lift and shift straight into our technology platforms. Oleksij Rak: Okay. Mike Snyman: Where we do struggle though is we work with a system called Zoho for our internal communication. Zoho, I don't know you're very familiar with it, but it's like a cheaper version of Microsoft Dynamics. And I think that it's not the best system. people moving, a lot of our people that we buy move from Microsoft Dynamics onto Zoho. And I think that they struggle with that. We've got a lot of training. We, there's a lot of legalities that we've got to move through. So there's a lot of check boxes and tick boxes, but every single acquisition that we do, we have a project management team. We've got a specialist team that come in. They've got a list of stuff that everybody knows what, who's got to do what. And everybody just come in. Now we've done probably about 40 to 50 in the last three years. It literally is like. Oleksij Rak: She Mike Snyman: poetry, you come in, everybody knows what they need to do. And then the most important thing here is communicating, communicating continuously and over communicating to our owners, to our staff, to our guests and making sure that they know exactly what's happening and when it's happening because there's nothing worse. If you don't, if you obviously, as you know, if you don't fill in the gaps for them, they'll fill it in for you. Oleksij Rak: Yeah. Do these properties operate on their own brand or they keep operating on their own brands and you just like put them in? Yeah. Mike Snyman: Great question, great question. They operate under their own brand. So, and that makes our spiderweb of, you ask our marketing team, they curse every time we buy another brand because they've got another one, they've got a market and pay, you know, paid search and Google search fees for, but they operate under the brand that we bought it under because that's where the local equity is. The owners know that brand, the guests know that brand. Oleksij Rak: I can't do my shit. Mike Snyman: The local community knows that brand. So we keep all those brands. We've got about 36 different brands, as you call it across Australia. And my marketing team, who are reporting to me, as you say, if you had to ask them one thing what they'd wish they would say, can we just get into one brand so we don't have to market 36 different brands? But you know, the reality is that's where the brand equity is. So that's why we haven't changed it. We do have... a powered by Elogio at the bottom of our branding at the moment. So we are leaking in the Elogio brand into the community. And maybe, you know, three, four, five years from now, when that powered by Elogio becomes a little bit more prominent, we may switch to one brand. But at the moment, we keep one brand with the local brand. Great question though, Alexi. Oleksij Rak: Yeah. And what does it take to market 36 brands? It feels like a nightmare, especially since you kind of compete with yourself in certain areas. Mike Snyman: Thank you. become the biggest business model? We do. Well, look in Queenstown, we've got six trading names or six brands that is in very small market. we can't feed all the children is what I say to my marketing team. I wish we could, you know, but we've got to choose our favorite children and we basically got to feed those ones. So we don't market all 35 or 36 brands. We probably about 15 of them. And to your point, we don't compete against each other in terms of Google and paid media. We try and ⁓ stick one within each region that we operate. But we do keep it fresh. Really important to market ⁓ within the regions is to get the local input, especially around social posts and social media. You know, we need to know what's going on in New Sir or Gold Coast? What's the next market or when's the next soccer event or you know, so to keep it fresh and relevant to the local community, do need the local local input, but majority of our marketing is centralized. And we have a small team though, Alexi, we have ⁓ a of five that markets 36 different brands every single month. do 450 to 460 social posts. We do 25 EDMs. We've probably got about 100 grands worth of paid media every single month. So we do a lot with what we have. But an important part is using technology to be able to scale. So we've partnered with... from a social perspective, I'm not sure if you were of Icona Square, have you ever used Icona Square? Or Clavio, Clavio another ⁓ marketing that we use to be able to help us scale and put our content to our guests at the right time, at the right place, ⁓ with right message. Oleksij Rak: sounds like a lot of automation in place for the marketing team because numbers that you mentioned like hundreds of media articles whatever a week by a team of five it sounds quite a lot quite intense so what does Mike Snyman: It is crazy. It's actually really impressive what they do. Oleksij Rak: do they use and how do they achieve that? Do ⁓ have something in house, like building house for all this kind of automation to be able to publish that much? Or do they use some third party providers to... Mike Snyman: Yeah, they use third party. So the first one is called Clavio, which is a marketing technology, which basically puts all our customer data into one place. But ⁓ amazing part about Clavio is it segments your customers into categories. And time, it learns what customers are opening what EDMs. and what customers are interacting with. And then it tailor makes its output based on that. So over a period of time, you start to send a lot more targeted campaigns. You know that Alexki likes to open up holidays about ski season in Norway in June. And then it will just target you with those kind of holidays. and that kind of content. So it's really good to have that, which is Clavier. And then from a social post perspective, we use Icona Square, which is basically got all the templates that we've designed in the early stages that's already set up. And we just drop in different content into those templates. And it's got a schedule there that just automatically generates the social posts and posts it on Instagram, Facebook, TikTok. We would never be able to post that many. Oleksij Rak: . Mike Snyman: you know, deliver that much content without the use of technology. is an interesting one, which sure we'll get to later, but ⁓ at this stage, yeah, sure. Oleksij Rak: Let's get there. So do you embrace AI? Everybody doing something about AI nowadays. What do you do? Mike Snyman: AI AI, look, I've probably got a slightly different view with AI because it's obviously really important that we get AI into our business as much as possible. I think everybody wants AI. But I think that the challenge we're finding with AI is that AI is evolving so quickly that you go through a project of bringing an AI in or an AI tool into your business and you insert it. We specifically use AI. ⁓ in our customer journey and our guest journey. we try and insert, know that guests, 80 % of our guests are gonna ask about where do they check in as an example. So we use AI to generate a message to send out to guests before they check in to say, hey, this is where you wanna check in. So it avoids us having to answer the phone and having that cost of a person telling us that. ⁓ problem with AI though, I find is that because it's evolving so quickly. we take three months of implementing it into our business. And by that time, it's already old technology. You know, it's like having an iPhone 15 and then six months later, the iPhone 16 comes out and you're like, damn it, I had the best iPhone there was. And now all of a sudden I don't have the best iPhone. I've got the second best. And within a year and a half, I've got the fourth best iPhone there is. And my iPhone is so old because it's continuously evolving so quickly. So we're trying to... Oleksij Rak: Okay. So we're trying to, we're doing this as a business, we're trying to make it all around. We're trying to get the AI into offices where we think that the AI is going up to the level because we have to be happy with the AI from the end. And on the board, which is the reason I'm giving the word today, that it's considered, we've got to the point that we say. Mike Snyman: We, us as a business have got to make the call around when is the right time to input AI into our business. When we think that the AI functionality is good enough to deliver because we have to be happy with that function ⁓ and not have buyer's remorse, if that makes sense. I mean, we can always update it and et cetera, but we've got to kind of get to a point where we say, this is enough functionality for us. It's good enough for what it is. We're happy to insert it into our business. And if there's an upgrade later or a better function later, we can change over, but it's good enough for what it is now. So you kind of got to wait until that good enough. but, also not to get too distracted on the shiny things because it is so, it's so, tempting to down rabbit Warrens about AI and go, ⁓ that would be amazing in our business. And then we end up as an executive team. And we've had this conversation as a team, we ended up running down all these bloody journey is trying to find what's the best AI and you end up getting nowhere because you know everything sounds flashy and shiny and then you look over there and then you look over there and you look over there. ⁓ So AI is definitely important in our business but it's very selective at the right time with the right input. Oleksij Rak: So. So. But AI, know, people think about AI as something global that can be implemented in the company. But the example you mentioned, where they're checking because 80 % of guests are asking this question, it usually takes a few minutes to answer for somebody. You know, it's already saving a lot. So you just implement small time ⁓ agents ⁓ in place where you see like repetitive patterns, repetitive questions, repetitive... that can be just saved by ⁓ simple small AI agent that just does it. And it does not really depend on technology on what ⁓ models are out there because it just does one very, very simple specific job. But on a scale, it saves a lot of time, effort, for people, a lot of labor time. by the way, speaking about labor time, what's the most labor ⁓ intensive task? Mike Snyman: Love you, everyone. Oleksij Rak: you have nowadays when guests are coming or in booking process or in customer support. What's the most labor intensive task? Mike Snyman: lower intensive task at the moment for us is business model says that we have local people on the ground that live in the community, that are in the community, that essentially service the guests and the owners. And our biggest cost the board by a significant mile, 85 % of our cost comes from labor. And that's because we have... Oleksij Rak: Yeah. Mm. Mike Snyman: globally what we would probably call key account managers ⁓ dedicated to specific owners. So, you you've got a key account manager that's got 50 owners that they've got to look after and make sure that those owners are happy and that their properties are well run. And that is definitely for us the most labor intensive. You know, ⁓ tried to introduce technology in that, but that human connection with the owner is so important. I think if we lost that, Oleksij Rak: Yeah. Mike Snyman: it would really take the edge off of our business model. Oleksij Rak: about trust, yeah, for sure. It's about trust, this kind of human connection. From I'm hearing, more and more from business owners, like, they're running this kind of podcast. ⁓ People trying ⁓ to it bottom up, so just solving simple repetitive pains. And are trying not to bring AI on the frontline because... ⁓ It's not the, you know, it may be shiny, but when it fails to answer like first or second question, you know, you lose the trust. What you mentioned right now, make this kind of hybrid approach where AI prepares a lot of everything, like every minute simple, simple frictions, like here you spend one minute here, you spend five minutes there, 15, and it just solves that. And then this proper account managers, account property account managers, as you mentioned them. They can manage not like, I don't know, 20 properties, but 30 properties. And that's already a huge benefit because they are becoming more capable. from what I hear about from business owners, are thinking about their customer support because a lot of people work in the biggest cost driver is their customer support. For you, it's managing properties from what we hear. But still, they are trying to just empower them because the same team in the end will be capable of running. Mike Snyman: Answer. Oleksij Rak: of making more of like doing more work. So probably this is the approach. We can discuss it later. So no, no, no, not here. But yeah, sure. With regards like when touching the customers, the clients ⁓ come to your properties, what changed? What do you see? Like what has changed over the last couple of years ⁓ in industry, especially in Australia, because I'm not really familiar. Mike Snyman: Not very sure. Very sure. Oleksij Rak: There is HIV, there is Gen Z, there is post-COVID, like uncertainties, geopolitical, people afraid of losing jobs. It should affect the market. And how did it affect the market? Mike Snyman: Sure. think there's a few things there. So the first thing that came to mind is what's changed is the ⁓ booking profile has changed. ⁓ I think people are booking a lot more last minute. Well, I think I know people are booking a lot last minute. They're waiting until a week or two weeks before to book their holiday. ⁓ Whereas previously they used to book six, seven, eight weeks ahead. And I think that's as a result of Oleksij Rak: Yeah. Okay. Mike Snyman: A, how busy we've become as a nation. think it comes down to a money or a financial thing, and it's an impulse buy. But certainly the lead time has changed over the last couple of years. That's number one. ⁓ What we've also seen and we're trying to embrace as a business model as much as we possibly can. Oleksij Rak: Wait. Mike Snyman: but is that customers as much as possible, they wanna self-serve. Oleksij Rak: Okay. Mike Snyman: So what I mean by self-service, if you think about the banking business model five, 10 years ago, you used to go into a branch, you had to park your car, you had to go into a branch. If you wanted to get a new credit card, you had to stand in a queue. If you wanted to draw money, you had to stand in a queue, you had to fill out a form, et cetera, et cetera. You had to go and see the bank manager if you wanted a loan. Oleksij Rak: Mm-hmm. Mike Snyman: You know, so the banking business model over the years has transformed into a lot of self-service and so has airlines and the likes. You have to go online, you have to find your own how to issue yourself a credit card. If you want to up your limit, you have to go online and do it, you do it yourself. So, certainly, I think the consumer has changed and you talk about Gen Z and Gen Y, etc. has moved to a point where self-service is almost a necessity now. Oleksij Rak: Yes. Mike Snyman: They don't want to stand in a queue. They don't want to phone a call center. They don't want to, you know, ⁓ on a for five minutes to be serviced. So we as a business model have got to change the way that we service the customer and be able to allow as much as possible that that customer can self-service themselves. And that's where we're trying to get to as you know, it's not easy. But again, technology will be a large player in that part. But we want to be, you know, we want to be where the banks are now in five years from, know, five years from now, we want to be able to say that our customers can self service in 95 % of the circumstances. I mean, if you go into if you go into a bank's website, think about how hard it is to find a number to call. You know, Oleksij Rak: Mm-hmm. Mike Snyman: You can't, have to click on a link to click on a link to click on a link to click on a link to finally find something to before you can find a number before and then even then when you find a number it's, you know, you have to answer questions before you actually get to a person. They make it so difficult to actually get to a person to talk to because they don't want you to go through that process. They're trying to funnel you as a customer to go and self serve, know. Oleksij Rak: Yeah. Yeah. Mike Snyman: Get onto the chat bot, answer your questions. And I think that as a consumer to answer your very first question where customers are going, I think that's what customers want. And if we want to be good and relevant in our industry, we have to be able to self-serve. Oleksij Rak: How do you self-serve in this kind of industry? In property rental? Mike Snyman: and property rental. So if you think about the owner, first of all, remember, we've got two customers, we've got the owner and the guest. The owner can self serve themselves through either through portals or an app to be able to go in and at any time, real time see who's in their property, what bookings they've got, what does their Ford book look like? How is their property performing versus the markets? What is the latest industry updates? If they want to book the property themselves out for a week. Oleksij Rak: Yeah. Mike Snyman: because they wanna come and stay for the weekend, they can go in and they can book it themselves. If they wanna fix a door or a window or something that's broken, they can go in and put in a maintenance request and they can go in and service that ⁓ and get sent through and our maintenance guys go and do that. So from an owner perspective, it's actually pretty simple to self-serve as much as possible. And their statement comes out at the end of the month, this is how much money you made, et cetera, et cetera. Oleksij Rak: Yeah. Mike Snyman: They should be able to self-serve through that. A guest is slightly different. We've got to push a lot of stuff to the guest in terms of where do you check in? How do you get your keys? What is the Wi-Fi password? Again, all these simple things that you and I know when we check into a hotel or when we check into a property, we know what is the first things we do. We go and find where do we get our key? What time can we get an early check in? Yes or no? Oleksij Rak: Yeah. Mike Snyman: How do I log into the Wi-Fi? If I'm looking for room service, what's happening in the room? So all that sort of stuff we can service up to the customer, to the guest, because we know that that's what they look for through either, again, through an app or a portal or through AI to be able to push that to the customer. they get it before they check in or during their stay. If you can do that, then we don't actually have to touch the guest or the owner in any instance, really. The only thing we have to do is bring in our cleaners, clean the place when they've checked out, sure the grass is cut, make sure the pool's clean, and that's it. Oleksij Rak: Awesome, yeah, yeah, there's a graph to the property owners. It's obvious it's like property owners or property portal where you have everything done. But there's a graph to the guests. Like I was curious because the guys... They don't really want to any platform and check something in. But what you mentioned pushing this information into gas, yeah, it's really makes sense. I recently had a great discussion with the founder of a company, it's called Eon Rights. It's about electric vehicles rental. And they're running kind of marketplace of big marketplace operation by a team of five. And I was asking like how. Mike Snyman: That's right. Oleksij Rak: And he mentioned like, are predicting every single issue upfront and we are acting before it happens. It's about like pushing information into your customers, pushing information into your guests. In their case, like, you know, when you try to rent a vehicle they like check. two hours before if it's charged and if it's in place. If it's not, they immediately search for another vehicle and in the meanwhile solve the problem with current one. So they kind of predict it upfront. in of self-service of a guest, of a travel guest, it's probably about predicting his potential behavior and pushing. And mentioned we cannot change the behavior of our users, but we can. Mike Snyman: That's it. Oleksij Rak: adjust it within like 20 % of range. If it's between good or bad, we can adjust it by 20 % probably, but that's already a lot. And in this case, that's already a lot. If a guest can miss something, it probably makes sense to push something into the guest because that way you can adjust his behavior and remove the restrictions. Mike Snyman: Yeah, you push it to them. Well, you know, we know, I mean, we have about 60, 70,000 guests check in with us a year. of the guests have the same behaviors. So if you can study and understand their behaviors, you can service them in a way, you know, that is pretty seamless. And if you can add technology layer over that and take away the human element, that's even better. ⁓ You know, and there's always going to be that 15 or 20 % that you can't service through, you know, pushing stuff to the guests where the guests are going to ask about, you know, Oleksij Rak: Yeah. Yeah. Yeah. Mike Snyman: I don't know, where's the toaster or something that's of the norm. But, and you prepare for that, but the idea is that 80 % of the stuff that we do should be self-serve. Oleksij Rak: Yeah, are you doing something towards the direction? are you building? Because this is huge that you mentioned. So I did not consider it this way, but it's really like aligns with what I heard before from guys who are doing car rental. And it's really huge because it's like this kind of self-service model in terms of like predicting behavior of guests or repetitive patterns and like predicting them upfront and by just pushing them into... into the needed direction and that by reducing the customer support, whatever it was. So I'm building something in that direction already. Mike Snyman: Yeah, we are partnering with few companies for that exact for that exact purpose. And over the past, I'm gonna say, ⁓ six nine months, we've been analyzing the various data that we get for that exact purpose. And we are in we're probably fairly progressed in terms of the stages in terms of our piloting for a product that does exactly that. So we are using quite a bit of AI in terms of learning and machine learning to understand what the guest is asking for, of course, as you'd expect. don't get me wrong, it's been pretty difficult because as we've unleashed it into the environment for our market, we failed a lot. And guests have got the wrong experience and the wrong answer, and that more friction. But we've got to fail quick. is our motto. And yes, so, you know, we're probably about two, three months away from, you know, a really good product that we've built helps us to self-serve. Oleksij Rak: Awesome. do you think? What's your prediction of maybe you have some numbers? What can it save you? I don't know, in terms of money, terms of labor involvement, in terms of whatever. ⁓ Mike Snyman: If we get this right, Alexki, I reckon we would probably take out between 40 and 45 percent of our guest and rest services workforce, maybe even 50 percent. in terms of and a lot of our that's a lot of that is offshore too so we'd be left with a very small onshore contingent it'll probably take out half of the workforce. Oleksij Rak: Awesome, that's a lot. Which you can either save this money or use for something different, for making something. Mike Snyman: Absolutely, well, we repurpose it into growth and development and maybe buy a few more companies. Oleksij Rak: Mike, a great discussion and it's closing to 50 minutes. So probably we wrap it up, but ⁓ I'd really to continue. Mike Snyman: We're going to That's all good, Alexei. Thanks very much. It did go quickly. It's some great questions. Thank you very much. I enjoyed being on your podcast. Thank you. Oleksij Rak: Thank you too, it was a great discussion, really insightful and I personally learned something new. So before we wrap it up, is there anything you would like to add on top of what we discussed? Mike Snyman: no, look, think, I think if, ⁓ you building a business and scaling a business, if, if, know, if it was easy, everyone would be doing it. And probably, I you know, my only encouragement to anybody is, ⁓ is, keep plugging away at it. ⁓ And, you know, going to fail and you're going to fail multiple times and, ⁓ we have, and we still do fail multiple times. ⁓ keep your sense of humor about yourself. We're a strong believer in irreverence and what I mean by irreverence is we our business seriously but not ourselves. So we have a lot of fun with what we do as we're building and ultimately we're building, we're gonna fail. But how what an opportunity it is to get to build something. So for all your listeners out there, if you're struggling and you're feeling that it's... ⁓ that some days not going your way. ⁓ it was easy, everyone would be doing it. So the struggle is worth it at the end ⁓ hard ⁓ work will pay off. Oleksij Rak: Yeah, that's true. Thanks a lot for coming and have great day and let's stay in touch. Mike Snyman: Thank you very much. Appreciate it. Great chatting.