US: With conference season now in full swing, the first-ever FLEX [Flexible Rentals Investments] Conference took place in San Francisco this week, with a number of the largest players in the multifamily short-term rental space present over the two days at the Mission Bay Conference Center.
With ShortTermRentalz and Serviced Apartment News represented as media partners for the inaugural FLEX Conference, the likes of Sonder, Lyric, Airbnb, The Guild were on hand to answer questions from attendees as exhibitors and saw business leaders speak on stage to the gathered audience.
The event, organised by Steve Lefkovits and Dennis Cogbill from the Joshua Tree Conference Group, was described as the premier US education and networking event for investment professionals engaged in enhanced uses for multifamily housing inventory.
It involved a series of panel discussions focusing on the challenges, opportunities and future of the multifamily sector, including corporate and furnished rentals, short-term rentals, licensed lodging, mixed lodging and residential uses, and the master lease model. Also featured was a keynote session led by AJL Consulting’s Simon Lehmann.
Prior to the launch of Day One of the conference, ShortTermRentalz participated in a tour of the Airbnb headquarters close to the event venue, as the short-term rental platform was also a partner of FLEX. The tour gave an insight into the sort of projects that Airbnb is currently working on [albeit top secret] and it was immediately striking how each office section had been designed in the form of short-term rentals based all across the world.
After a welcome speech by Lefkovits, Tiffany Baker [Lyric], Elizabeth Winkle [Smith Travel Research] and Donald Davidoff [D2 Demand Solutions] presided over the first talk in a pricing and revenue management workshop.
As well as outlining the different models in the short-term multifamily space [consisting of specialist STR property management firms, pop-up hotels, corporate housing intermediaries, DIY STRs, STRs as an amenity], the panel analysed how the travel industry is now evolving more into alternative accommodation, and as such, there is seemingly a ‘confluence’ and a ‘blurring of defined accommodations’. For that reason, urban-based multifamily accommodation should no longer be seen as a niche offering.
The other takeaway was the importance of data when it comes to understanding how short-term rental companies are performing and are benchmarked against their competitors in the same space. To be aware of this, the trio was in consensus that firms must be ‘winning’ at both supply and demand sides of distribution.
Following that, Eric Bache [Reservation Software], Todd Butler [Niido] and Felicite Moorman [Stratis IoT] highlighted access control, revenue management, luggage storage and resident home sharing tools as the four key challenges facing flexible living communities that can be resolved by technology.
As individual tenants seek to sublease units on OTAs and hospitality brands and corporate housing providers verge towards securing master leases, firms will also need to adapt to an ever-changing urban population, with the current global urban population figure of 3.7 billion people set to double by 2050.
In the final session before a networking break, when posed a question about how risk and reputation management would affect transient guests, NoiseAware co-founder David Krauss made the prediction that so-called ‘flexible living spaces’ would constitute 25 per cent of all multi-family units by 2030 as travellers’ and families’ preferences for unique experiences and flexible living arrangements evolve, particularly for example in co-living spaces.
The second day powered through a number of insightful discussions and case studies, with particular emphasis on topics such as tech innovation, debt financing and creating exciting and memorable experiences for guests.
It kicked off with a noteworthy keynote presentation by AJL Consulting CEO and co-founder, Simon Lehmann, who made a series of keen observations on the current hybrid hospitality space.
Among his gambits were:
– The only asset that vacation rentals have is the trust of the owners and they are now under pressure to deliver high-quality standards so they do not get bad reviews
– The next big ‘monster’ in the space is OYO – it operates under a hybrid hospitality model [hotels, homes etc], it already has more rooms than Marriott and has completed a number of high-profile acquisitions in recent months, such as Belvilla, @Leisure Group and Danamica
– ALTIDO is one of the newest property management companies on the block after four separate companies brought their businesses together earlier this year
– The key differentiator that brings together the likes of Sonder, Adagio, Domio, Onefinestay, Frontdesk, Lyric and Stay Alfred is that they all offer great locations, unique design and great service
– The vacation rental industry is now entirely ‘host-centric’ – too much of a good thing can however risk oversupply, higher lease fees and lower RevPar, which can contribute to lower profitability
Later that day, Sonder made their entrance at FLEX with regional director of real estate, Rikesh Patel, underlining the company’s growth in recent months. In the three months since he arrived at Sonder, Patel said the company’s employee numbers had almost quadrupled from 300 staff to 1100 now.
One of the overriding themes of the day was how to create great guest experiences without the infrastructure that a hotel possesses.
Among the panellists was Kasa director Elena Goldblatt, who highlighted how her firm had taken to ‘tech and absolutism’ to improve guest experience, including implementing robust screening, house rules and special requests. She justified this by saying that proprietary guest flow emphasises ‘security and safety’ for guests and makes them feel more reassured that their care is being prioritised.
Goldblatt added that Kasa was aiming to introduce 24 /7 check-ins without on-site staff [following a lengthy research period to determine guest preferences] and the development was being planned for a Q1 launch in 2020.
Rachel Harvey then took to the platform to explain Airbnb’s approach to guest experience, which centres around four key design principles – Hosted, Placeful, Domestic and Transformative – as it looks to design an end-to-end trip for travellers.
This helped to illustrate the company’s goal of providing a service that promotes a world where ‘everyone belong anywhere’, as Harvey suggested this is driven by both experiences and known connections. According to Lehmann, 500,000 + companies worldwide now use Airbnb for business travel lodging as the platform looks to diversify in line with the trends of increasing urbanisation and the blending of work and leisure [bleisure].
As the attendees filtered out of Mission Bay Conference Center, there was an overriding feeling that the first event of its kind had been successful in bringing together representatives from across the multifamily and flexible living space industries, and there was anticipation for future editions of FLEX.
For more information, visit the FLEX Conference website here.