US: STRz speaks to Steve Schwab, founder and CEO of Arizona-based short-term rental franchise management company Casago, about his route into the industry, how the company sets itself apart with Casago University, and the key challenges facing the market at the moment and in the coming years.
- Please introduce yourself, Casago and the service you provide for the short-term rental industry.
My name is Steve and I’m the founder and CEO of Casago, which is a vacation rental and property management company headquartered in Scottsdale, Arizona. Casago operates as a franchise, providing opportunities to those with or without existing property portfolios to align with a national brand that manages thousands of vacation rentals across the USA, Mexico and the Caribbean.
At Casago, our goal is to provide our valued customers with a rental that’s like a home from home. We have a set of standards that certify excellence in our property management services and the rentals we offer, which help us to give our guests memorable experiences and put Casago top of mind for their next vacation. We currently have partner operations in 51 destinations across Mexico and the United States, with more than 7,000 privately owned homes and units managed.
- You have an interesting background. What led you to go from being a part of the military to owning your own vacation rental company?
After serving in the military as a US Army airborne ranger, I went to New Mexico State University to study criminal justice. After graduation, I took some time off and went to Puerto Peñasco, Mexico, for the summer. I met a lovely couple who owned a small beach home rental company and began working odd jobs for them. When the husband passed away a short time later, I bought the company.
I changed the business’s name to Seaside Reservations, but as we expanded into different territories, the name ‘Seaside’ was no longer fitting. A rebrand to Casago seemed perfect for a company with a long-term vision to be the most well-known vacation rental travel brand in the country.
- How does Casago set itself apart from its competitors?
While the franchise model isn’t new, the way we operate is. Most vacation rental franchise companies want you to align with them straight away, whereas we recruit new offices from startup, all the way to large established enterprises who want to have corporate level resources and support available to them.
We’re also proud of the fact we have – what we believe – is the only university for the vacation rental market in the world. Franchisees come to Casago University, in Rocky Point, Mexico, when they first join for a two week training programme that teaches them everything they need to know for their business to flourish.
This year alone, the university delivered more than 8,500 training hours to newcomers. You get access to training and all the systems Casago uses from day one – and it’s ongoing. Property managers can access the Casago University website whenever they like for a refresher.
Another unique aspect of Casago is that franchisees get their property portfolio added to the Casago website. With a domain rating [DR] of 55, and a huge amount of new and returning traffic to tap into, this can help business owners generate more direct bookings for their rentals.
- What do new Casago partners learn during their time at Casago University, and how does it equip them to grow their own business?
They get the whole package! The initial training teaches our values, ethics, operational procedures, and culture. Franchisees are also taught how to use our software systems, including their own iteration of our enterprise property management system [PMS]. There’s a lot to get through, with an exam at the end to test what’s been learnt. It really is a case that you get out what you put in.
Everything we equip our franchisees with sets them up for success, including the backing of a huge community and ongoing support – but they have to grab the opportunity with both hands and run with it.
- What changes when a property manager goes down the franchise route?
The beauty is, as a property manager, you never have to ‘go it alone’, and going down the franchise route doesn’t have to mean a loss of autonomy at all. In fact, quite the opposite. What we try to give franchisees are the tools and means to take their business to the next level, with the backing of a like-minded community who will support them at every step.
One of the immediate benefits is being able to leverage the reputation of a company that has already won the trust of thousands of owners representing hundreds of millions of dollars worth of investment. And then there’s the wealth of training and best-in-class software that property managers can access, which can help to make processes more consistent, efficient and perhaps even automated in parts.
- What are the biggest challenges facing the vacation rental market today?
One of the biggest challenges we’re currently facing is tighter regulations in the short-term rental space.
Earlier this month, Colorado made the news after advancing legislation to classify many short-term rental homes as commercial properties and impose a much higher tax rate. We can certainly expect to see more of this in the coming years. The problem is in creating fair policies that can actually be enforced. Without the enforceability, these policies won’t work, and it’s likely they’ll result in even stricter regulations coming into play.
Another challenge is the over-supply of vacation rental properties. This puts compression on the average daily rate [ADR] and creates a cut-throat industry. To get eyeballs on your properties, you have to employ a multi-channel approach to your marketing rather than relying on a single avenue.
Unfortunately, the issue of over supply may result in property owners selling up because they’re not yielding the return on investment [ROI] they desire. This, of course, frees up homes for the residential property market, however, it can be detrimental to tourism.
- Looking ahead to the next few years, what do you think will be the biggest trends in the short-term rental space?
You can’t get away with not mentioning AI here, can you? AI will continue to play a bigger role in guest communication and travel planning in general, from how people book their vacation rental to where they eat and what they do for fun. This is great for property managers who can leverage AI to analyse market demand, competitor pricing, and historical booking data to optimise pricing strategies, to give an example. AI can also assist with day-to-day activities such as handling customer enquiries, inventory management and check-ins and check-outs.
I also foresee we’re going to start seeing some margin compression happening in the online travel agency [OTA] space since Google announced it’s introducing price comparisons to its travel searches for vacation and short-term rentals. This is great for travellers as it’ll give them more transparency and choice, but it’s going to make the market even more competitive.
- What is your vision for Casago?
At the heart of Casago is its community. Our values and what we’re all about are the first things we teach people when they attend Casago University. Ultimately, our vision is to create opportunities for local property managers who we empower to be their own boss, while having the support and backing of a widely-recognised vacation rental travel brand. We want each and every one of our partners to build out profitable property management companies in their local area, along with good quality connections with the local community, the homeowners and the guests.
Every single person has a part to play in the journey we’re on, and for building up the trustworthiness and credibility of Casago, which results in guests returning time and time again because of the experience they’ve had at one of our properties.
Casago CMO Alex Husner will join an expert panel on Tuesday 21 November [4pm GMT] to discuss ‘Building a short-term rental brand or empire’ – register at no cost at this link.