25.8.21
The Propcast talks to Paul Zukauskas and Joseph Binestock from Guesty about the changing times of short-term rental, what to expect in terms of summer and winter trends, Guesty’s recent acquisitions, as well as delving into the shift in consumer behaviour they have seen.
Paul Zukauskas
https://www.linkedin.com/in/pzukauskas/
Paul is Global Vice President of Customer Success at Guesty, the end-to-end property management platform for short-term and vacation rentals. Paul has ten plus years of SaaS Leadership, and has experience in customer lifecycle management and a track record of delivering significant customer retention gains and growth. Paul is an experienced manager of global teams responsible for $70M+ in recurring revenue. His key skills include significant revenue generation and retention, customer advocacy, user adoption, high performance team development, along with customer value creation and operational execution.
Joseph Binestock
https://www.linkedin.com/in/jbinestock/
Joesph is the Director of Sales for the America’s a Guesty, which provides an end-to-end SaaS hospitality management software that streamlines, automates, and centralizes complex workflows and business processes with robust built-in features and a wealth of deeply integrated applications that increase productivity and revenue while reducing OPEX. Jospeh is focused on penetrating and scaling new and mature B2B SaaS markets through disciplined business analysis and innovative out of the box thinking with an interdisciplinary approach. He specialises in the full sales cycle, managing cross-functional teams of complex SaaS products in the intersection of design, technology, and hospitality, providing mentorship and the skill set needed for team members to outperform.
About Our Host
Louisa Dickins
https://www.linkedin.com/in/louisa-dickins-ab065392/?originalSubdomain=uk
Louisa started her career in property working at a well-known estate agency in London. Realising her people skills, she moved over to Lloyd May to pursue a career in recruitment. She now is a Director at LMRE, who are a specialist recruitment firm driven by PropTech and recruitment professionals, and Louisa oversees their 5 core areas. Louisa co-founded LMRE and provides a constructive recruitment platform to the new disruptors in real estate. Louisa is also on the board of Directors at UK PropTech Association (UKPA).
About LMRE
LMRE believe there is a better way to recruit. LMRE focus on a more comprehensive, client led focus delivering exceptional talent to the place at the time. They are passionate about the industry and passionate about people’s careers. LMRE spend time with each client to become and an extension of the business, and their transparency and core values help them grow with the sector. LMRE simplify recruitment and innovate with our clients and evolve the people driven, PropTech community.
LMRE website www.lmre.tech
Guesty website www.guesty.com
Contact Paul www.linkedin.com/in/pzukauskas
Contact Joseph www.linkedin.com/in/jbinestock/
Louisa
Hi everyone and welcome to The Propcast. My name is Louisa Dickins, host of The Propcast and co-founder of LMRE, the global PropTech recruitment and search consultancy. In this podcast we will explore how the digital evolution of the real estate industry is impacting the property market. The aim of each episode is to introduce you to a PropTech innovator and discuss how their work has created a shift in focus when it comes to digitising the built environment.
It’s my pleasure to introduce two executives from Guesty, Paul Zukauskas, VP of customer success for North and South America and buying stock and Joseph Binestock, director of sales for the Americas. For those who are not familiar yet with the company, Guesty is a short-term rental property management platform that enables professional hosts and property management companies to automate and streamline the daily complex operational needs from guest communication to accounting. Most recently the company announced a $50 million Series C funding, following an unimaginable year for the industry, bringing Guesty’s funding to, I think it’s just over, $110 million, which is pretty amazing and cementing it as a high funded PM’s in the alternative accommodation ecosystem and so congratulations on that guys.
In summary, what we’re going to talk through on the podcast with Paul and Joseph, we’ll talk the changing times of short-term rental, what to expect in terms of summer and winter trends, as well as some stats which shocked me, which we’ll go into in a bit. We’ll talk about their recent acquisitions they’ve made and what it’s really meant for their business. At the end, we’ll also delve into a bit about the changing consumer behaviour they’ve seen and travel recovery. Lots of us I know are looking to get back out to events, or just even take a break and go on holiday or go see our family. So I’m looking forward to hearing a bit more about that, but guys thank you both for joining me and let’s get started with the show. So Paul and Joseph, tell me a little bit more about how you both got into the space?
Paul
So I think that my journey was short term rentals is a very common one. My mother-in-law went off to Lithuania for a few months to go visit family, and then all of a sudden we had her apartment in Santa Monica and my wife was like, why don’t we Airbnb it, It’s perfect. And so we did that for a few months and you just get this rush of, I can’t believe how much money is coming in, like the NOI on renting an apartment in Santa Monica was huge. And so then we started targeting properties in Los Angeles for ourselves where we could have guest units and we got into the space that way. And one day we were managing the two rentals and I went online and I was like, There should be a way that I could publish this rental on all these different OTAs, and so I went and I looked and I was like, Oh, Guesty is doing it and I kind of just dropped it there.
Now, fast forward two years later, we’re still managing our Airbnb’s and I get a call from a recruiter talking about Guesty and this client services role. And at that point, I just thought it was kismet. I was already doing it personally, which obviously the recruiter had no idea about, and then once I got into the inner workings of Guesty and understanding their business model, I just got very excited for what these PMCS were doing, how they were growing, how they were redefining some of the hospitality space moving forward, and then it just aligned with my previous professional experiences in client services, where I was managing global teams, implementation, customer support, as well as customer success. And so all of those different factors came together with Guesty and that’s how I joined about two and a half years ago. And it’s been an exciting and amazing journey ever since. And you touched on it, which is this unimaginable year that we’ve just had where we went through all these ups and downs and talk really excited to talk through it with you.
Louisa
Awesome. Thank you so much for joining us, Paul. Okay Joseph what about you, what’s your journey to now?
Joseph
So the journey to Guesty is actually a very interesting one. So I actually started in the real estate development space developing a residential projects and I’ve been doing that for quite some time. And over that time, I was always interested in the technology side of things. So for example, learning about different algorithms and extract data about the market, or what markets are the best markets to invest in? So I always had that interest in me, although it’s the traditional residential real estate market separate from the tech side of things. But I always knew that PropTech was growing, that there was a lot of opportunities in that space. And then one day I’ve heard about Guesty and I thought that that was something that was very, very interesting. I wanted to learn more about that, also at the time for me, there was the opportunity to look for a new thing to build in my career.
And then I learned about Guesty and about the technology and the property management software that they offer and I thought it was an amazing opportunity. I thought that the opportunity to offer a real end to end solution in the space really resonates. And also as part of the traditional real estate business, there was a lot of interest in short term rentals and Airbnb’s, and other ways to increase the ROI. So I decided to go for it and started my journey in PropTech actually with Guesty. Fast forward four years, today I’m director of the enterprise sales team in the Americas and we have an amazing product to offer. We work with amazing customers for really different markets, different segments, and it’s really been an amazing journey. Mostly to see how PropTech has evolved and the future that, that lies.
Louisa
Yes. Well, if we keep getting investments, the space is only going to grow. Now you spoke about the product a little bit, I would love to hear a little bit more from both of you. What has the whole journey been, how’s it changed? And then I’d also like to hear, there must be a lot of crossover in both your roles between sales and customer success and of developing those clients. So maybe we can start off learning a little bit more about the product and its journey, and then how your teams interlink.
Joseph
Sure, so I can get things started. So basically our founders, they originally put their apartments up to rent on Airbnb, they then basically realized just how much of a headache it was. So if we’re looking between guest communication, cleanings and many other tedious daily activities basically that resulted in them becoming a property management company, helping others to manage their short-term rentals. Eventually they actually realized that the strength was in software and they submitted the idea of Guesty to the Y Combinator, which is a very prominent tech accelerator in Silicon valley, and it’s the same incubator that Airbnb graduated from and a lot of other prominent tech companies. And ultimately getting accepted and graduating. Now Guesty was built really with the understanding that professional hosts and property management companies have a ton of tasks to accomplish on a daily basis, whether it be staff management, issuing reports to homeowners or handling guest check in and checkout.
So the software as an end-to-end solution helps users really save valuable time so they can focus on what matters most to them, which is ultimately growth and the ability to scale. And today it’s really more crucial than ever that our users can rely on tech solutions as an extension to their business and in-house teams’ technology enables them to automate repetitive daily operational tasks, in order to achieve the organizational efficiency that they’re looking for and really peak productivity levels. Ultimately saving hours of manual labour per week, which was basically a necessity throughout the last year, that we’ve seen throughout COVID in which many had to downsize and operate with very lean. So definitely we managed to provide a lot of value and have a lot of impact for our users which was a real positive.
Louisa
You mentioned about quite repetitive tasks, there’s this big debate about tech getting rid of all these jobs in real estate. Obviously, I’m a big believer that no, it’s creating so many jobs, which obviously these are two brand new roles which both of you and your teams are heading up. But tech really helps scared of these really boring mundane tasks, which none of us want to do and we just need to enjoy it. We’ve learned a bit more about the product now, now Paul talk us through, how do your teams work together and maybe we can learn a little bit more about your customers too?
Paul
Yes, so essentially Joseph was on the sales side and the customer success handled customer post-sale in their customer life cycle journey. Joseph and his team do a great job of creating awareness of the product, providing a lot of demos to some commercial firms. And then they help usher the account into our onboarding phase. From onboarding, we have a dedicated implementation team that takes over and will help connect into whatever OTA channels we want to connect to. And then they work with your general configuration at that point. From there, the customer success management team will take over and help make sure that you’re fully aware of any new configuration recommendations that may come down with any new developments that our development team has provided. And so we’re there to help you troubleshoot some of the issues and make recommendations of what we’re seeing with our larger lens of the various different business model. And then what we hope to do is continue to help streamline your own operations within Guesty.
And so our entire idea is that if you’re leveraging every area of the platform that you should be, if you’re taking advantage of new beta and pilot programs that we’re releasing regarding new developments, that you’ll be a really excited customer, you’ll be a Guesty advocate in that you’ll stay with us for a long time and we’ll continue to partner over the course of many years. We’re fortunate on the customer success side, that we see a number of different kinds of business models. And we get to be on the front lines of the creativity of our clients, whether we’re dealing with large enterprise clients that have thousands upon thousands of listings and some of the operational challenges that they have with that, or if you’re a smaller property management company potentially with 10 to 20 listings and the various different challenges that you may see in more of a vacation rental type market versus the urban market where the enterprise players are. And so we get a good view of the entire lens. Additionally, Guesty has a really robust marketplace where we offer a number of different type of partners that we can plug into Guesty’s platform, and we’d like to say that our property management companies are like snowflakes, they’re all unique. As much as we would love to put them in swim lanes and say, Okay, you’re fitting this persona let’s go ahead and let’s add these certain functions and this configuration and you’ll be successful, it just isn’t that way.
And so by having this robust marketplace, we allow a lot of our PMCs to pick and choose best in class products. They can leverage Guesty where they feel that Guesty is strongest, but they can also supplement Guesty and build their own tech stack. So even though you may not have your own development teams onsite, like some of like some of our clients do, you still are able to build this unique tech stack, that’s going to cater to your operations in the way that you want to function your business.
Louisa
So in terms of keeping customers happy and obviously the extremely tough year businesses had, this leads us well into the next question. How did COVID affect your business? How did you guys manage and support your customers?
Joseph
So obviously when COVID hit, when we’re talking about late March, I believe that there was just this sheer panic that came across our business. Both for us internally and we saw it externally as well as we saw heavy regulations or restrictions on travel across borders, interstate, specifically here in California we saw entire counties ban short-term rentals as everybody was trying to figure out what was going to happen. And so that obviously led to this domino negative effect, which is well documented. You can see it across multiple industries, not just in hospitality, you saw a lot of people being reactive to the situation. Fairly shortly thereafter, I still can’t believe we witnessed here specifically in the Americas where we have the luxury of traveling across state lines. What we saw is this decrease in urban states, this drastic increase in occupancy for traditional vacation rentals. And so you saw these city escapers that said I’m sitting at home, I’m working from my bedroom, why not go and grab my family or my significant other, and why don’t we just head out to the country? Our VR customers, one’s the cleaning regulations and the understanding of what’s going to be the new standard for, for cleanliness was implemented. We just saw this heavy migration of people outside from the cities to go to these, areas.
And also what we saw is that our property management companies understood this phenomenon fairly quickly, the ones that had the correct inventory. And so we refer to the amount of days between when you book and when you actually stay in your unit as the booking window. Traditionally the booking window for a large format home would be somewhere around 60 to 90 days. What we saw is that this window dropped significantly. It became seven to ten days out that people were booking their reservations. And the reason was that they obviously were waiting to see what the environment or what the climate or what the latest news was going to be. They didn’t want to make long-term plans, but as soon as the property management companies realized this trend where they would traditionally lower their rates to accommodate last second bookings. They kept firm on their rates almost like Braveheart. I don’t know if I’m dating myself here! And so they were sitting there nervously holding on to their average nightly rates, and then the bookings would come in seven days in advance. And then those bookings where they were traditionally seeing stays around five nights or four nights, there were seeing seven-night stays, 10 nights stays, 30 plus stays, because people really had no reason to come back from their vacations because they were able to operate from these vacation rentals as if they were operating from home. And so we had this really positive impact there.
I alluded to this earlier, where we have a number of different business models that we cater to across our property management. And there’s three primary ones. There is there’s owners, so owners obviously they own their own assets and they’re able to control them. And a lot of the owners, when they saw the pandemic, they immediately just went to long-term rentals. So they saw that people weren’t going to travel in the short-term, they needed income immediately. They went ahead and they went to the long-term more traditional type of inventory. We saw there’s the lease arbitrage model in which people rent out a number of different units across a city or in a specific area. And this model saw heavy losses because people were still due the rent on those units, but they weren’t getting any of these supplemental income from the short-term rental. And so we saw a drop in a lease arbitrage model, but that lead to the growth of now what is the management model in which you’re doing revenue share across both the owner of the asset and the property management company. And that looks like the business model that’s sustained best across the pandemic for us.
Louisa
Did you predict what was going to happen in terms of rentals and have you got any future predictions for what’s going to happen in this winter coming? No one knows what’s happening in the world, is there going to be a third strain. Joseph, maybe this is something that your sales team would pick up, it’s difficult to predict, no one has a crystal ball.
Joseph
Yes, in terms of the predictions and in terms of the trends what we’re looking is really more about the sales cycle, and the changes that happened to the sales cycle during COVID, and how we made these adjustments. So basically what we’ve seen is that COVID-19 did accelerate the need to digitalize property management companies, which really helped the sales process. Especially with property management companies using legacy property management software or not using the software at all. And also talking about data, so obviously a lot of the modules in our software is about data, analytics, about analysing data to be able to predict or actionable based data. So these are all things that are very important and obviously we have implemented them during the sales process. And of course talking about numbers and how automation made the changes in terms of a property management company ability to work with leaner teams. So these are just some of the examples.
There is also a growing demand for automating more processes and these are capabilities that we have, as well as workflows of the business. So for looking at revenue management, operations such as cleaning and maintenance, communication, channel management, distribution, especially as teams of course have become leaner and smaller Also shifting the focus to more of an end-to-end solution, so that is something that has become very important for property management companies. Especially the ones who are decentralizing their system, using multiple tools. Maybe they’re looking to centralize everything with a single property management software. So that was something that we’ve seen as a trend. And of course the ability to increase marketing and distribution channels direct and via the OTAs. Just to give you an example, a lot of companies that were predominantly direct, now we see the shift into different type of OTAs. Obviously during COVID primarily vacation rental base OTAs like VRBO and also Airbnb that has seen tremendous growth in that space. So that was also a big emphasis in the process.
And last less thing that I think was also very important, obviously the sales cycle has been more focused on the ability to build rapport with customers online, via video calls emails than ever before because the face-to-face interaction was not there during that time. So that was also something very important that we’ve seen as a trend.
Louisa
You guys have been acquiring other businesses, so you’re talking about end-to-end solution, you must be able to offer a load more services. Your Porter, I’d love to little bit more about what these acquisitions have meant for your business and all the services you can now provide for your customers and hopefully help retain them. You can obviously work on the rapport, but also surely they want to stay with you if you offer so much more. Would you like to go into a bit more about the recent acquisitions?
Joseph
Sure. So basically, as you mentioned we have acquired MyVR and Your Porter recently, both moves really continue the mission to empower hosting businesses of all sizes, from family run, small businesses to enterprise hospitality brands. And this is something that is very important to us to have the ability to cater to any type of user, any type of segment in the space. It will also further the consolidation and the way that we standardize the industry. I think that is something that is very important. And we’ve seen that like evolve over the last couple of years. Obviously we see COVID as an accelerator to that and of course in terms of the short-term rental ecosystem as an alternative accommodation, we see it continuing to become more of a mainstream. So if you’ve seen hotels as the go to, now it’s vacation rentals and short-term rentals who are basically in the spotlight. So that is something very important. And with an increasing user base that expects the comfort of a home with, with the amenities of hotel, I think we are in a great position really to offer a variety of tech solutions to really accommodate a wide range of users and customers, the guests, so it’s very exciting.
Louisa
Well, congratulations on those acquisitions and obviously with the Series D, who knows maybe you guys have something else up your sleeve! Has the business got any plans for anything exciting coming up with your recent raise or what are you going to do with it? Is maybe a new part of the product coming out?
Joseph
Yes, so I can talk about the recent raise. So essentially we will use the investment and growing the team to power of course the year of hyper growth in key markets. So obviously we see this year and 2022 as years with a number of opportunities for them growth. Also to enhance product capabilities to serve diverse customer segments, onboard top-notch talent, and ultimately be a pillar of support for entrepreneurs who have built businesses off basically the democracy of the hospitality industry. And that is something that we think is key to success. And then we see that also as we see that trend accelerating over the next couple of years.
Louisa
Awesome. Well, I’m very excited to see what’s come Guesty. Now Paul, is there any other trends you want to share with us about the consumer behaviour or travels recovery, which we haven’t gone into yet?
Paul
I was thinking about the question that you asked earlier about what does the winter look like for us and what does the summer. Our marketing team works really closely with our VI team internally and they’re constantly analysing year over year reservation metrics right. And so at this time in 2019, what was the booking volume in November? And so when we’re looking at life years, we’re seeing that already where 150% higher in our reservation body right now for November and December at this time, than we were in 2020. So obviously that’s a COVID year, but really what was 2020, nobody really knows that! So we’re looking back even a little bit further, let’s use 2019 as a benchmark and see recovering the right way. Are we seeing these metrics? And what we are seeing in November and December right now versus 2019, we’re seeing 80% increases in reservations.
I think it shouldn’t be that hard for us to understand the reasons why, a lot of travellers went an entire year without leaving their homes or without actually getting out there in crossing borders or having experiences. And so once we got this little lax of, Hey, you don’t have to wear a mask anymore in the United States or people are getting vaccinated, we do see this pent-up travel demand and it is very real. And I think our property management company are very in tuned to this as well. And so they’re increasing their rates or they’re holding firm on their rates, they’re still getting these workings well in advance. So if people were late comers in June or July in the early part of this summer, chances are they’re probably not going to be able to get the type of accommodation that they’re looking for, at least in the United in late summer.
Louisa
It’s the same in Europe by the way, looking at various places and honestly the prices of through the roof,
Paul
You’re exactly right. Because PMCs know that they know that they can get those. It’s all about traditional economics supply and demand, a lot of the supply went away a little bit, what we saw owners took back their properties from property management companies during the pandemic. And they’d been a little hesitant to give them back to the PMCS because they’re afraid of what happens with the second or third wave of COVID. And so supply has shrunk a little bit and demand jumped through the roof because everybody basically has two years of vacation budget. And so we’re seeing that directly on the future booking windows, extending longer stays again that I mentioned, and folks booking higher ADRs, average daily rates, essentially with the PMC’s.
Other things that we’ve seen though, changes that happened as a result of the pandemic, Joseph did a great job talking about a lot of automation tools that Guesty offer. So if we’re looking specifically from a customer success person, where are people clicking? Where is the heat map within our system and where are we seeing increases in usage of automation? And what we’ve noticed is obviously in our unified inbox, the ability to automate messages is very important. So guest checks in, they automatically get an email, right? Guest checks out, they automatically get an email, mid stay, how’s your state going automatic messages going out to the guests. We saw a rise of 55% increase in usage in our automated messages, we saw that almost immediately following COVID. So what that let us to believe is that the teams got leaner essentially. So property management companies said we’re really heavy on resources right now, we’re offering the top-notch guest experience but is this really something where we want to invest in long term or can we automate this. And so they slimmed down their teams a little bit. What this does though, during the low occupancy season, it allowed them to focus on their operations and where they can actually maximize their return on their software investment with Guesty. And one of the key areas for them was the automated messages. Guesty they got lucky that they released these two types of features, which was the rental agreement and the check-in form. The check-in form was phenomenal because it allowed PNCs to gather a lot of user information. So they were able to take in the user’s email, their phone number,
Louisa
A great way of getting data!
Paul
Exactly. Cause they had basically these occupancy apps where they didn’t have them before. So if you were previously operating at a 90% occupancy, and because of COVID now you’re down to 70-75%, chances are that you have a few days open on the front end of a reservation or a few days open on the backend. And what the best PMC started to do is started gathered the information from the check-in forms, and then started marketing saying, Hey why don’t I give you a 20% discount if you come two days early? Because people were typically driving to these locations and not necessarily flying, PMC’s saw that they were able to extend their pay even further. Or let’s say they had some openings on the backend in the middle of the guests day, they’d say how’s everything going, would you like to buy a mid-stay cleaning? So again they can upcharge in mid stay. And also they’re able to say, Hey, we’ve got two days left on the back end of this, if you’re really enjoying yourself, we’ve got this 20% discount to stay with us a little bit longer. And so I think that the ability to tap the market and upsell now are our trends that happened, where it wasn’t a necessity prior to COVID because everyone was eating as much fish as they could gather. When they’re when the occupancy wasn’t there, that necessity of maximizing the revenue per reservation was something where PMC’s got really creative, and I think that trend is definitely here to stay long-term.
Louisa
The power of marketing and collecting good data is instrumental.
Paul
Just having that captive audience that’s having a positive experience in the middle of their stay, and then being able to monetize that positivity further beyond just the review, right? For the longest time, the only, the only real net gain of the PMC prior to the upsell was the positive. They could then correlate that review into higher ATRs and higher occupancy. But now you could even do midstay upsells, partnership programs with local community shops, bakeries, tour guides, whatever it is, everything is open now to the PMC where it wasn’t before.
Louisa
Okay guys I’m conscious of time and you’ve shared some incredible insights, which I know our audience are going to absolutely love, but the final part is LMRE part.
So L is we touch upon very few lessons you’ve learned for your career, what tips you would give to someone maybe wanting to join your business? M is obviously you mentioned anyone or a product, or it could be a partner. R I used to say was what was the biggest regret, but I didn’t think we should have regrets, so what’s the most rewarding aspect of working in PropTech? And then E is what are you most excited about for the future of PropTech? So Joseph, what’s the main lesson that you’ve learnt and a tip you would give for our audience?
Joseph
Sure, so I think that one lesson that it’s very important and that’s also from a sales perspective, is to always make sure you have the right product market fit before you actually go to market. Once you have that in place, the ability to sell the product and the ability to scale is much easier. So that is something I think that is very important. It’s not always easy to do, you have a lot of different requirements and a lot of different parameters that are not always in your control, but that’s definitely a very important lesson. But when you have all of that in place, it just everything becomes easier. So I think that would be the main lesson.
In terms of a mention, I would like just to mention our industry leading communication management capabilities, I’m very proud that Guesty offers the best in class unified inbox which basically centralizes communication across booking channels in one place, such as emails, text messages WhatsApp in other communication methods. And of course the communication automation capabilities and I’m very proud to say that we’re the leaders in the industry. And we’ll continue to be in that space. And also a force for what is to come right in terms of additional integrations, AI capabilities, more automation capabilities, so just continue to establish ourselves as leaders in that space.
I think it’s just to how the industry has evolved, how technology has evolved over the last, just over the last few years and seeing COVID as an accelerator in the space. I think that was very exciting to see and just being part of it. I think that’s really exciting across different industries that just a few years ago, you would see just legacy systems and just so much manual work. And it’s always evolving, right? You’re coming from traditional real estate, I’m sure you can see also in that space how things have evolved and also in the short term rental and vacation rental industry we see the same trends. So that that’s something that is very exciting.
What is exciting about the future of PropTech?
And about the future of PropTech I’m just very excited about how we’re implementing AI capabilities to further impact the industry. So for example revenue management, or team and guest communication, data analysis, virtual and augmented reality and much more. So these are tools that we are going to implement specifically at Guesty in the future, but it’s also very exciting to see it as the industry as a whole. And I’m just very excited to see what are the possibilities of that.
Louisa
Awesome, thank you so much for that Joseph, and Paul what is the main lesson you’ve learned in your career?
Paul
It’s funny. Whenever reflect I always think about the advice my dad would give me when I first started managing people, I said dad what should I do you’ve managed people for 30 years, and his number one lesson is “Don’t lie, son.” Transparency is so critical towards client relationships, even not just my relationship, but also internal relationships. So if you’re collaborating across part mentally, if you’re working with colleagues, employees, having had any be the courage to be transparent removes any ambiguity from the equation and allows people to collaborate on a forward goal. And so I find that specifically with clients, if Guesty’s falling short in a certain area, if we uncover and we’re fully transparent into our own internal processes, what our roadmap looks like, how we’re going to prioritize them, it allows them to plan accordingly within their own organizations. And it allows us to build a strategic plan moving forward in which we can each achieve each other’s goals. So just transparency is so critical in business to me now and so that would be like the number one lesson that I’m carrying forward and I keep trying to remind myself to implement as a best practice day after day.
Louisa
Yes, I love how It’s just being honest with people. What about anyone you want to mention, or maybe one of your providers that you want to give a shout out to?
Paul
Yes. There’s actually two areas that I want to go into, one of them is a partner on our marketplace login, Guesty recently just released an accounting module. And for our PMCS accounting has been a pain point for them since I joined Guesty too. And we would love to go to market a little bit faster than two and a half years with a module. But when you’re biting off something as intricate and involved and necessary as accounting, you really do need to build in a rock solid foundation. One you can iterate off of thereafter. And so I know that we we’ve gone through several betas with our accounting module and I think as early as last week, maybe a few weeks ago landed with GA so for our general audience are now basically enabling the accounting module.
And one of the nice things about this module is that it allows for the flexibility of the PMC. I talked about it before, how nice it would be to just put every single one of our clients into a swim lane of configuration, it just isn’t true. And so we needed to build an accounting function that was going to be as flexible as the businesses that are going to be using it. And so far it has been battle tested across large organizations, smaller organizations, and it’s really holding its own right now. And so I’m really excited for how this is going to further elevate the Guesty the offering for our PMCs, to reduce a lot of redundant tasks take away hopefully some of the hours that they’re paying all these accountants as vendors for them. And then hopefully just having that really tight financial information and knowing where your money is at any given time, which owners are due a certain amount of money is going to be just the lifesaver for a lot of our accounts. And so from a customer success perspective, I’m excited because it’s going to make my job a little bit easier as well.
And then the other the other marketplace partner that I just wanted to highlight is that we talked about this pent up demand of travel and we would all like to be responsible travellers, but there’s pent up demand in not so much responsible travellers, in the way that I would say that is that we’re seeing an increase in damage in units. And so a lot of our property management companies are coming to us saying, how do I protect myself against the potential gain here? There’s obviously a number of tools that you could do around background checks, but even those background checks can fall short at times. And so what we offer in our marketplace recently through a number of different partners has been a damage waiver program. And so this is something in which it’s a cost that you pass on to your guests, but it will cover you for liability up to between $2000-$3000 whatever plan you actually choose. And we’ve seen that the folks that have implemented this have had this ease of mind across the types of guests that are staying with them in the ability to make sure that they’re covering any potential damage that may occur. And so that’s been a really impactful area for us.
Louisa
Its worrying the damage is going up, are being getting more careless?
Paul
Yes, I think about like a rental car, right? If you’re driving the rental car and maybe you don’t know how it really works and the parking brake has been on for the last 10 miles before you realized it, you may have created some damage there without knowing it. I think also the social gathering aspect has been very real. If you just look at the recent news that may be swirling around STRs and some negatives stays. A lot of it’s been more of these social gatherings where people didn’t have a place to gather before, and it may be a little bit rambunctious.
Louisa
Understood. Okay, what’s the most rewarding aspect of working in PropTech?
Paul
I am seeing all these various different business models and all these various different clients and getting to know a lot of these founders just through conversations like this. And the most rewarding part for me is to learn about all the various different creative ways in which these owners are planning to increase their business or increase their revenues on the existing companies. And I think that this is further just being supported by just how fast the news is coming out everywhere across the STR you’ve got, you’ve got Sonder www.sonder.com who’s moving towards the stack, you had earlier in the year Airbnb with their idea, you have Casai the single largest series a from Andreeson Horwitz, which is traditionally more of a tech type of VC. I’m joining actually calls with architects, developers and property management companies all working on blueprint designs for large urban buildings, and how can they actually create this mixed use building of a third of it’s gonna be short term rentals, a third of it’s going to be this midterm stay that’s going to target the digital nomad, and then a third of it’s going to be a long-term stay. And so I think nothing legitimizes the STR space a little bit more for me, than a developer and an architect dropping hundreds of millions of dollars into a project and thinking to themselves, how am I going to accommodate short-term rentals in this offering? Because I know that it’s going to increase my NOI. And so that why I’m excited. There’s so much growth here. There’s so much money flying around, Guesty raising it’s $50 million.
Louisa
It’s super exciting, I feel like we should be talking about it a little bit more. What are you most excited about in the future of PropTech, anything to add?
Paul
I think that I touched on it earlier and that’s just the normalization, seeing how quickly the space was able to rebound and recover from such a traumatic pandemic type of global event. Even its durability or sustainability throughout the pandemic was very impressive. We saw some of the ancillary travel industries or hospitality industries crumbled a little bit, hotels really had a rough time during the pandemic. I know travel airlines and things like that had a difficult time. There was this one little bubble that I think we caught in the STR space where it legitimized the short-term rental to a lot of folks that may have been hesitant to it before. And so that’s what I’m excited about. I think that we’ve actually captured a larger market share now of potential guests than what we had before. Before folks were staunch, if I’m traveling I’m only staying in a hotel because I know what I’m getting. There’s consistency. Now I think that they’ve opened themselves up to the STR rental and they had a positive experience. They enjoyed the space, they enjoy the extra amenities of pools or whatever it may have been and now I think they’re here to stay long term.
Louisa
Well, fingers crossed for more people to see the light. And unfortunately we’ve come to the end of the Propcast, but everyone who’s listening, and if you if you’re not a convert yet, it’s definitely check out Guestys short-term rental space and just explore a little bit. As you can see, there’s so many different products which you can get with that and I’m sure Paul and Joseph would love to hear from you. If have any questions, definitely give them a shout. Thank you so much for joining me.
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