UK: Short-term / vacation rental industry leaders, ranging from CEOs and founders to investors, property managers and OTAs, gathered in London [18 October] to address the key topics and questions facing the segment and how it is positioned in the wider travel, hospitality and real estate landscape.
The event, hosted by International Hospitality Media [the publisher of STRz] at Skyline London, covered everything from mergers and acquisitions [M&A] activity to investment, regulations, sustainable hospitality, loyalty, payments and more.
Check out our key takeaways from this week’s inaugural Summit:
The M&A and investments market
In the opening panel session of the day, representatives from DC Advisory, Thayer Ventures, Eight Roads and Viadi Group discussed the prospects for upcoming investments and M&A in the short-term rental space.
Nam Quach from DC Advisory warned that a period of stability is needed while a gap remains between buyer and seller expectations and people adjust to the new normal in terms of valuations, but presented an optimistic outlook that more transactions will take place when that happens.
Meanwhile, Phil Lolís from Thayer Ventures highlighted the challenges around investing in a “pure operating platform” at the moment, suggesting that he was looking at the OpCo / PropCo model in the hope of finding “a future Marriott of the short-term rental sector”, weeks after Hyatt announced the launch of its new vacation rental platform.
Growing your inventory: the pricing, supply and demand dilemma
Leaders from rapidly-growing operators in the United States [VTrips] and Europe [NUMA] underlined their positions in relation to organic growth vs acquisitions.
VTrips CEO Steve Milo said that his company was currently focusing on organic growth by adding more owners, given that the cost of equity and debt is too high at the moment to grow via acquisitions. On the other hand, NUMA chief revenue officer Nick Abrahams discussed how operators were needing to act “smarter” in order to monetise their assets effectively, at a time when his company has recently closed a Series C funding round and is expanding into new markets across Europe.
Creating smarter regulation for everyone
STRz Summit attendees heard from two sides of the regulatory conversation, with Paolo Lavaggi [European Commission] speaking virtually alongside Máire Ní Mhurchú from the Irish Self-Catering Federation and Steve Lowy [Association of Serviced Apartment Providers – ASAP].
As the European Commission prepares to finalise the adoption of its proposal for short-term rental accommodation regulations in Europe by the end of the year, Ní Mhurchú and Lowy questioned the implementation of regulations in their markets so far, as well as the motivations behind them. The pair agreed that regulation alone will not solve all of the problems related to the availability of housing as there are still grey areas between restrictions in certain markets around maximum lengths of stay and registration schemes.
Looking forward, they called for governments across Europe to bring in more [and better] data and to increase their knowledge of the sector so that they can value its importance to national economies, as well as get to the root of the issues around a lack of affordable housing without scapegoating the tourism industry.
Sustainable hospitality: Unlimited desire vs limited resources?
Bringing sustainability to the forefront of the Summit agenda, a panel consisting of Thomas Loughlin [Booking.com], Ufi Ibrahim [Energy & Environment Alliance] and Rachel Parsons [New Forest Escapes] emphasised the need for clear and segmented communications to educate all levels of customers, leaders and accommodation providers about how they can get started on their sustainable paths and transfer it into their practices and marketing.
In particular, Ibrahim spoke about how the current definition of sustainability is “inaccurate” as new areas come under the focus of the law, with businesses coming under the spotlight for so-called “greenwashing” claims, companies or buildings being required to make climate or sustainability disclosures or sign up to energy performance certifications, and investors increasingly scrutinising the ESG [Environmental, Social and Governance] commitments of potential firms to join their business portfolios.
Parsons added that an ‘Action-Intention’ gap must also be bridged to encourage businesses to balance profitability with their ESG responsibility and encouraged businesses to add in brand values of ‘delight’ and ‘de-guilt’ to underline the benefits of being a more ethical travel business.
The new hybrid flex rental opportunity
The growth of flexible rentals as a mainstream asset class in recent years presents a large-scale opportunity for operators offering short- to extended-term stays due to growing demand from remote workers and digital nomads and healthy occupancy rates, as discussed by Lisa Yeh [Sentral], Matthew Ede [Greystar] and Francesco Zanella [Starwood Capital Europe].
Despite the difficulties facing the market with a lack of investment limiting the amount of new products to help with the affordable housing crisis, the panel raised the issue that apartment operators are currently sitting on assets that they are not yet maximising.
To make the most of this opportunity, the speakers suggested that operators will have to diversify their revenue channels and introduce dynamic pricing across their range of products to appeal to more clientele. There is also scope for a property management system [PMS] to be successful if it successfully bridges all three asset classes [multifamily, short- and long-term stays].
The STRz Summit presentations can be downloaded on our agenda page here.
Stay tuned for more information soon on the 2024 STRz Summit and contact Paul Stevens at email@example.com and Jordan Ashford at firstname.lastname@example.org if you would like to get involved.
Doron Meyassed, CEO, Plum Guide:
“What brings me along to the STRS is speaking with other individuals running companies and understanding what they’re seeing and thinking – it’s an idea exchange and I’ve learnt loads.”
Henrik Kjellberg, CEO, Awaze:
“It’s always good to meet industry colleagues and those that are doing different things within the sector – I think there’s a lot to learn from that. Meeting as humans, face to face, is extra important these days. My takeaway from today is how much the industry is innovating, and how much we need to work together especially when it comes to lobbying efforts and regulation.”