US: In this latest feature, ShortTermRentalz speaks to Alex Allison, co-founder of hospitality firm and vertically integrated real estate fund, D. Alexander, about changing consumer needs and the challenges / opportunities involved in managing a high-quality property portfolio.
- Please introduce yourselves, the D. Alexander brand and the services you provide in the short-term rental industry.
“I am Alex Allison, co-founder alongside Dustin Abney of D. Alexander. We are the only hospitality brand that owns homes (including tech, operations and data) for group destination seekers in popular locations across America, so guests can experience consistently memorable trips at a time when group travellers need it the most. Today there is no product built for the needs of groups, specifically architected and engineered from home to home and we are changing that. Think what you love about vacation homes, meets what you love about your favourite boutique hotel, packaged with an elevated hospitality experience.
“The core benefits are superior to what is available today from home to home. But we are not simply looking to deliver better or what people expect but do not get. We are delivering something that is radically different and we operate through principles of continuously out innovating ourselves for guests first….. an experience to surprise and delight, deliver what guests expect consistently, provide in ways they least expect and create value in areas guests do not know they need. We have big ambitions – we are building the next generation of group hospitality with a brand that signals a unique depth of value to the people we serve.”
- Why did you decide to set up D. Alexander in the first place and what is it about the short-term rental market that gives you optimism that you can have future success in this space?
“I am a vacation enthusiast that is passionate about creating memorable experiences for others and building world-class leading brands. I love real estate as a category and an asset class. I bought my first home at 19, got my real estate licence and a year later, I got into real estate tech and was part of the founding team at Dotloop where I stayed for over a decade and through acquisition by Zillow. Dotloop was a radical shift from industry norm, not just the product but our approach to customer service and building a brand that had meaning backed by experience and value for consumers first. As a result, the majority of residential deals flow through that platform, changing out how life’s biggest moments happen today. Both real estate agents and consumers alike now spend less time with the stress of the transaction, more time with their clients, family and friends.
“My long-time friend, now business partner and D. Alexander co-founder, Dustin and I, have been travelling together with our friends, families and large groups for the past decade. When travelling, we could not find great rental homes that aligned with our consumer expectations. The basics, like confidence that what we see online is what we are getting, the same look and feel, all of the value that comes with corporate ownership and oversight, a great sleep experience. We know the disappointment that accompanies renting a home that does not live up to the expectations that were promised or pictured. D. Alexander is our next adventure and the future of hospitality for destination seekers, making a radically different experience for groups with great homes available to the masses. We are the only group hospitality brand that owns its homes, including tech, operations, and data, so guests have access to top-tier vacation spots with the same value and memorable experience that we all expect with world class hotel brands.”
- You define yourselves as a hospitality brand and a vertically integrated real estate fund – how does this differ from a standard property management company and what makes it a first-of-its-kind hospitality brand?
“It starts with ownership. We own and operate the assets through our real estate fund which provides ultimate control over our homes. We are the first to own, operate and engineer a brand experience for groups at this scale. Without full control over the homes, it is challenging to build consistency from home to home and maintain brand standards or brand value. We identify the problem in the marketplace today as a control problem in that the majority of short-term rental homes are owned by individuals, most often they are someone’s secondary home, operated by an outside management company.
“Memorable group hospitality requires a commitment to quality beyond what has become the acceptable norm. This is not something an outside management company has control over. By owning the homes, we are able to differentiate the properties in unique ways and ensure we are maximising the group travellers experience every time. There is no reason that large groups travelling together should have to settle for a second tier experience. And if you want to test the basics of the thesis ask yourself, would ALL of the individual owners of vacation homes allow their manager or a hospitality brand to paint their homes whatever colour they wanted, or turn their master bedroom into a game room for groups?”
- How do you see consumer needs developing in the short-term rental market? Do you think there are any trends we will see emerge over the next 12 months in particular in this respect?
“The way that people buy and sell real estate is changing as is the way that people travel and the types of lodging that they choose. We saw this first-hand at our prior venture Dotloop, then at Zillow after acquisition. Positive change, innovation, and evolution across any category is a good thing. Even more so when it is as integral to society as real estate and memorable travel experiences. Consumer needs in the short-term rental market are fairly consistent with what they expect in traditional forms of lodging, yet, the way that those needs are met might look slightly different. This can include the basics like knowing what you are getting and descriptions accurately reflecting the property, new and quality furniture, bedding and sleep experience, care products, technology, amenities, cleanliness, privacy and security.
“The single-family short-term rental category is at the precipice of massive change due to the evolution of consumer (traveller) behaviour and expectations and the category maturing at large. 2008-2013 was about making homes easily accessible to travellers (Airbnb), 2014-2018 was about revenue management, scalable systems and tech-enabled property management. We believe that 2019-2024 will be about institutional ownership, the creation of a new real estate asset class, and guest experience to align with mainstream hospitality standards and traditional forms of lodging.”
- What are the main challenges in terms of operating a portfolio of single family vacation homes while delivering a consistent, high quality guest experience akin to a boutique hotel?
“The more challenging aspects of delivering a high quality guest experience that measure up to a boutique hotel are all about the consistencies from home to home and in each trip. This includes a consistent look and feel aesthetically, a consistent mobile-first check-in process and customer service experience, a consistent flexible check-in/check-out policy, well maintained homes and market based pricing and terms. However, because we own all of the homes it makes this process much easier as we are able to ensure that all homes are of the same quality, decked out with our branded amenities (Malin + Goetz care products, linens (Italian), and entertainment (Polycade ultimate gaming console) etc.) and our tech and operations are all managed in-house.”
- What plans do you have for future expansion and are there any significant obstacles that might affect this growth?
“We are on a mission to create an entirely new category and the most loved hospitality brand in the world for group destination seekers. Everything that we do maps back to that – we are building an operational machine that is made for infinite scale and maximum efficiency with the team, economic model and experience at leading a category to take it there. Our early momentum, pace of execution and results are a reflection of our ability to achieve this audacious vision.
“The key to our success continuing is in remembering that “customer is KING”. Delivering memorable experiences and value to guests, and creating a relationship with the guest is paramount. We focus on “creating customers for life”. World-class leading companies must prioritise their customers above all else, to survive and thrive over the long haul. It is the only means to continuously deliver superior value to those that matter most.
“We are laser focused on delivering consistency and memorable experiences to more destination seekers at scale. We do that through continuously growing our real estate fund and acquiring more great destination homes. You can expect D. Alexander in a number of new markets across the US next year.”
For more information, visit the D. Alexander website here.