Interview Pt 2: RedAwning CEO Tim Choate on trends and the future
RedAwning CEO Tim Choate speaks to ShortTermRentalz about the company’s future and trends in the rental industry in 2019 in the second part of a feature-length interview.
- From your own expertise looking ahead, what are some of the likely investment trends in 2019 and in the EMEA? What sort of activity might be happening in those areas?
“It’s going to be very interesting with Airbnb and Vacasa reportedly possibly going public next year. If they do, that’s going to keep driving up the attention on this category. The Vacasa model in that way is very different. It’s much more of a traditional vacation manager to me because it’s a hard business to scale and make more profitable but they’ve been able to raise quite a lot of money and I’d love to see them go public, then Airbnb is a whole different end of the equation. I think the days of people investing in a website to market vacation rentals are probably already dated behind us because you already have so many websites which are so large. I think the interests and investors in property management companies will definitely go up if Vacasa goes public successfully so there could be new opportunities there and there are already some large players there.”
“I also think there are a number of private equity players out there looking at various types of roll-ups so we will probably see some of that come to light in the next year. The other one which is really intriguing but hard to grow is the type of model where they’re putting apartment-style properties within cities and furnishing the whole property. There’s a number of those out there like StayAlfred. In Europe, there’s this concept of an aparthotel but that’s a new idea in the US and so those might be considered aparthotels. I think those are areas of investment where people cannot just manage the property but build their own hotel team of apartments.”
“RedAwning markets itself as a hotel chain more than a franchisey approach as we’re trying to help property managers succeed. We’re not trying to be a property manager, manage a property directly or own a property – what we want to do is work with folks who do that and help them thrive in our marketing. Then what we’re trying to do for the guests is make the whole process more seamless and trusted.”
- Looking ahead, what sort of trends in technology do you see around the corner in 2019 and how can this bring increased ease to hotel bookings?
“We’re definitely working on the technology front. We’ve announced with Amazon that we’re working on a product together which will go into homes. We also continue to enhance our mobile app but we think there’s still a long way to go to use technology. We want to make each home follow our vision of adding consistent layers. If every home had a smart concierge in it, wouldn’t it be nice to walk into the kitchen and ask for a nearby restaurant reservation and ask what it’s like? These are things that you might ask a concierge. We see that as more of a beta product with Amazon and we’re developing that with them but that should come out more fully in 2019.”
“We’re also leveraging the same types of things in our mobile app so you can carry the concierge with you and there’ll be a lot more with digital apps. They’re already widely out there but it’s still a small fraction of the properties. I think more of these features will be adopted by more managers as the industry professionalises and develops, because in Europe, the industry has been more developed than it has been in the US.”
- Do you believe the number of channels we book through will increase over time in the next year or will we see more consolidation of a limited number of three or four channels – what direction do you see this going?
“Well Google is going to come to this party so they are doing tests in Europe already. They’ve basically announced they’re doing this not just in Europe but I’m imagining that’ll be in 2019. We’re already working with them on hotel ads and we already work with them on search apps for property managers. We will be there from the first day when that happens but they will decide when and how. I think they will be the biggest change in distribution for vacation rentals when they come to this party and so I think this will be really interesting to watch. Just like with hotels and other travel, I think Google is the starting place for the majority of searches for travel with searches going through to Expedia, Booking.com and Airbnb and so I imagine that those folks will also be engaged in it. With hotel ads it actually offered an opportunity for hotels to step up in a more direct way and I believe it will happen in 2019 and who knows exactly how it will change things.”
“I don’t think there’s room for a lot of new, smaller players because the big players are just so large. There are a lot of them out there but what we’re finding is that most of them are small and even for us it starts to get challenging if we’re going to do the work and someone can only provide five or ten bookings a month. I don’t think there’s a lot of room for them. The one area I do think there is room for and we’re going to help push is hotel chains getting involved. This way, other groups that we look at that will say we want to help develop the next channels.” We will be working with eBay and we’ve already announced that, which was unique to us. Only property managers who work with us have access to this program and eBay has a very large audience. You have to say who else has large audiences.”
“This year, we worked with Choice Hotels on their Vacation Rentals by Choice product, which is open to choice loyalty members to be able to book vacation rentals with points. We’ve seen other hotel chains with large loyalty bases rentals and what we’re helping to push is where are the existing large audiences. It is extremely challenging today for new startups trying to set up a website for a large audience as there are many challengers and large scale players in the universe of travel who have existing large audiences.”
- How can RedAwning cement its position as the second largest vacation rental network brand?
“We continue working both for our property managers and our guests in ways that are well beyond anyone else in the category. We have to keep doing that but we are a pretty unique player globally. People don’t always fully understand who we are because they associate us with channel management even though we in a way invented channel management but we do it better than anyone else. That’s just a small piece and you have to get your properties up in order to market them. We are the largest market in vacation rentals which is why we market them, I think we’re Booking.com’s largest US supplier, so we have huge advantages in that. We learn more than other people, we’re running tests all the time because we have scale.”
“When I started the company, I had no idea in terms of all the issues with connectivity, different PMS systems, fragmentation and we got through that – no one else has done that on our scale. I feel like we’re on the other side now where we have to keep pushing forward but we’ve got to have a completely unique offering for guests. Connecting an API is about one one hundredth of what it takes to be successful and we focus a lot of our efforts on connectivity. We go a thousand miles past what other channel managers do and by next year, we’re going to go 10,000 miles past what they do. The future is providing the best and most consistent experience for the guests and how you provide a full set of solutions for property managers so they can thrive. Most of these small companies don’t have a full customer service or full time tech or marketing people so you have to build a lot of things to be successful every day. We help people jump to that.