UK / Worldwide: STRz speaks to Dave Payette, founder and CEO of London-based property management software provider 365Villas, about standing out in a competitive PMS market, the latest trends that managers and operators should take into account, and how widespread regulation will affect his and the industry’s customer base.
- Please introduce yourself and 365Villas and the service you provide for the short-term rental industry.
I’m Dave Payette, founder and CEO of property management software [PMS] provider 365Villas, operating in the greater vacation rental space. In addition to offering a comprehensive PMS and channel manager, we are heavily invested in providing high-end integrated website themes. Founded in 2017, we have clients in over 60 countries and an extensive range of integration partners providing niche solutions through our services.
- You have an interesting background. What led you to found a software company for the vacation rental space?
My beginning in this industry started with a single vacation rental on the Kona Coast of Hawaii, which I bought about 15 years ago, just before the 2008 financial crisis kicked in. It is a property that I still have and rent out today.
During that time, I had been working predominantly for multinational corporations providing complex technology solutions to large enterprise clients in international markets. So, I had a very full-time day job but also the need to monetise my new property.
As there were very few options available to me in terms of property management companies in West Hawaii, with my extensive background in technology, I decided to take matters into my own hands and develop my own tech stack to help with the running of the home as a business. That’s how 365Villas was born.
- In your view, what are the biggest challenges facing the STR industry over the next 12 months? How does 365Villas support its customers through the challenges?
I think the biggest challenge is getting cut through online in an industry both bursting with opportunity but also highly competitive.
The OTA channels have absolutely transformed our industry by bringing it into the 21st century and giving property managers all over the world the chance to access a total addressable market far larger than they could ever have dreamed of reaching previously.
However, as property management companies have used OTAs to expand, it’s become easier for competitors to do the same. That’s why it’s important they don’t just exploit the benefits of OTAs but do more to add value to the guest experience so their portfolios and businesses do not become overly commoditised.
This requires property managers to work hard by putting their own unique signature on core competencies and promoting whatever value proposition they are offering the market, whether that is predominantly portfolio-based, service-based, destination positioning, or a combination of all three.
In order to do this, a modern, high-performing website that is regularly updated and fully integrates with other online tools and tech infrastructure is crucial. The pendulum is definitely swinging back, with portfolio websites being a high priority again for growth-oriented managers.
We’ve invested heavily in providing these kinds of solutions because we see the integrated website as a fundamentally important component of the overall success of a property management business, right up there with the PMS and the channel manager. Today’s market trends are validating that view.
- What are the biggest emerging trends going to be for managers and operators?
There are several, and I would start by pointing to clear trends we are seeing among travellers and guests in this industry. Today’s guest expects convenience and immediacy. It’s not enough to be professional and provide helpful answers. Property managers must also be quick to respond and, wherever possible, provide tools and technology-based solutions that enable travellers and guests to help themselves too.
Another trend relates to data analytics. Most of 365Villas’ growth-oriented managers are looking at data all the time. This includes market data, as well as data analytics related to their own performance as well as the behaviours of their owners, staff and guests.
A third trend is around an explosion in services. Again, as a means of differentiating themselves, property managers are expanding the flexible booking options and service offerings they provide to their guests and working hard to make those things as easy as possible to procure and access. We see this happening more and more in this space.
- Why are there so many PMS providers in the STR space? Can the industry continue to support so many?
I think much the same could be said of the operators for many of the same reasons! The first reason is because the business opportunity is clear, coupled with the fact that the job looks deceptively easy, when in fact, as we all know, it is not. Of course, the channels make it relatively easy for almost anyone to get started in STR with a relatively small portfolio, but now that the industry has matured, and channel consolidation is largely completed, competition is fierce.
However, this industry is massively diverse in terms of different ways of operating and market positioning. As anyone who’s been in this industry for any time at all will know, you could have two identical short-stay properties right next to each other run by two different managers in very different ways, and yet both will be run successfully.
It is this diversity in working practices and the ability to put your own signature on your way of doing business that offers great opportunities for everyone.
Regarding whether the market can sustain so many PMS platforms, new entrants that under-estimate the complexity of the business are going to struggle and, equally, so are legacy platforms that have been around for a long time but fail to continually innovate in order to keep their systems fresh and modern.
Those who thread this complex needle well are going to continue to thrive, in my opinion, and, yes, there is still room for many, because there are only a relative few that are currently really up to that task.
- What differentiates 365Villas from its competitors?
Firstly, we are heavily service-oriented. In any complex technology-based business, this is hugely important. Not only do we pride ourselves on our excellent customer support, but we also engage regularly with our users to get their feedback so that we can fully understand their evolving needs.
The second thing that differentiates us is that we are constantly innovating, not just at the feature functionality and solutions level, but also at the user experience level. For instance, we continually invest heavily in our interface, which is now in its fourth generation. Few PMS providers do this, but it’s really important.
Third is that we’re an all-in-one provider and in the prime ‘Goldilocks’ position of being around for just the right amount of time – almost ten years now. We are in that sweet spot of being highly experienced but not around so long that we are dated in any way.
Fourth, our own next-generation, professionally designed WordPress themes are fully integrated with the software for an out-of-the-box solution so anyone can get a new, fully modern website up and running quickly. The sites are optimised to convert lookers to bookers as much as possible.
Finally, above all, I would point to our strength in what we call integrated architecture. There are so many ‘what if’ moments for property managers now that if they had to do everything manually it would be completely unmanageable. A single guest request or change to a booking can trigger a cascade of dozens of other things that also need to change.
Automating these processes to free up time is what integrated architecture is. It’s how the platform is able to second guess the next thing a property manager might have to do and get it done before they have even thought of it.
- How concerned are you about the worldwide move to regulation of the STR industry and the impact it may have on your customer base?
The trend is very real and it is concerning, particularly in certain markets. We’re seeing it where my own rental is located in Hawaii, but even more so in big cities such as New York City, London, and many regions throughout Spain, which remains one of the biggest markets in the industry outside of the United States.
For this, I think there are both real-world strategies and technical strategies to be employed.
First, managers definitely want to stay abreast of these potential developments in their area, and play an active role in engaging with their local representatives as well as contributing to industry organisations that are fighting on their behalf.
But they should also consider branching out to other regions or countries so that all of their eggs are not in one basket. We already see this happening amongst our customer base, where they are diversifying their portfolios for this reason.
Finally, from a technology perspective, since regulation will come with increasingly onerous reporting and compliance requirements, it is important to have a powerful and highly flexible PMS system to support you with this reporting.
- What’s the one killer question you’d recommend property managers ask when trying to choose a PMS for the first time or considering moving to a new partner?
I’m not sure that there is just one question. When it comes to choosing a PMS I think property managers should ask the provider about ALL areas of the system rather than focusing on any one area. Ask questions about the PMS’ feature-functionality, usability, service ethic, quality, value for money, and innovation.
Ideally, if you are a property manager and you are choosing a PMS provider, you should request multiple in-depth demos to ensure the system is comprehensive, works well, and that its user experience is good. Doing this will also test the provider’s service ethic, which is really important. If they cannot be bothered to spend extra time with you in the sales stage, you should not expect them to be any different later when it comes to support.