The New World – Consolidation, Reinvention, the Future
Innovation has taken over the short-term rental (STR) space and is providing new strategies and platforms for apartment owners and operators who want to generate revenue from their vacant housing units.
The corporate housing, business travel and vacation rental industries are seeing shifts in technology, guest services and consumer demand, and some service partners are stepping up with viable options.
This comes as a result of the past year’s hardship in the STR market. The renewed focus has its sights on post-pandemic living, and is accentuated by behemoth Airbnb’s initial public offering in early December.
What was learned the past year and what can happen in the next dominated discussion in the session, “The New World – Consolidation, Reinvention, the Future,” part of a webinar series produced as part of the Flexible Rentals Investment Conference.
It featured Vivi Cahyadi, CEO, AltoVita; Mickey Kropf, Co-Founder and CEO, Vector Travel; and Luca Zambella Co-Founder and Chief Executive Officer, Jurny; with moderator Simon Lehmann, CEO & Co-Founder, AJL Consulting GmbH.
“Short-term rental operations are not a monolith,” Kropf says. “Each business is different within the multifamily space. There’s not one solution for all. It’s not a winner-take-all situation. Multifamily is a giant, diverse industry. Not all companies will choose to take the process in-house, or even use their existing tech. There are partners who can do this for them.”
Kropf says the challenges that the STR industry endured in the past 12 to 18 months has galvanized the multifamily industry around “multifamily hospitality,” as he likes to call it.
“There is enough room to serve different software and approaches to the process; a full-service, white-glove approach; or an approach such as Jurny, which puts the guest in total control,” Kropf says. “Dead or alive, we’re moving on from the corporate rental model, but it did pave the way for all of this innovation.”
Zambella says he wants his guests to be in complete control. “The hotel industry needs to wake up,” he says. “STR operations such as those [managed through a platform such as Airbnb] are independent and more efficient. [Bookings and move-in] can be done by guests and hosts acting on their own. ‘Being served’ is no longer a value-add for travelers. That’s what today’s consumers are telling us.
“Consumers want more automation. Our site does this, and it creates a leaner operation and one that offers more opportunity for greater profits. We’ve grown 4x this year and now have 500 units with a 100 percent retention rate.”
Two-thirds of workers today are doing so remotely, and about one-half will once the pandemic is in the world’s rear-view mirror.
“People do not want high overhead and tons of personnel serving them,” Zambella says. “For example, they prefer a kitchenette in their [rental space]. They want ‘things’ in their space, not those same things located all around their space.”
Alto Vita is a global platform that caters to business travelers looking to book accommodations. The site aggregates a wide variety of listings to serve a variety of needs.
“Global mobility today is a tool for workforce recruiting,” Cahyadi says. “We deliver the kind of safety and quality consistency in our housing and other services that travelers need. We use technology to validate each location listed. Tech adoption and compliance usually aren’t spoken in the same sentence [but they are for us].”
Technology and software are key elements of any STR operation. Apartment operators have options of either building and owning the technology necessary, or relying on partners to provide tech solutions that fit their needs.
Vector Travel is an STR management company that partners directly with multifamily owners and operators seeking to monetize vacant apartment homes in stabilized or lease-up communities.
“For apartment operators, by owning your own technology from end to end, you can dictate your margins,” Kropf says. “It allows you to offer your service for cheaper, create more revenue and improve the guest’s overall experience.”
Please click below for the replay.