Latest / Pillow Talk Sessions / Scaling Hospitality: From Short Term Rentals to Modern Hospitality with Reuben Doetsch (AvantStay)

Transcript

Scaling Hospitality: From Short Term Rentals to Modern Hospitality with Reuben Doetsch (AvantStay) · Pillow Talk Sessions

• 0:00
  SPEAKER_00: Hospitality and short-term rentals have changed a lot over the last eight years, but we've kept that to the forefront, which is how do we scale with quality?
• 0:07
  SPEAKER_01: How are you doing that?
• 0:08
  SPEAKER_01: Because it's not really difficult.
• 0:10
  SPEAKER_00: We've built a tech-enable tool that really performs manage local teams at scale.
• 0:15
  SPEAKER_00: Someone who wants that show and incentives are showing the outcomes of the entire company is driven towards incentives that are really quality driven.
• 0:22
  SPEAKER_00: I think you'll see more professionalism in Georgia Rentals.
• 0:25
  SPEAKER_00: I think you'll see more kind of local flair at the hotel level.
• 0:38
  SPEAKER_01: Welcome to the Pillow Talk Sessions podcast.
• 0:41
  SPEAKER_01: My name is Jessica Givingham, and I am the host.
• 0:45
  SPEAKER_01: And in today's episode, I interviewed Ruben Deutsch, who is the co-founder of Avance Day, which is a modern hospitality operator across around 100 markets or so within the US, having 3,000 properties and growing.
• 1:03
  SPEAKER_01: And in this conversation, we talk about what it means to scale hospitality, and then also what is the distinction between a hotel product and a short-term rental product.
• 1:16
  SPEAKER_01: And maybe today there isn't so much distinction, or certainly won't be so much as we go into the future.
• 1:23
  SPEAKER_01: I hope you enjoy this conversation with Ruben as much as I did recording it.
• 1:29
  SPEAKER_01: Thank you.
• 1:30
  SPEAKER_01: Ruben, thank you so much for joining me for a Pillow Talk Sessions episode.
• 1:35
  SPEAKER_01: I'm really looking forward to this conversation.
• 1:38
  SPEAKER_01: It was great to have you on stage at Verma just a little while ago and to sort of continue the conversation that we had there.
• 1:47
  SPEAKER_01: But before we kick into the full conversation and episode, I'd love it if you could give our audience an overview of not just Avance Day, but also yourself as well.
• 1:59
  SPEAKER_00: Awesome.
• 2:00
  SPEAKER_00: Well, thank you for having me on stage.
• 2:03
  SPEAKER_00: Uh really amazing panel.
• 2:05
  SPEAKER_00: Uh so I'm Ruben Deutsche.
• 2:08
  SPEAKER_00: Um I've been a serial entrepreneur all my life.
• 2:11
  SPEAKER_00: Uh started Avance Day eight, eight, eight and a half years ago uh with a partner.
• 2:17
  SPEAKER_00: Uh we are a tech-enabled, you know, hospitality first short-term rental company.
• 2:23
  SPEAKER_00: Um, we really started with larger groups, um, so four or five, six, seven bedroom amazing estates uh that you know were consistent experiences, and we now have a portfolio of over 3,000 homes across 100 different markets in the United States.
• 2:41
  SPEAKER_00: Um, I think started the business, the genesis of the idea was really consistent experiences for short-term rentals.
• 2:49
  SPEAKER_00: There are no brands.
• 2:51
  SPEAKER_00: Marriott is this massive brand in hotels, and there weren't really any brands in short-term rentals.
• 2:56
  SPEAKER_00: Airbnb is an OTA, they don't control the experience, they don't have you know boots on the ground, they don't have true brand standards.
• 3:04
  SPEAKER_00: And so, how do you create that trust with the consumer?
• 3:07
  SPEAKER_00: Uh, similar to what Marriott's done, where you know that you're gonna go to a house and have an amazing time.
• 3:13
  SPEAKER_00: So uh that was a long time ago, and obviously the world's changed a lot, and hospitality and short-term rentals have changed a lot over the last eight years and the market's matured.
• 3:22
  SPEAKER_00: Uh, but we've kind of kept that to the forefront, which is how do we scale with quality?
• 3:28
  SPEAKER_00: Uh, how do we make sure that we have happy guests uh and also happy owners on the management side?
• 3:33
  SPEAKER_00: Um, but a lot a lot of times those things go hand in hand.
• 3:39
  SPEAKER_01: Yeah, brilliant.
• 3:40
  SPEAKER_01: And the panel that we that I moderated that we had you on was a panel looking at competing business models in the vacation rental space.
• 3:50
  SPEAKER_01: And we we had kind of a we had someone representing the franchise model, we had somebody representing an owner-operator model, and when we also had you representing the brand the branded short-term rental model.
• 4:04
  SPEAKER_01: Um, and it was a really interesting conversation looking at how you know how how you can kind of deliver a similar thing, but but very in very different models as well.
• 4:15
  SPEAKER_01: But something I'd love to actually start with you, Ruben, is you know, at 3,000 properties, you've really you've you've really sort of gone somewhere with that.
• 4:25
  SPEAKER_01: Like that is a very much a sort of a scale-scaling vacation rental business that not many have successfully got to or stayed at over time.
• 4:36
  SPEAKER_01: And one of the things that you said in your intro there is that you you are scaling hospitality and vacation rentals.
• 4:43
  SPEAKER_01: How are you doing that?
• 4:44
  SPEAKER_01: Because it is notoriously difficult to scale vacation rentals beyond a certain size.
• 4:52
  SPEAKER_01: And how are you doing that?
• 4:53
  SPEAKER_01: Like, what's your secret source, if you like, or your strategy for doing that?
• 4:58
  SPEAKER_00: Yeah, I think it's it's twofold.
• 5:00
  SPEAKER_00: It's we have we built kind of a tech-enabled vertical platform, uh, so we don't use any, we use very few off-the-shelf software solutions.
• 5:09
  SPEAKER_00: Uh, we built a tool to really performance manage local teams uh at scale.
• 5:14
  SPEAKER_00: So I can go in and see if a vendor is not doing a good job in a market that I haven't been to in a year.
• 5:20
  SPEAKER_00: I can I know that within a stay or two.
• 5:23
  SPEAKER_00: Um, you know, I think uh the someone once said, show me the incentives, I'll show you the outcome.
• 5:30
  SPEAKER_00: So the entire company is driven towards incentives that are quality, um, really quality driven uh on the guest side and the owner side.
• 5:39
  SPEAKER_00: So people know that they care about it, and we've embedded that into our DNA to ensure that that kind of percolates throughout the entire organization.
• 5:48
  SPEAKER_00: Um, I think that a lot of I I don't want to say trial and error, but a lot of building, right?
• 5:53
  SPEAKER_00: A lot of making sure that we know that if there's a non-five-star stay, what how do we you know have a retrospective on that and how do we you know change a process or or change an incentive or you know, change people to ensure that that always is a five-star stay?
• 6:09
  SPEAKER_00: I think hospitality is a 24-7 business, and and this business is is you're you have to be close to the metal and and understand that.
• 6:17
  SPEAKER_00: And how do you build tools to allow you to see that at scale?
• 6:21
  SPEAKER_00: Um, you know, so we can drill into you know, buy market, buy subcategory for ratings.
• 6:27
  SPEAKER_00: Uh, you know, we're constantly running analysis every single day.
• 6:31
  SPEAKER_00: Anything that's not a five-star, you know, leadership sees.
• 6:35
  SPEAKER_00: So I think it to do it well, you really need to care about it, and you have to build that into your operating motion.
• 6:41
  SPEAKER_00: I think we've done that over a period of of multiple years.
• 6:44
  SPEAKER_01: So it's not just tech enabled, it's data-driven.
• 6:47
  SPEAKER_01: It sounds like you've got a very much a data drive driven operation.
• 6:51
  SPEAKER_00: Yeah, exactly.
• 6:53
  SPEAKER_01: And then one of the things that you mentioned here, but we've also talked about, is you have built all your own tech.
• 7:00
  SPEAKER_01: Like you don't really use outside vendors.
• 7:02
  SPEAKER_01: Is that is that correct?
• 7:04
  SPEAKER_01: Like you're not gonna be able to do that.
• 7:04
  SPEAKER_00: Yeah, that's that's correct.
• 7:06
  SPEAKER_00: Um, I think you know, uh the tech was in a very different spot when we started the business.
• 7:12
  SPEAKER_00: Uh, you know, there weren't the mature platforms that there are today.
• 7:17
  SPEAKER_00: We started the business today that maybe is slightly different.
• 7:20
  SPEAKER_00: That being said, we spent a lot of time and invested a lot in building a kind of a world-class platform that allows us to drive enterprise scale, right?
• 7:29
  SPEAKER_00: I think a lot of the platforms are built for 100 to 200 units.
• 7:33
  SPEAKER_00: And once you get to enterprise scale, and we're talking about regional directors over certain markets and how do they see their metrics?
• 7:41
  SPEAKER_00: Um, you know, how do you look at things from different SKUs?
• 7:45
  SPEAKER_00: Um, there's not a lot of platforms that are are built for folks that have 3,000 plus properties, uh, because there's not very many operators that have 3,000 plus properties.
• 7:55
  SPEAKER_00: So um a lot of that, you know, top line, and we built our operations into our tech.
• 8:00
  SPEAKER_00: So our operating motion is is built into the system.
• 8:05
  SPEAKER_00: So there's gonna be things, you know, we talk a lot about NPS, and so NPS is a throughput in the entire system uh for markets, for vendors, for like homeowner NPS or homeowner sentiment.
• 8:18
  SPEAKER_00: So, like, you know, we built it really custom, and the cost of building software has obviously gone down with AI significantly, and and now we're we're really seeing the impact of the and seeing the dividends from a lot of the investment we made over the last you know seven years.
• 8:34
  SPEAKER_01: So it's very much built to scale with you as well as being built for you.
• 8:39
  SPEAKER_01: Well, is there anything so so you said that you know maybe if you were starting out today you wouldn't necessarily do it the way that you've done it, despite what sounds like great outcomes for you on it.
• 8:50
  SPEAKER_01: But it would there be a particular tech within the stack that you would have outsourced, definitely.
• 8:57
  SPEAKER_00: Um I don't know.
• 9:00
  SPEAKER_00: Uh I uh I would have to charge some of our the point solutions for me to give them a call out like that.
• 9:06
  SPEAKER_00: But uh no, I think there's some good there's some good players.
• 9:09
  SPEAKER_00: Uh and I think there's, you know, especially for folks that aren't at two, three thousand properties, uh, you know, are very interesting.
• 9:18
  SPEAKER_00: Um and for smaller operators, I think building your own tech is probably a mistake, especially if we always had a very big vision, which is we wanted to be the Marietta short-term rentals, loyalty, all these extension points that like you know, you can get to 80% with the off-the-shelf stuff, but the last last 20% is is a challenge.
• 9:39
  SPEAKER_00: Um, but yeah, I mean, I think uh a bad V of strong operators um in the space and a lot of you know places to choose or a lot of providers to choose from.
• 9:51
  SPEAKER_00: Uh and I think the other thing for us is we didn't want to go have a bunch of different solutions that you had to kind of rig together, which I feel like is what a lot of people are doing right now.
• 10:01
  SPEAKER_00: And that integration experience is pretty painful.
• 10:03
  SPEAKER_00: Um, you know, and maybe they kind mostly integrate, but they break down someplace.
• 10:09
  SPEAKER_00: So uh also from a cost standpoint, at this point, like we're not the the delta between the in-house versus outsource is not that high.
• 10:20
  SPEAKER_00: Uh, you know, because we are so scaled.
• 10:23
  SPEAKER_01: Mm-hmm.
• 10:24
  SPEAKER_01: Another question, you you said that you started in the larger homes.
• 10:28
  SPEAKER_01: Was it did you say like the seven bedroom, six, seven bedroom?
• 10:32
  SPEAKER_00: Five, six, seven.
• 10:33
  SPEAKER_00: I think the initial pitch was really, you know, group travel reimagined.
• 10:39
  SPEAKER_00: And uh we felt like the that customer was stickier, those experiences were more inconsistent.
• 10:47
  SPEAKER_00: Um you weren't directly competing with traditional hospitality like hotels.
• 10:52
  SPEAKER_00: Um, you know, a lot of those are run by, you know, smaller operators that don't have the experience or even individual hosts, right?
• 11:01
  SPEAKER_00: Um, you know, you go in and and someone's clothes are in the closet, and you know, they probably it's a decent experience, but not it's not a consistent experience.
• 11:11
  SPEAKER_00: And there's a lot of horror stories from folks that did not have good experiences.
• 11:15
  SPEAKER_01: And then from the group, what made you diversify beyond the larger homes?
• 11:22
  SPEAKER_00: Yeah, I think that's a great question.
• 11:25
  SPEAKER_00: Uh there's a lot of competitors uh in in multi.
• 11:30
  SPEAKER_00: By multi, I mean multi-family buildings or condo hotels or park hotels, right?
• 11:35
  SPEAKER_00: Uh, there's different kind of nomenclature for it.
• 11:38
  SPEAKER_00: A lot of those players did a lease model, a lease arb model.
• 11:42
  SPEAKER_00: Uh that model we were very, we did not want to get in over our skis, and I think that was a good decision at the time.
• 11:50
  SPEAKER_00: A lot of those players are, you know, Sonder went bankrupt, um, you know, uh Vicasa, which is not multi, but also went bankrupt for different reasons or sold for different reasons.
• 12:01
  SPEAKER_00: Um you know, uh Minhouse, there's a bevy of kind of folks that have tried that vertical model and and have not been able to do it successfully.
• 12:11
  SPEAKER_00: I think a lot of times there's the you know, if you take long-term leases and have short-term exposure, there's risk in a downturn in some markets, and we saw some softness in in some markets, right?
• 12:23
  SPEAKER_00: And and so that it's really hard to get over it.
• 12:25
  SPEAKER_00: You we saw that this with WeWork and co-working.
• 12:28
  SPEAKER_00: We work fundamentally is not a bad product.
• 12:30
  SPEAKER_00: I think customers really like it.
• 12:32
  SPEAKER_00: It's the model is is difficult to do at scale uh if you risk adjust it for you know what can happen on a longer time horizon.
• 12:41
  SPEAKER_00: So uh, but now there's an opportunity because there's not that many folks, and and we're doing management style agreements, uh, and we're very good.
• 12:50
  SPEAKER_00: We actually think it's easier to run vertical product than it is horizontal product, and by that I mean, you know, we have to run 100, you know, six-bedroom hotels and and or 106-bedroom houses, which are almost like mini hotels in some markets, and instead we can just run a hundred units uh in a building.
• 13:09
  SPEAKER_00: And so a lot of the hardened operating procedures that we put together for the group product translated pretty well into hotel product.
• 13:18
  SPEAKER_00: Uh and most of our vertical product is unique.
• 13:23
  SPEAKER_00: Uh it's a lot of times it's suites, it's two, three bedrooms, we do buyouts uh of the specific floors.
• 13:30
  SPEAKER_00: So a lot of the distribution technology that we built, we can leverage in that context as well.
• 13:35
  SPEAKER_00: We don't take, you know, really, you know, 300 key traditional hotels.
• 13:43
  SPEAKER_00: It's really stuff that you know we're playing in a space where there's not very many other folks that know how to optimize this product.
• 13:51
  SPEAKER_01: And so it's typically it's in multifamily units that will have normal long-term residence on certain floors, and then you take a floor to do usually, usually we'll do full building.
• 14:02
  SPEAKER_01: Yeah.
• 14:02
  SPEAKER_00: Because um, it's just a much better experience and consistent experience.
• 14:06
  SPEAKER_00: You don't want to go into the lobby and then get on the elevator, and then you have some folks that are lived there for five years and some folks that are there for three days.
• 14:16
  SPEAKER_00: Um, you know, but we will lean into relationships and maybe try that sometimes.
• 14:22
  SPEAKER_00: But you know, our preference is take the full building and really create a hospitality experience around it.
• 14:29
  SPEAKER_01: Yeah.
• 14:29
  SPEAKER_01: So what do you do you consider yourself a hospitality operator, a short short-term rental operator, or a modern hotel operator?
• 14:40
  SPEAKER_01: What where do you think we sort of sit?
• 14:42
  SPEAKER_00: I think that's a great question.
• 14:44
  SPEAKER_00: I think those are all the lines are blurring between all of those.
• 14:47
  SPEAKER_00: I think short-term rentals are becoming more hospitality first.
• 14:51
  SPEAKER_00: Uh, I think hotels are leaning more into unique uh accommodations and unique stays.
• 14:57
  SPEAKER_00: I I think we're a modern, we are, you know, we are a modern hospitality company, um, you know, built for today's traveler.
• 15:05
  SPEAKER_00: Uh, I think that that includes group stays, that includes villas, that includes unique ways to travel to to cities.
• 15:14
  SPEAKER_00: Uh, you know, maybe you go get a three-bedroom and a multi, and you have this amazing experience with a rooftop deck and some food and beverage on the bottom floor.
• 15:23
  SPEAKER_00: So um, yeah, I think we're a hospitality company at heart, and that I think is the through line uh here.
• 15:30
  SPEAKER_00: And you know, I think the other subsections all kind of bleed into each other uh over time.
• 15:36
  SPEAKER_01: And I guess in a way, it's sort of it what the actual asset is is maybe not so relevant as is meeting the need of the guest and providing that consistency, that brand level.
• 15:50
  SPEAKER_01: And then in terms of how you how you manage to do brand standards and and provide that consistency of hospitality across different assets, how are and like how challenging is that for you?
• 16:04
  SPEAKER_01: And then how are you how are you working that out?
• 16:07
  SPEAKER_00: Yeah, yeah, I think it's a good question.
• 16:09
  SPEAKER_00: I think that uh we kind of want to meet the needs of the customer in the geography that they're in, right?
• 16:15
  SPEAKER_00: So I think that we're obviously in you know, very, you know, heterogeneous geographies.
• 16:25
  SPEAKER_00: Uh, you know, the what people expect in tell your ride is very different than what they expect uh in Coachella Valley versus the Poconos, right?
• 16:33
  SPEAKER_00: So a really amazing cabin in the Poconos uh is maybe three, four bedrooms, and you know, you feel like you're in this cabin, but it's well appointed, the service levels are very high.
• 16:44
  SPEAKER_00: Um, you know, if you're in tell your ride, like you know, we have ski in, ski out apartments, uh, we have houses as well, right?
• 16:51
  SPEAKER_00: So really the service levels are where you you can really drive consistency, right?
• 16:56
  SPEAKER_00: You know, strong service levels, clean house, uh, the little touches in the house all make sense.
• 17:02
  SPEAKER_00: Uh, in terms of like, I don't, I think people kind of uh went against having every single room look the same, whether you're in Tell Your Ride versus Poconos versus Nashville, right?
• 17:14
  SPEAKER_00: So how do you create that local flair uh and that local feel as well uh in those markets is is something that we think about a lot as well.
• 17:24
  SPEAKER_00: So it's a kind of an art and a science.
• 17:26
  SPEAKER_01: And then how do you work with your owners?
• 17:30
  SPEAKER_01: Is it something that you know they it's really important they come on that journey with you about being hospitality first?
• 17:38
  SPEAKER_01: And because they have certain things they need to make sure, like their assets are up to standard, they're allowing you to invest in, you know, furniture in properties, that kind of thing.
• 17:48
  SPEAKER_01: How do you bring them on the journey with you?
• 17:51
  SPEAKER_00: Yeah, uh, I think they obviously have bought in, they've signed up with us.
• 17:56
  SPEAKER_00: Uh, I think we have uh an upgrade team uh that will help them through the upgrade process and say, hey, this is the stuff that we think would really be ROI driving and ensure that you're kind of on brand.
• 18:09
  SPEAKER_00: Uh we walk them through the numbers.
• 18:10
  SPEAKER_00: We have a long operating history of knowing what matters in certain markets, right?
• 18:15
  SPEAKER_00: Uh pools matter in Scottsdale or Palm Springs.
• 18:19
  SPEAKER_00: Uh pools don't matter as much.
• 18:22
  SPEAKER_00: And, you know, Telluride, just using those as examples.
• 18:27
  SPEAKER_00: Uh so you kind of where are the really big large ROI items that you the the asset is missing?
• 18:34
  SPEAKER_00: How do we make sure that the style fits um and that there's nothing that you know we don't think is up to brand standards?
• 18:42
  SPEAKER_00: Uh, and how do we work with the owners to ensure that we can get their asset uh to where it needs to be uh to kind of hit those levels?
• 18:50
  SPEAKER_01: And then in terms of destinations, it sounds like you are predominantly in the leisure markets rather than urban markets.
• 18:58
  SPEAKER_01: Is that a strategic decision that you've made, or is that just what you've talked about here, or or what like where do you sort of fit in terms of points of mind?
• 19:07
  SPEAKER_00: Yeah, I think drive to destination and leisure markets are have historically been our bread and butter.
• 19:13
  SPEAKER_00: Um, I think we are in some urban Nashville, Austin, um, you know, our two larger like cities, but they kind of are tourism first cities.
• 19:24
  SPEAKER_00: Uh so urban leisure markets.
• 19:27
  SPEAKER_00: Um, a lot of traditional large form factor urban markets have very strict regulations, right?
• 19:33
  SPEAKER_00: So New York, San Francisco, uh even Chicago is pretty strict.
• 19:38
  SPEAKER_00: So, you know, that's the for those we would enter similar to how we entered Miami, which is a big up-and-coming market for us, where we just opened a hotel and have another hotel launching in you know three months.
• 19:53
  SPEAKER_00: Um that the hotels are apart hotels.
• 19:57
  SPEAKER_00: One of Sense 28 is a hotel we recently launched that's all two bedrooms.
• 20:02
  SPEAKER_00: So it's a conversion from a multi uh to a kind of hospitality grade asset.
• 20:08
  SPEAKER_00: So that's a great way to enter the urban markets, but again, we're not gonna, you know, for New York, we would need to enter with a full building uh with a hotel style license.
• 20:18
  SPEAKER_00: And um, you know, we'll be patient as as we think about entry opportunities there.
• 20:23
  SPEAKER_00: And uh right now we've really, you know, we like the destination markets because those markets people go back to every single year.
• 20:31
  SPEAKER_00: Uh and you know, short-term rentals and group experiences are in their kind of ethos uh of why people go there and a big part of their economy.
• 20:40
  SPEAKER_00: And uh, you know, we want to plug in uh where folks are traveling.
• 20:44
  SPEAKER_00: Um, and the other thing is, you know, in uh a lot of folks say, well, you know, in a reset possible recessionary climate, what does that look like?
• 20:56
  SPEAKER_00: People are gonna travel, uh, you know, whatever the the climate is.
• 21:01
  SPEAKER_00: Uh and I think what we've seen is instead of going to Europe, people go to a drive-to destination and and rent an amazing home four hours away or five hours away.
• 21:10
  SPEAKER_00: So uh we feel really good about our position and our market selection uh as it relates to kind of that question.
• 21:18
  SPEAKER_01: Has anything changed for you in terms of like the shift?
• 21:23
  SPEAKER_01: Because I know we had sort of like I always call it like almost like we still had the COVID golden days of the last few years, but has anything over the last year, 80 months, two years shifted for you in terms of demand and and rates and and how easy it is to kind of ha have have this proposition?
• 21:45
  SPEAKER_01: Like is anything shifted for you or is it still just golden days?
• 21:49
  SPEAKER_00: No, I mean I think that it's you know, you saw a big boost in demand during COVID.
• 21:55
  SPEAKER_00: I think every operator saw it.
• 21:57
  SPEAKER_00: Um obviously people did not have.
• 22:00
  SPEAKER_00: To you know, work from home and and remote work and just still more of a thing than it was before.
• 22:05
  SPEAKER_00: But you know, people are kids are going back to school.
• 22:08
  SPEAKER_00: Uh, you know, a lot of folks are you know, we're seeing seasonality that's more similar to before COVID than during COVID.
• 22:17
  SPEAKER_00: Um, I think we've kind of gotten out of the phase where you know folks got really excited, thought that was the new normal, realized it kind of transitioned a little bit back, and now the new steady state, which is you know strong demand and and peak uh peak moments like summer and then some softness and shoulder season, which is how it kind of has always been for the last 10, 15 years, 20 years.
• 22:43
  SPEAKER_00: Um, that's back.
• 22:44
  SPEAKER_00: And I think for us, it was really owners that bought during the COVID craze, uh, realizing that you're you're not gonna get rich overnight.
• 22:53
  SPEAKER_00: Like you're gonna find a great asset where you know, we're gonna do, and you guys are gonna do everything in your power to drive demand to that asset.
• 23:01
  SPEAKER_00: Um, you know, and and getting comfortable with, you know, it's not gonna always be up 10% year over year, and there's gonna be, you know, uh puts and pulls, and and you know, we're gonna operate as you know, as better than anyone else in in any of these markets and drive more revenue than anyone else.
• 23:20
  SPEAKER_01: And then in terms of scaling, so in eight years, going from zero to three thousand and you're buying hotels or you're taking over hotels, like how how have you scaled at that that level?
• 23:34
  SPEAKER_01: Because you know, obviously it's not going to be just getting one property per time.
• 23:38
  SPEAKER_01: You I think you've been quite acquisitive as well.
• 23:41
  SPEAKER_01: But how how does the scaling work for you?
• 23:45
  SPEAKER_00: Yeah, I mean, we look at it um, so we have really three main drivers of of scale.
• 23:52
  SPEAKER_00: Uh, we have a retail sales team that will reach out to owners and call owners and take inbounds, right?
• 23:58
  SPEAKER_00: We've done a lot, we've invested a lot in you know, chat GPT and LLM optimization first for kind of the analogous search engine optimization for today.
• 24:08
  SPEAKER_00: Uh, we spent a lot of time on SEO, um, so folks know who we are and and what we can provide.
• 24:14
  SPEAKER_00: Uh, we will do our institutional deals uh for you know, a lot of times multi, but kind of 10 to 15 villas.
• 24:22
  SPEAKER_00: And we have a project in Palm Spring, Coachella Valley, called the Polo Villas, which is, you know, um, you know, 18 18 homes in in Coachella Valley uh that are all six, seven bedrooms, and then we have some apart hotels.
• 24:39
  SPEAKER_00: And then we will do some acquisitions, right?
• 24:42
  SPEAKER_00: If we feel like uh a company really aligns with our brand standards and we feel good about them, and um they're in a market that we want to either be in or they're in a existing market, right?
• 24:52
  SPEAKER_00: We can kind of integrate them into the system uh and and make them part of the family, so to speak.
• 24:58
  SPEAKER_00: So uh, you know, different moments of time, different strategies work better.
• 25:03
  SPEAKER_00: Uh as you know, there's a lot of as we saw at the conference, there's a lot of kind of private equity money in the space right now.
• 25:10
  SPEAKER_00: So multiples are high.
• 25:12
  SPEAKER_00: Uh, we probably will do less, you know, acquisitive MA and really lean into making sure that uh our retail team and the institutional team uh ultimately, you know, uh we tell the teams like happy guests, happy owners, right?
• 25:27
  SPEAKER_00: If we can solve those, continue to make sure that we have great experiences on the service side for both of our stakeholders, uh, we will win long term.
• 25:35
  SPEAKER_00: And I feel very good about that.
• 25:36
  SPEAKER_00: So really putting our heads down and making sure that we we can provide that great experience to both parties.
• 25:42
  SPEAKER_01: And then in in terms of growth going forwards, are you looking to do more of your part hotels or more more of the single family homes or more of everything?
• 25:53
  SPEAKER_01: Like maybe it doesn't matter so much what what the asset is.
• 25:58
  SPEAKER_01: It's just growing the advanced day brand.
• 26:02
  SPEAKER_00: Yeah, I think it's really where do our customers want to be and how do we make sure that we have more places that they can have great experiences, right?
• 26:10
  SPEAKER_00: I think that is um really the you know the through line.
• 26:16
  SPEAKER_00: Um we'll look at apart hotels if they make sense in markets where we think it's an amazing product.
• 26:24
  SPEAKER_00: Uh, you know, we'll obviously grow the single-family home portfolio, right?
• 26:28
  SPEAKER_00: So it's really about what do our customers want.
• 26:30
  SPEAKER_00: We know that they love both of those product types, uh and it's gonna change for kind of different geographies and and different use cases for our customers.
• 26:39
  SPEAKER_01: So a little while ago, when you were talking about technology, you mentioned very in passing the world loyalty.
• 26:46
  SPEAKER_01: And I wonder how much you think about that customer loyalty and customer community, so building the brand around the customers and you know, their experience of you so that you've got that lifetime value of those customers rather than it being transactional.
• 27:04
  SPEAKER_01: So, so how's that sort of fit with your strategy, that loyalty and community and lifetime value?
• 27:10
  SPEAKER_00: Yeah, I think that's really important.
• 27:12
  SPEAKER_00: Like our repeat rates are very strong across the portfolio.
• 27:15
  SPEAKER_00: Uh, we have uh a membership uh on the site where you can become a member uh and and get discounts and VIP service.
• 27:24
  SPEAKER_00: Uh, I think going forward the next 12 to 18 months, thinking about you know, uh, what does loyalty look like in our context?
• 27:31
  SPEAKER_00: Is it traditional Marriott style loyalty or is it something slightly different because we're you know heavy short-term rentals and larger group homes?
• 27:40
  SPEAKER_00: Um, but you know, I think it's something that we think about.
• 27:42
  SPEAKER_00: How do we really provide value to owners and guests?
• 27:45
  SPEAKER_00: Um, you know, loyalty is obviously very powerful for Marriott.
• 27:51
  SPEAKER_00: Uh, we wanted to get to sufficient scale before we launched it, uh, you know, because I just think you need to be in all the places they want to go to make it a good offering.
• 28:01
  SPEAKER_00: Uh, and how do you make sure that once you launch it, you feel really good about the service levels that you're providing those members and what that that journey looks like for the customer.
• 28:10
  SPEAKER_01: But I guess you would build tech as well that really makes sense of that as well.
• 28:16
  SPEAKER_01: Exactly.
• 28:16
  SPEAKER_01: And that sense of community as well, that um you can provide within within a brand, you know, like Marriott, of course, and most of the hotels, they have their points system.
• 28:27
  SPEAKER_01: But there are some lifestyle hotels like Ennis Moore brand that has like 15 different brands in it, that are looking at loyalty differently, like looking at it in um uh more of a community way, same with Citizen M as well, doing loyalty differently from the traditional hotels.
• 28:47
  SPEAKER_01: So rather than being points, it's like extra services and extra things that you can get, like free early check-ins and rooms that are available just for members, that kind of thing.
• 28:58
  SPEAKER_00: Yeah.
• 29:00
  SPEAKER_01: Is is that kind of thing.
• 29:02
  SPEAKER_01: And then I'd love to get your thoughts, Ruben, on where you see hospital like I maybe actually the question might be where do you see short-term rentals and the traditional hospitality of hotels over the next, say, five five years or so?
• 29:19
  SPEAKER_01: Like, where do you see those two fitting?
• 29:22
  SPEAKER_01: The traditional vacation rental and the hotel brand?
• 29:26
  SPEAKER_00: Yeah, I I think we're gonna start, I think they're gonna continue to merge.
• 29:30
  SPEAKER_00: And I think we're gonna stop to stop thinking about them as kind of different verticals and almost a spectrum of hospitality uh based on your needs.
• 29:42
  SPEAKER_00: And I think you'll see more professionalism in short-term rentals.
• 29:46
  SPEAKER_00: I think you'll see more kind of local flair uh at the hotel level.
• 29:51
  SPEAKER_00: Uh, I think you know, concierge and service offerings and all that as you know, tech and and AI makes that easier to be more personalized, that that will play in.
• 30:03
  SPEAKER_00: Uh, and then I think discovery will be done, you know, via ChatGPT and and Claude and Google Gemini.
• 30:13
  SPEAKER_00: And I think that democratizes the kind of experiences that you can have.
• 30:18
  SPEAKER_00: Uh, can be a one-bedroom stay, it can be a four-bedroom stay.
• 30:22
  SPEAKER_00: Uh you can see it all there.
• 30:23
  SPEAKER_00: What is uh the itinerary?
• 30:25
  SPEAKER_00: I have five people going to you know Barcelona or going to you know Austin, Texas.
• 30:31
  SPEAKER_00: What does that look like?
• 30:32
  SPEAKER_00: Right.
• 30:32
  SPEAKER_00: So I think that you know they continue to merge.
• 30:36
  SPEAKER_00: Uh, I'm sure there will there will be, you know, short-term rental providers and hotel providers, and there's some differences, but I think those get closer as we go farther, farther out in time, especially five to ten years out.
• 30:49
  SPEAKER_01: Yeah, no, brilliant.
• 30:51
  SPEAKER_01: And you also said at the beginning that you you you've been a serial entrepreneur.
• 30:56
  SPEAKER_01: And um what so, in terms of this sector as being something you've now been in for a while, are you pleased that you came into this sector?
• 31:06
  SPEAKER_01: And then where do you where does your sort of entrepreneurial head take you next in terms of you know um this convergence that you're seeing?
• 31:15
  SPEAKER_01: Like what what I guess also excites you about that from your entrepreneurial?
• 31:20
  unknown: Yeah.
• 31:20
  SPEAKER_00: Um, I mean, I think that, yeah, I mean, it's a really exciting space to be in.
• 31:25
  SPEAKER_00: Obviously, it's had ups and downs, but I think you know, fighting through and like really providing ultimately, you know, I'm an extrovert, my co-founder is from a very large family, uh, so really feels these problems acutely.
• 31:39
  SPEAKER_00: Uh and you know, solving real guest problems in an analog, you know, experience, I think, was always something that drew both of us to to building the business.
• 31:51
  SPEAKER_00: And, you know, it you can always start a SaaS company for X, Y, or Z, but it's not as fun.
• 31:58
  SPEAKER_00: It's probably easier in a lot of ways, but uh, I think making sure that you give guests these amazing experiences is you know really powerful feeling.
• 32:07
  SPEAKER_00: Uh, and you're you're there for you know, you're helping host all these really game, life-changing events, right?
• 32:15
  SPEAKER_00: Weddings, uh, you know, bachelorette parties, you know, birthdays, right?
• 32:20
  SPEAKER_00: Like you really have this emotional connection with with the guests in a lot of ways.
• 32:25
  SPEAKER_00: Um I I'm excited about continuing to grow and and continuing to you know expand and and become, you know, the everyone knows who we are in the entire United States.
• 32:40
  SPEAKER_00: Uh, you know, I think we have a lot of brand presence in in a lot of markets, but how do we really make sure that we have enough density that if someone wants to travel, if a customer wants to travel any place in the US, that you know we are in those places that that folks want to go uh and have you know real market presence and and can continue to kind of serve our customers uh in that way.
• 33:04
  SPEAKER_00: Uh what excites me, I think that you know, the world is is changing, and I think uh people's appetites for what hospitality can be is changing and and what does that look like over the next five years?
• 33:17
  SPEAKER_00: How does AI play a factor in that?
• 33:19
  SPEAKER_00: How does AI not play a factor in it?
• 33:21
  SPEAKER_00: Because I think some folks really do want that personalized experience.
• 33:24
  SPEAKER_00: Uh, what is what kind of markets does that create, and what kind of opportunities does that create uh are questions that excite me.
• 33:31
  SPEAKER_01: And what would be your answer to those questions, particularly the AI questions?
• 33:37
  SPEAKER_00: Uh I think it's gonna change a lot.
• 33:39
  SPEAKER_00: I think it's gonna really create um a lot of efficiencies for a lot of hospitality providers that should you know open up a lot of folks to reinvest into personalized experiences for guests, right?
• 33:54
  SPEAKER_00: Better concierge experiences, you know, more you know, programmed packages so you can really go someplace and uh you know feel what it likes, what it's like to be a local, uh, I think a better quality of service, I'm hoping, right?
• 34:08
  SPEAKER_00: I think um, you know, because I think a lot of people are using AI to for things that are not you know that difficult to answer, they're answering with AI.
• 34:18
  SPEAKER_00: Then for the really the more hospitality first questions, how do you brought that to an agent to really make sure that experience is great?
• 34:26
  SPEAKER_00: Um, so we'll we'll see.
• 34:27
  SPEAKER_00: I mean, I think the the world's changed a lot over the last you know 12, 24 months, and I think it's gonna continue to change at a pretty rapid pace over the next 12 to 24 months.
• 34:38
  SPEAKER_01: Brilliant, Ruben.
• 34:40
  SPEAKER_01: Thank you so much for everything that you've said and for joining me on pillow talk sessions.
• 34:46
  SPEAKER_01: Thank you very much.
• 34:47
  SPEAKER_00: Thank you, Jessica.
• 34:48
  SPEAKER_00: I appreciate it.