How to Run Short-Term Rentals Without a Property Manager

0:00Nine years ago, the launch of the application was really caught me by surprise. I I'm a very optimistic and ambitious person just as much as basically very pragmatic at the same trying to be pragmatic at the same time. I was hoping I could get hundreds of customers per month. I got two. And but nonetheless, I was completely surprised and shocked by the fact that for a product that I thought would be useful for host like me that would have one one one property, maybe two because there is one private room and one one entire home.

0:35I never realized that property managers existed in the space. And so I was shocked when my very very first property management company London did sent me an email and wanted to to buy the product same day because an existing product that they used were was not satisfactory to be doing the job on the messaging automation side. So that that that was basically oh my god fantastic moment just as much as but wait I never took that genuinely into consideration about the product. I build the product without really looking into research or discovery or business model or any kind of those things because it's better to be frankly to in my view to be shipping rather than basically spending your time discovering here.

1:18I got the contact and basically they got me okay we will need to rebuild the product with with a mindset that it needs to be easier for users with larger portfolios and that's which original application was not done for. So basically few years later in 2019 that basically became became a reality. U and I think that was really the first lesson. There are many of those because I'm very proud of being the stupidest person in the room all the time. The the there were there were many others.

1:50The second and most structural important one is that at the beginning and for a long time we really didn't want to become a property management software. And the the reason for that is I believe there was really a great case of being the expert at doing the one thing that you want to do better than everyone — such as messaging automation and being part of everyone's stack. The game of a property man software is a lot broader and it's and it requires immense depth.

2:25So yeah and everyone told me that no you cannot become a PMS. It's it's stupid. You're going to die anyway. The the thing is just that it's not really up to us. The reality of it is that in most cases basically a game that is played with a booking platform themselves. And we progressively had to move towards a property management software model. To be fair, it expanded to a level, the scope of a product itself organically expanded to a level where it started to be seen more favorably and was more strategic to be the one source of truth.

3:02But unlike many other alternatives that started with this view that we're going to be the source of truth, we're going to be the the record of all the the important reservation or property data that you have. We had to start it from from the from the opposite direction. Basically we had a product that had full features but now we needed to be to become that source of record. While we had been rather tolerant or flexible on how the data is inputed for example.

3:33So you can update things on the booking platform or on hospitalitable that was completely fine with us. — No and yeah the really the paradigm in the industry has been really that no you need to be to be a property management software. And when you say source of record, you mean like everything is done through hospitalitable. You don't go directly to the to the booking sites. — Yeah. So even that is even ambiguous. — Yeah. — I I want to go full on pedantic here. The reality is that the source of truth really in this industry and in this space means that the booking platform checks the property management software.

4:12If the listing is available, what's the price of that listing? That's a completely different change of of the infrastructure is that basically we we build things so that we are sending data to the booking platform and the booking platform just fundamentally has to check its own database and then knows whether the plat is available the unit is available and what at what price here it's the opposite basically they are checking on us for every single reservation that we have. So to give you a bit of an idea of the of the challenge that's several billions of dollars of customer payouts that def facto needs to be authorized at one point by by hospitalitable depending on the time of the day a minute of outage can cost our customers something around between 3,000 and $50,000 per minute.

5:01And so we are paying extremely close attention to this and there are very good benchmarks that we are that we operate on. So I think we're really being being great on that. But just there is a certain sense of responsibility about what it means. — You know, you you you cannot be down on those critical path of the of the product. So that's the that's the the actual change in a in a in the nature that's happening when you become a property management software. — Wow. Yeah. I I thought there was a lot of stress in just managing a few properties, but you talk about stress across billions of dollars worth of trans — several hundreds of thousands.

5:42— Wow. So, so I'm curious then as as things evolved and you became a property management software, which I I totally see your point because we personally we looked at lots of property management softwares as we were kind of exploring this and it's everybody wants absolutely everything to be perfect on every in every aspect of the property management software. So the scope like you said is is massive when you start to develop a product like that. But what I guess for for you and hospitable, who would you describe as like your ideal user today and and what are the major benefits that they see specifically?

6:24— Yeah, it's funny because there are always those conversations. I think historically it has been true that we were really focusing towards those self-managers that have let's say up to seven properties. I've been guilty of saying that myself for for several years. So there are probably quotes in the wild of me saying hospitalitable is the best fees for less than seven for self-managers with less than seven properties. That's not true anymore. We we really you can have owner statements. We have owner payouts. We are going to be launching a property manager marketplace to help property managers scale.

6:58We have multiple customers that have hundreds of properties that are running on hospitalitable. It just what I believe is that it's a nice what hospitalitable is really known for and really special I believe in this in the space. It's just it's a great place to get started. — that's what I want that's what I mean by that. It's basically if you never use a property manual software before I recommend you give it a try. Because it is self-service. It has a free trial and honestly you already have out of those two filters eliminated 90% of the market.

7:31Everyone else wants you to have a call for qualification, a meeting with an account executive. Then you're going to have an onboarding after signing the contract. You've not seen a pixel of the product but you're already being in push towards sales sales funnel. You have the implementation team etc. Everything is self-service with us. It's it's very opinionated in this way. So that's that's what I mean is basically people that have never used the property management software before are this might be quite a bit of a jump. But this is basically the best product that I believe exists in the space to basically go from that transaction which means going from dependent on the booking platform tools to creating your own workflows and thinking of yourself more like a business owner rather than a marketer on another booking platform.

8:18And from there move you towards a multi- channelannel strategy where that doesn't go where you don't have to go crazy because you have multiple inboxes, multiple calendars, prices, strategies, content — which we can we cannot do. So that's that's really is really important to respitable. But there is also the reality of it which is that one in eight customers become at some point service providers that may be helping out a friend that has a property and they want to have to help some with a me some messaging.

8:50That can be a full-blown coasting property management service and that happens organically. So the idea is what can we need to be able to work with them no matter what because it will be so so so annoying so so dishing for everybody that basically we've put we put all of that work and effort and now somehow because the business model is changing everything needs to change no we are supporting property managers to be scaling their their their business that means for example pay your team that means cleaners that means everyone that basically is contributing all of this transit now through hospitalitable that can be paying out your owners under which model you have and that can be also helping you acquire more owners altogether

9:39And we're ideally positioned for this because we have owners we have property managers on each side so we can help u have one side talk to to the other. — Yeah. Yeah. And I I I think I have conversations weekly with people who are in the the shoes of somebody you just described that they've never used a property management software before. They have a few properties and they're very hesitant because they've heard about kind of like the struggle of getting it all set up. And so what I guess what are the big benefits that you would expect somebody to see you know who's who's just going to go from having two or three that they've they've managed directly on the platforms like Airbnb to now they have the hospitalitable in place what you know is there certain like what

10:27Should they see like quality increase on their their properties or what's what's the biggest thing? Yeah, there there will be so many the I think first is going to be I'm going to preach my inquir but I think the part where you can have the most impact is basically just simply going to be on the messaging automation. — right now the single channel host will be dependent on the messaging automation that is set by the booking platform onable just like on another property manual software. You are going to be able to design and craft the experience that you would like to your guest to be having at the time, the place before before the reservation, after the checkout.

11:08And that's going to be particularly key. You can retrieve the data points for your for your guest and you are able to have a more organic and natural relationship with them that doesn't have to be necessarily involving all the steps towards the booking platform infrastructure. Second bucket is gain some sovereignty. Go direct. It's actually is the number one channel in the United States. It has been the case for literal decades when that's data literally coming from payment processing. So that's actually coming from directly from Visa and Mastercard.

11:41You can launch a direct booking website. What you said about property management software is exactly the same for direct booking website because my goodness do you think I have a budget for a direct booking website? I don't even have a first reservation and that that's where the mind the people minds go but then sure what what about your payment processing and your chargeback risk whenever you have a reservation from a guest that gets canled are do you know that you are still liable for the payment processing cost what about the tax compliance what about the insurance and damage protection what about the vetting from your guest because now you're allowing everyone on the internet to be booking your property it's not just great that the card works because that may be stolen.

12:25Meanwhile, they get access to your property and that may not just quite work. So, we're really happy about our own approach which is merchant of record which means that we we bundled everything that you need to rebuild the booking platform experience. We just under your own terms. There is no person that's ever going to be overriding your terms with your guest. But we so we facilitate without without interfering but we take all the cost and all the risk. So for example we charge backs with payment processing cost underwriting we do the guest verification we do the the protection insurance in case your guests are causing some damage on your on your property and we do the tax compliance which means we are the factor becoming a very significant booking platform just on behalf of of users

13:14Directly. So I think those are kind of the two things where that are relevant for everybody on the advantage you can get out of out of using a PMS. First messaging automation then second direct. But obviously starting there there is the obvious of distribution. If you are dependent on the income from a single channel, you know that when you open Facebook on social media and you have that account being taken being taken down, listings being suspended, you basically are putting all your eggs in one basket and that egg that basket might not be the most reliable one at assessing quality or opportunity.

13:55So you should be diversifying towards multiple platforms. It's le it's the case for every business. This is a marketing channel. They know they're a marketing channel. Okay? They they're they're not pretending anything else. But for a business like ours, we would do ad on every booking, every platform that we can do ads and we assess which one works and we we discuss we we think about what's the best language we can use for each of those of those marketing platforms for those ad platforms. That should be the same for every host for short-term rental property.

14:27So that that's basically is what happens and our job here is really to make that seamless to make sure you don't have to reinput all the details and the listing is looking great on on your other booking booking platform and I think that's really to the advantage of host especially in the United States. I think there is the world cap that's coming very soon and bookings that are occurring. There might be some travel from the United States, but there is also some international travel and the the booking platform where you are right now might not be the one that is actually used by your guest and so there is really a strong competitiveness across those this market now in the US and that's coming that's coming really fast.

15:10Yeah, that is so true about the direct bookings too, like you know, owning your your your customers, you know, and the the communication between them. In the beginning I think about how we just cobbled together different systems to try to get some direct bookings and and it just has grown more and more the longer we've used the PMS software is that we can now market directly to those people to come back and book directly with us and and so now like if there's a big change, which you know there always seems to be with tech you know, we're not held hostage by the the Airbnbs and verbos and direct booking or the the the booking platform.

15:51Forms like that. I'm I'm curious. So So sometimes, you know, being small and agile has its benefits, but the the disadvantage to the larger short-term rental operators is that, you know, a lot of times they just have a bigger budget to to invest in the property management. So I know you guys are working or you're you're rolling out a new tier of of your offering. Can you can you share a little bit about this and how this, you know, might help some of the smaller, more agile investors? Yeah.

16:22Well, the self-managers. I don't like when we call them about small or big or large. I'm I'm 6' one. What a big mix. Does that make me a small operator? Come on. No. I I like the framing of it. Is that Yeah, there may be a perception that it's only for for the big guys to be investing into software. And frankly when you look at the prices that are being shown on websites or basically are communicating more or less privately probably a good reason why there would be some anxiety around that.

16:55— it's I think we live in times of compounding very very rapid change and that will probably crumble in the next few months. The reality is that every property management software is always integrated with the same APIs and the connectivity to booking platforms is the facto a commodity. So we wanted to be the f the one having the the first strike in this. So we're going to be releasing a new plan which is going to be which is called essentials.

17:28That is the the first we believe industry first plan that offers full challenge management capabilities. So you can connect with all your booking platforms you know Airbnb, Verbbo, Booking.com with uncapped number of properties. So you can be an operator with one property just as much as you could have 300 at no fee, no recurring fee. So basically there is there might be cost and fees but basically none of that is basically mandatory.

18:01So you can have connectivity with your booking platform and booking platforms with the challenge management without having to feel like you're going to pay $70 per property. The price would be exactly $0. We're there there are so many reasons where we where we're doing that. It's not in reaction to anything recent. The reality of it is that I had this wild rogue ideas for six to six to eight years really since the very beginning of hospitalitable and we're now basically at a point where it's actually it's actually possible and even desirable for I believe for for the industry.

18:40The I think we touched on that a little bit earlier about basically the benefits that you can have at PMS. One of this is simply just the the opportunity to generate more revenue. M — and yeah, I was talking about messaging automation and direct as a big ticket item. The reality is that every day that's going to be a lot more modest, but that can be something like a way to collect funds for an early check-in, a late checkout that is going to be automated and is going to be direct to the to the to the guest.

19:11And we we found a way to basically align the incentive there. It's simply we're we're going to have we we are going to be making money out of that essentials plan. It's not a gimmick for marketing for just some time. It's actually something we believe is going to be sustainable where we're simply going to be able to make sure that we are going to be returning you money that we actually it's not free, it's less than free. We actually gonna be able to help you generate more revenue and just basically ensure you generate more ancillary income out of your property on top of what you're generating from your from your booking platform and progressively build a strategy where you can emancipate and become more sovereign as a as a host.