Latest / Hospitable Hosts / The Hidden Revenue Stream in Vacation Rentals with Localbird
Transcript
- Miles: Hello and welcome to today's episode of the Hospitable Hosts Podcast. I am your host for today, Miles from Hospitables Marketing Team. And today I am speaking with Ben Levy from the LocalBird team. He is the CEO and co-founder there. If you enjoyed today's episode, please don't forget to like, share, and subscribe on your favorite podcast platform. Okay, thank you so much for joining us, Ben. How are you doing today? Ben Levy: I'm good. Thanks so much for having me. I'm excited to be here. Miles: No worries. Excited to find out more about Localbird. I must admit, I don't know a ton myself, so I'm interested to learn and hopefully our listeners can hear new things too. So maybe you can start off with telling us a bit about the background of Localbird, you know, maybe the the elevator pitch of you know, the problem that you were trying to solve and you know what you got you started. Ben Levy: Sure. So Localbird is building the online concierge for the vacation rental industry. we started around 2022 when me and my brother were looking for things to do in Hawaii. we were Miles: Hmm. Ben Levy: at a family vacation and we couldn't find an easy way to book things online. I remember we wanted to book a surfboard, we wanted to book a car, but Miles: Mm-hmm. Ben Levy: you know. Finding it online wasn't so easy. So we asked our host for recommendations. And he was excited to help us. He handed us this printed guidebook and told us that if we're looking to book anything, then we can either look there or we can contact him and he'll help us. And yeah, we realized that that experience wasn't ideal because Miles: Mm-hmm. Ben Levy: you know, in a day where you can book anything online and everything's accessible. we shouldn't have to work so hard in order to be able to find and book experiences. and for hosts, we understood that they were missing out on a huge opportunity of capturing a lot of the revenue that their guests are spending on experiences outside of the rental and inside of the rental. So think towards an activities, transportation, private chefs, massages, yoga classes. and much more are things that we've gone out, find found the vendors for and made bookable and distribute through a network of thousands of property managers across the US, Mexico and Costa Rica. and really Miles: Nice. Ben Levy: the vision is to you know turn every stay into an experience worth remembering and you know worth telling about when you're you know back home. because that's what we believe, you know, really makes the trip. It's not about, you know, how you know, how nice the room is or you know, the I don't know, the the color of the sheets. It's really about, Miles: Mm-hmm. Ben Levy: you know, what you did, what you experienced during that trip. And was everything seamless and taken care of for you? Or did you spend like half of your time doing the logistics of planning and Miles: Yeah. Ben Levy: booking and modifying all the things that change in the trip. so we offer basically a platform where people can book independently or chat with a concierge where we have kind of an AI and human hybrid team where AI will handle a lot of the conversation and make sure that guests are getting. you know, fast responses and and very personalized and relevant offers while the humans are there to pick up the more complex requests or modifications that come up during a trip. Miles: Nice, okay, that's great. And obviously local birds had some fantastic growth recently as well. How have things changed from, you know, day one and that Hawaii story to kind of where the company is now and, you know, how things were done in the past? I'm Ben Levy: Yeah. Miles: sure that you've had to make a lot of changes if you've scaled. Ben Levy: Totally. So after we, you know, while we were on our trip in Hawaii, we actually started building the initial versions of the product on that trip. It was kind of like we kind of immediately you know, knew or thought we knew what we wanted to build and and had the capacity to build it. So we did. And then my brother was actually living in Costa Rica at the time, so he was managing vacation rentals and also like he ran a restaurant so we knew a couple of you know property managers and boutique hotel owners that initially were skeptical because like why would i let these young guys like talk to my guests through some platform that they built so it took us a couple of you know weeks of like knocking on doors and before we kind of were able to get our first host live. and we immediately saw that you know people started inquiring and booking things. but we didn't have like the system to support it. So basically what would happen is someone would book online on a website that we built, you know, really scrappy. and then like I would get a notification. I was the only one that would get the notification out of me and my brother, so I would forward that to my brother. He was in Costa Rica. he would basically hop on a motorcycle, drive to the vendor's office and say, Hey, I have a reservation, these are my guests, hand them cash and say, you know. Miles: Yeah. Ben Levy: Please make sure you give them a really good service. And that's how, you know, the first hundred bookings actually happened as we were building the system out a little bit better. And we were bootstrapped for the first two years. So we didn't Miles: Mm-hmm. Ben Levy: have like money to hire a team of engineers. Basically it was just me and my brother. And then eventually we were able to raise money and hire, you know, a really strong CTO and really good team. and that's kind of how we were able to scale into Mexico and the US. but Miles: Nice. Ben Levy: yeah it was a it was a long journey Miles: Mm-hmm. Ben Levy: to to get there and we had to grow organically in the beginning because yeah like investors Miles: Yes. Ben Levy: weren't really convinced that this was a business that could scale because of the operational complexity. And AI wasn't you know, like where it is today at the time. So Miles: Mm-hmm. Ben Levy: it was still very early. And now we're in a place where we can take a lot of that complexity and and you know, automate it and you know, hand it off to an agent that does a lot of the coordination, a lot of the work behind the scenes that otherwise would make the business Not viable. Miles: Yeah, that makes sense. And so obviously, no motorcycles to go and pay vendors today. everyone listening will be glad to know. but what does the experience feel like? So say I'm a hospitable host, I'm connecting local bird for the first time. What do I see and what do guests see as part of that experience? Ben Levy: Yeah. So the onboarding for hosts and property managers is, you know, really seamless. There's no need to kind of do this whole like technical onboarding or anything like that. basically you connect your PMS and then approve messages that will start going out to your guests where we will basically time the messages and personalize it to each guest. and it'll be based on your market and based on a knowledge base that we have on that market and the network of vendors that we've basically reached out to and onboarded in your market. also have the ability to invite their own vendors. So oftentimes like they'll have a private chef that they really trust or a tour guide that they really trust and they want to invite them in as well. so we make that super easy. and what's also unique about our platform is that hosts can now also kind of input knowledge for our team and the AI to know. for example, if they have a hundred properties and one of the properties is, you know, has its own kind of setup or it's different, then you know, we can learn that and make sure that we handle those like complex situations at scale. for example, you know, this villa has its own golf carts, so give it you know, don't offer golf carts to that villa. Like that's those are the type of nuances that we have in the hospitality industry that need to be like we we basically build our product to to fit that. Miles: Nice, okay. And are there any instances I guess where you guys are having to, you know, manually step in for that AI? I mean, I know it it sounds like you're kind of setting up those complications in advance, but are there instances where the AI can't handle a request and and you have to step in manually? Ben Levy: Yeah, so you know, oftentimes anytime there's a guest that wants something that's like unique or or there's like a modification where it's a little bit more complex for the AI than we have a human that steps in immediately. because we we always have like a team on staff. and and I don't know, an example is like we You know, we booked a a tour and you know, we booked it with pickup and we're waiting for the guy outside and he's not answering. That's like the type of Miles: Mm. Ben Levy: situation where we would have a human involved to help either contact the vendor, find a replacement driver, or be able to kind of compensate the guest in in the situation where there needs to be a cancellation or things didn't go as planned. Miles: Yeah, that makes sense. I think a lot of us have been in those situations before where the driver just takes longer than expected and sometimes just gotta wait a bit. Good stuff. Ben Levy: Yeah, I I think that really what guests want is to know Miles: Mm-hmm. Ben Levy: that there's someone there on the other side that is there to help them so that they're not stuck by themselves. Miles: Yeah, definitely. it's you know, like Uber had such great success from just showing you where the car is on the map and giving you an ETA. It doesn't necessarily mean that the car's coming any quicker. It's just nice to know that have have a have a status update and and be in the know and not complete unknown. Good. Ben Levy: Yeah. Totally. Miles: great. So talk me through kind of some of the the revenue opportunity with local bird as well. So I think I'm right in saying that Localbird is free to join and you are basically taking a share of then the commission in order to kind of earn your revenue. what's the kind of the cost and revenue for a host? and you know realistically what can they add to their bottom line per booking through you know joining Localbird? Ben Levy: Yeah. So I could definitely give some examples. hosts today have to kind of hire someone to be the concierge if they don't want to do it themselves, which you know, if their guests demand experiences and services then and they wanna do that, then it's just gonna be super time consuming. It's gonna take up all their focus and they won't be able to focus on their business or their life or anything else because that's a full-time job, especially when you're trying to do it at scale. and we've had hosts that have we have an example of a host that has a hundred properties and they had like a team of like three or four people that do reservations and concierge. and the problem with that is that without a system of record, then all that information is like super messy, things fall between the cracks, things are forgotten about, and you know, guests end up having a poor experience. and they have to pay that staff. With localbird, it's completely free. since you know we've made we've made the process efficient. we offer it for free to hosts. Miles: Mm-hmm. Ben Levy: And we make money when guest book experiences. We, you know, like you said, we take a commission from the vendor and we split that Rev share with the host. and we you know have examples of a host, for example, a hundred properties, doing around 50 or 60 K a month in in gross booking volume of experiences where they're earning around, you know, between seven to ten thousand dollars in net profit from those commissions because they're not paying anything on those commissions so that's straight to to their net profit. Miles: Nice, that's great. and obviously I guess it's more than just revenue as well here. So do you see instances of kind of you know, these experiences showing up in guest reviews as well and kind of increasing repeat bookings for property managers? Ben Levy: Totally. We actually have a lot we look at all the feedback that we got from guests and we read that and we see that a lot of times in the reviews guests will you know talk about how the concierge helped them and was there for them. And I think that you know, being there for the guest for things that are beyond just this day are nowadays no longer like a luxury it's more of like an expectation. you know, if a guest asks you, hey, any question from where's in your supermarket to where's the best restaurant to how do I book a chef, if you just say Google it or send them a link to some third party site, then they're gonna immediately kind of think that your place is a lower tier accommodation, a lower tier service, and it's likely to impact your review. as in, like it won't be a glowing review. the places where we see glowing reviews are when, you know, it's about the host, how they cared for the guests. They went above and beyond to recommend the best restaurants, to to help them when they got stuck, to help them, you know, book the car, book their airport transfer. And that Seamlessness is what makes this day you know, really worth sharing. Miles: That makes sense. I like it. okay, so we'd love to get kind of a few tips from you for anyone, I guess, using local bird or I guess trying to do their own you know, upselling concierge service. I guess first one would be around you know, if someone activates local birds today, what's like one of the first things that they should do in the first week to actually start seeing results from it? Ben Levy: I think really understanding what are your guests asking for in the first place. and then making sure that that is the thing that is displayed first to your guests and every guest is actually offered that thing. because you know, if you create a guidebook and in your market, you know, scuba diving is the number one thing that people come for, but that's buried Under a bunch other recommendations where it's not proactively offered to guests, chances are they're gonna find it online, they're gonna find their own way to do it. And not everyone's gonna reach out and ask you. But if you're proactive about it and you actually, you know, send a message like, hey, by the way, if you came for scuba diving, here are the best vendors that we trust and vetted. and here's an easy link to book it. Then they're already gonna assume that you're the best, most trusted option, a lot more than whatever they'll find by themselves, whether it's on Google or on the street, or in some group chat, like because they're staying with you, they trusted you, you they may have interacted with you, whether it's via chat or in person. and you know, they know that you care about their experience. Miles: Hm. Nice. Yeah. That makes sense. Ben Levy: So I think like like we started local word with the with the knowledge that the host is like the most trusted part of the of the guest journey. Miles: Yes, cool. in terms of I guess mistakes that you see host making with kind of upsells, you know, w where it's pricing, timing, communication, is there anything that you really see kills conversion on those Ben Levy: Mm-hmm. Miles: upsell? Ben Levy: Yeah. you you can't be like only focused on things that make the most money. I think that like in the beginning you actually have to earn the guest trust by offering things that are like more frequent. so for example not every guest is gonna need a massage or book a private chef. But every guest is going to book, they need their transportation from the airport to the property. Miles: Mm-hmm. Ben Levy: So while in terms of revenue, transportation is a lower revenue service, because it's so frequent, you can get more guests into your world of booking concierge services and experiences through you. That later on, once they've made that first transaction and it was successful and now they trust your concierge service, then that kind of opens them up to the rest of what you have to offer, where you can offer them a private chef for a thousand dollars or a massage for 300 or a yacht rental for 2000, and all those things all of a sudden become like you become the best option because you gave them. that good experience initially. And I use transportation as an option, but you know, it can be as simple as obviously it depends per market. Like you have to understand what people are actually looking for in your market. but it can Miles: Awesome. Ben Levy: be like a bike rental. And I would Miles: Mm. Ben Levy: even, you know, suggest having some kind of free thing that you can offer your guests, like maybe like a bike that you, you know, have obviously it should be in good condition. But like if you can get a guest to like reserve a bike, even if it's like, you know, a couple bucks, but they're likely to do it, if you made that transaction easy, then they're gonna assume that the the rest of the transactions that they make with you are gonna be easy. Miles: Nice, yeah, that makes a lot of sense. Cool. and then I think a key advantage of local bird as well is that obviously you're vetting suppliers. what do you see when when you're vetting a a vendor? like what what's the differentiation between one that's gonna be great and one that isn't? And kind of is there any red flags there for maybe a host trying to vet a a local vendor themselves for something that they're offering in kind of a guidebook? Ben Levy: Yeah. So we yeah, we vet all of our vendors, you know, we have like an onboarding process where you know, we we really we're checking for reputation, quality of service, and professionalism. So you know, if they're renting renting out golf carts, we're gonna want to see that they have insurance, and like different services have different requirements. so we do kind of like know your customer. and I think what differentiates like a great vendor To like another like average or low vendor that's gonna give a poor experience is first and foremost communication. If you take I don't know, two hours to answer, then it's gonna be really hard to work with you when a guest you know has a request or has an inquiry because in travel and the world of experiences, like by the time you've answered after two hours, the guest already booked somewhere else. And when a guest is frustrated, waiting two hours is like a lifetime. so in any in any scenario, you need to have like a really good communication style and frequency, right? Like you have vendors that'll be like like you know arguing with with the guest, which is also something that is a red flag. and that is all kind of about like professionalism and you know making sure that these vendors like first and foremost understand like how to give a quality experience to customers. and it's hard because in some markets they just have so much demand that like they don't even care. Like you know, like we've you know, we've talked to vendors that have votes and like, you know. We want to give them customers, but they're like, I want less customers. I am fully booked. You know? So so it's it took time until we've been able to kind of, you know, push meaningful volume to vendors to the point where, you know, like our guests get a really good experience every time. but Miles: Hm. Ben Levy: once you have that kind of line. of communication and transactions, then things usually get easier. It's usually like the beginning that that requires effort and flexibility from both sides. And that's also kind of what makes the the mark this market like you know complicated because every vendor is different. the the process of booking a yacht is much different than booking a shared boat tour. it's much Miles: Mm. Ben Levy: different than booking a golf cart. Or like everything is like every category is so different. and even like vendors between themselves, like two vendors in the same category, two private chefs, they work completely differently. And you have to kind of adjust your booking flow to what they do. And you know, it's Miles: Yeah. Ben Levy: something that has now made possible with technology and like kind of what we focus on at Localbird is really making that experience seamless across categories. but it's it's quite a challenge without it. Miles: Course. Makes sense. sweet. Well, I really appreciate you chatting with me today, Ben. I think final easy question is obviously where do folks go to find out more about a local bird? Ben Levy: Yeah, so localbird dot com is our website. that's where you can learn more as a host. That's where you can kind of sign up and and get started. As well as, you know, if you're a traveler looking for things to do, where kind of you can also book things directly on our website. Miles: Sweet. Sounds good. Well, Ben, thank you again for your time today. It's been great learning more about you and LocalBed. Ben Levy: Awesome, thank you so much. This was fun. Miles: Thank you again for listening to today's episode with Localbird, our new hospitable partner. If you enjoyed today's episode, please don't forget to like, share, subscribe, give us a positive review on your favorite podcast platform, and listen out for a new episode coming soon.