Welcome to our third May newsletter, replacing the weekly “Smarthosts” newsletter.
Note: As you know we are a Vacation Rental focused company but we are witnessing a merging of accommodation types occupying this space and all have a vacation edge to their marketing and guest focus. Our newsletter is also morphing to cover these challenges, competitors and opportunities.
What’s happened this month?
We thought March was a biggy, but April just gazumped it with some astonishing investments:
Have you ever heard of Selina? We hadn’t but with a $100m investment, valuing it at $850m, it’s almost a Unicorn and at that valuation, you would think it’s for high-end business! In fact, it’s living spaces for digital nomads! Not only that Selina has also secured some $300 million in country partnerships to build out its hostels and their related activities across the globe. Read more here.
Years ago we saw the acquisition of many of the familiar listing sites: VRBO, OwnersDirect, Holidaylettings, Niumba and many more. Spain-Holiday.com with 18million listings seemed to avoid the rush or was resilient to offers. Now it has joint ownership and skills to push it ahead. We will watch this space to see if it follows the current e-comm trends. Read more here.
Airbnb has been at it again, no surprise there and has headed east, investing in one of India’s most valuable startups, OYO. Live like a local is long gone! Neither Airbnb nor OYO would comment on the size of the investment, but it could be as much as $200 million, according to media reports. OYO was valued at $5 billion in 2018. Read more here.
Airbnb’s second investment of $160m has been in San Francisco-based Lyric who transforms premium apartments into studios with hotel-quality cleaning services and around-the-clock online support for business travelers looking for short-term visits or stays of as long as 200 days. Amazing investment as they only have 380 suites on offer across the U.S. With the likes of Stay Alfred and Sonder already rattling along quickly, it must be seen as a hot space by investors. Read more here.
One close to home. SykesCottages a primary UK supermanager with 500 staff has acquired a company literally on the other side of the planet, in New Zealand. The company Bachcare has 2,000 properties and a great reputation. This takes the Sykes inventory to over 16,000 properties. Read more here on the acquisition.
Vacasa has acquired Sterling Resorts, one of the largest vacation rental management companies on the Florida Gulf Coast. Sterling Resorts manages 450 units in destinations along the Gulf Coast of Northwest Florida. Vacasa now manages 13,000 vacation rentals and is the largest vacation rental management company in North America. Vacasa is focussed on mainstream, traditional vacation rentals and has been looking to expand into Europe from their office in Prague. This video with COO Bob Milne, points to a predominantly organic growth approach (70/30) in Europe. A bit of a light commentary on the challenges.
Also hot off the press the Barcelona based channel management company, Rentals United, raised EUR 4m this week to continue its march forward. This is a sector that is under pressure and worth watching to see how it pans out. With the big players hooking directly to the big OTAs and this pool itself seemingly getting smaller, a niche play by the big channel companies may well be needed and marketplaces with different value propositions could also benefit. Congratulations to James, Vanessa and the team. Read more here
Rentivo Business News
We have seen more and more need for connectivity and witnesses endless questions relating to data management, marketing opportunities, payments, websites, apps, pricing management and much more.
Without any doubt, if you want to stay ahead of the game or even tread water then adopting technology and focusing on the guest is of primary importance.
Operational property management is critical to the success of any rental. With OTAs killing the urban self-marketing sector and regionals working hard to avoid the same fate, it is easier for a startup to actually make bookings, albeit at a poor margin. The really big hurdle, however, is ensuring management is up to scratch.
The two core elements: management and marketing need to be connected by technology and bring the owner and guest into play in real time as well. To build a successful enterprise you need a wealth of services to compete and support guest expectations.
Tallis Travel Ltd
They say the proof of the pudding is in the eating. Rentivo has joined forces as a Joint Venture with WCS Bespoke, the pre-eminent management company in Sotogrande, Spain. With a superb reputation for service, asset management and guests service, combined with the Rentivo team’s history in running rental and booking businesses, expertise in marketing and technology, this is an ideal environment to “walk the walk” and prove the need to develop networked specialist systems, matching a guest’s experience expectation.
Of significant benefit is some excellent operational management software, that has been developed by WCS Bespoke and integrated to Rentivo systems. This software, “Propierge”, runs all the deep level organisation and management of properties and staff as well as local invoicing on activities and other services. Integrated with Zoho CRM this proves to be a necessary powerhouse to run operations smoothly.
This is very early stage, and we shall be launching the business shortly with a focus on quality, experience, guest interaction, excellence in service and all knitted together by technology.
Some of the partner technologies being used in this venture and integrated are: PMS, dynamic pricing, local price evaluation system, guest app, OTA choice, content, review management, owner promotions, destination marketing etc. All brands will soon be published and a showcase created.
Watch this space…
A few interesting takes this month.
The first is Airbnb (again). The Plus program has been pretty quiet recently and speculation is rife as to whether it can survive in the face of all the other quality foci. Airbnb has to invest in this plan, but once an owner has the prestige they may be tempted to market it using the elevated brand and avoid fees.
To avoid this, it seems that in the US, to be a Plus owner means becoming exclusive to Airbnb.
“By applying to the Programme, you agree that, for as long as your Listing is still participating in the Programme, solely for those Listings for which you have received an invitation to list your home exclusively with Airbnb Plus (“the Plus Exclusivity Program”), you will not use any online booking service or platform to book or promote such Plus Listing(s).” Check the full terms here.
Will this become global? It won’t cheer many for sure as the inventory increases and competition heats up. Wider distribution is the natural move.
There have been quite a few investments in the tours and activities sector. Klook is one example that is scaling its operations. The trend, however, is to network accommodation and activities together, much the same as Airbnb (although this is a more local authentic approach). The opportunity to leverage customers spend and move it all to mobile is a challenge the smaller managers will face soon. Expedia’s TV ads are offering all elements of a trip now in a single payment. Dynamic packaging across VR is coming. Smaller managers will need to hook their systems into activity API’s to compete and focus on mobile, before, during and after booking!
Expect more activity in this sector, also driven through greater adoption of guest apps and connectivity to activities. Businesses such as HelloHere are breaking ground daily.
Over in Europe, Brexit rumbles along, but it may be having an impact on UK travel and European holidays. With a poor exchange rate and uncertainty over travel it looks like Staycations are trending. Sykescottages have posted some numbers that prove interesting and well worth a read. Some extracts:
- Bookings over the summer of 2018 were up by 55%
- 50% of the UK plan to take their main summer break within the UK – boosting the UK economy by £25 billion and no doubt reducing France and Spain tourist numbers
- Average gross income: £20,000 for homeowners
- Pet-friendly properties see an 11% uplift in bookings
- Coastal, WiFi and Open Fires add 7/14/16% respectively!
- Luxury properties and hot tubs are popular (no surprises there!)
Barcelona seems to be the rental hub of Europe for tech businesses and startups. Always a little odd bearing in mind the antipathy to the sector by locals and over tourism!
Unique Products & Services
We are seeing more and more smart devices being used in rentals. Noise/party detection devices, air condition monitoring devices, digital meters for swimming pool management, Amazon Alexa and Google Home for timing that boiled egg of playing music, electronic door locks and more.
These are all great services for both guest and manager but as we know guests are not the same. With some recent publications (Airbnb again) showing that camera monitoring is being used more frequently and not always in the most moral way, we know some guests are concerned that they are being watched or worse videoed. Two recent events, one in Cork Ireland and one in Santa Anna, USA.
We did some research and there are literally hundreds of devices that can be bought to detect cameras. We have however identified a way to check cameras hooked to the home’s WiFi or hard wired in. It’s not foolproof but it’s free and downloadable to your phone. Not much use for managers, but if somebody says they are planning on staying in an Airbnb. 🙂
Quotes we’re pondering
It has to be the comments from a guest and their family in Cork, Ireland after booking an Airbnb and discovering a camera. Quoted in all the press and mentioned above.
“We felt an immediate violation of our privacy in a private residence we had paid to occupy.”
A word of warning here for all inventory managers/owners. The industry is transitioning and although these may be personal places and very precious there are lines that cannot be crossed. It’s a significant minority who think like this of course, but one bad apple…..
Unless of course, you want to sign the guests up to a reality rental show. Hey Matt, there’s a new idea!
Thanks for reading,
– The Rentivo Team