Three Business Cases for Lowering Operating Expenses
The phrase, “You don’t have to reinvent the wheel,” is usually right on the money. But when it comes to the unique players who are entering the short-term rental industry, it doesn’t necessarily apply.
The break-out software and operations needed for flex rentals often calls for reinvention, as technology providers look to deliver the right processes to fit their clients’ customized needs. It is called “flexible,” right?
These new “wheels” are helping many to drive profits for when the business travel, vacationer or apartment resident considers options on where to spend the night, spend the week or lease their next place.
Lowering expenses through the right approach was central to the discussion in the session, “Three Business Cases for Lowering Operating Expenses,” part of the Flexible Rentals Investment Conference.
It featured Jeremiah Gall, Founder and CEO, Breezeway; Mike Liverton, CEO, Jetstream; and Steve Davis, CEO, Operto; along with moderator Simon Lehmann, CEO & Co-Founder, AJL Consulting GmbH.
“Technology plays a massive role in how operators can reduce costs and improve margins,” Lehmann says.
Liverton says there’s never been a better time to shift to flex.
“Flex is not short-term and it’s not long-term,” he says. “It’s both. It’s flexible. Owners today can go out and find the tech that works for them. They can partner with us on a shared-revenue basis, so then they can worry about doing what they do best: Finding properties and running them the way that’s best for them.
His Jetstream Hospitality Solutions is an all-in-one distribution and channel marketing solution uniquely designed for multi-unit properties of any size. It empowers owners, managers and aggregators of multi-unit, short term rental properties to operate more efficiently and cost-effectively by offering best-in-class technology and services solutions that increase the guest experience, streamline operations and reduce financial risk.
Davis focuses on SaaS – simplicity as a service.
“We keep iterating and iterating and we’re getting better at it each time,” he says. “A lot of our customers are saving through technology by offering less friction in the check-in, check-out process. [Because the technology behind everything in this industry is improving], if you don’t have a seamless guest experience, you will be left in the dust.”
Liverton suggests some hotel brands could soon be left there unless they get on board.
“The hotel industry’s legacy fixed costs are so high,” he says. “Looking back, the master lease companies that failed in the past 18 months had chances to customize their software, but told us, ‘we don’t need to.’ Everything is done through touch-free systems now.”
Gall says operators need to consider: How do I put technology in place that allows the right hospitality for long-term and short-term residents?
“Long-term residents see what’s available to short-term residents, [making their stays more comfortably efficient], and they want it, too,” Gall says. “You can bundle services for them; for example, they want the easy electronic locks, too. This is what the amenity wars are all about.
Breezeway is a property care and operations platform for hospitality providers. Its software and mobile apps help vacation rental operators coordinate and verify the cleanliness, safety and quality of their properties, and deliver a better experience to guests and owners.
Operto Guest Technologies is an industry leader in developing of Smart Stay technology and smart devices for the hotel and short-term rental industries.
“When you hear companies tell you that their technology works end-to-end, that’s a bold-face lie,” Davis says. “We’re trying to bridge that gap with middleware (software that acts as a bridge between an operating system or database and applications, especially on a network). This drives unique value.”
Davis says the transition from the original short-term stay supplier partners is ongoing. New companies are nimbler and more customizable.
“If you ask whether it’s the operator or the home owner who’s going to invest in the smart-home tech needed for the future of the flex industry, it’s the home owner,” Davis says. “Costs are becoming low enough, more affordable. It will be a push-pull dynamic in getting there.”
For software developers, he says, “they are like surfers out in the ocean, waiting on the wave they want, ready to ride it. Software developers just need to find out what kind of software is needed and then find a partner to build it.”
Liverton says, to succeed, he and other firms must understand the boundaries of the problem they are trying to solve.
“Today, there are so many exciting new companies that you can connect with or collaborate with; we bring the best that’s out there to provide the right fit,” Liverton says. “Operators need to ask themselves: Is the tech that you need already out there? And was it built by someone who knows the vertical? Once this industry can establish the proper APIs, things will become more cost-effective and seamless.”
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