Urban Living Insights: Short-term rentals review
UK: STRz held its second Urban Living Insights: Short-term rentals event on 26 April at the Stratford Hotel in London, focusing on the growth and investment into urban and holiday rentals, prior to the holding of the 2023 Shortyz Awards nearby at the ArcelorMittal Orbit.
The event was hosted by STRz editor Paul Stevens and AJL Atelier CEO Simon Lehmann, bringing together more than 40 attendees to network with and listen to the insights of a range of industry thought leaders during a series of presentations and panel discussions. PriceLabs and Hubbl were sponsors for the ULI event, while the Stratford Hotel was a supporting partner.
The short-term rental sector has evolved dramatically in recent years due to an increase in levels of industry-wide professionalisation, the injection of venture and private equity capital into the segment, and the entry of new players that are contributing to an ever-developing merging of hospitality and real estate asset classes. Over the last 12 months, around $2 billion has been raised in funding rounds across the short-term rental space, the SPAC and IPO markets have dried up due to turbulent economic conditions as firms weigh up their next move, mergers and acquisitions have continued to accelerate, and there is still lingering uncertainty about the knock-on effect caused by the collapse of Silicon Valley Bank on startups and companies.
Following an introductory presentation by Stevens on the investment landscape across the sector, Lehmann kicked off proceedings with a panel on ‘Investment trends’, at which point he was joined by Miguel Nigorra Esteban, partner at Fifth Wall, Morgann Lesné, partner at Cambon Partners, and Jeremy Gall, founder and CEO of Breezeway.
In the opening statements, Gall established that “great companies will be funded at every stage”, even during challenging economic times like these, seven months after his company, Breezeway, raised $15 million in a Series B funding round.
Nigorra Esteban, who participated in corporate accommodation platform AltoVita’s Series A round in December, said that any business model needs to make sense in current times, to the existing staff and the company itself, for a business to remain stable and up to date. He also highlighted the importance of competitive advertising in the hospitality industry because of the abundance of similarities in each service provided, so providers must focus on proving that their service is superior to other competitors in order to be the “new shiny thing” in the limelight.
Meanwhile, Lesné, whose company Cambon Partners helped to facilitate an investment transaction for French campsite franchise Les Vacances Camping Paradis, suggested that the market was in a strong place and that it was easier to raise capital now because of how well-rounded the overall short-term rental product has become. He also added though that companies should try to have enough funding to sustain their businesses for around a year as it could take up to six to nine months for funding rounds to go through.
The discussion also touched upon ways to deal with fragmentation with investors, including how companies should create their own opportunities for investment and how investing in technology and incorporating it into various asset classes is crucial in current times.
The second session, hosted by STRz editor Paul Stevens, centred around ‘Scaling a short-term rental / hospitality brand” Building a pan-European VR company’. Among the featured panellists were: Aurelie Lepercq, CEO at Edge Retreats; Veronica Rivas, director of international business development at Homes & Villas by Marriott Bonvoy; and Karen Hanton MBE, founder of toptable.co.uk, and co-founder of Pets Pyjamas.
When it comes to expansion, Hanton said that brand consistency is a vitally important factor – which is all the more significant given her experience in founding, launching and selling brands in the online restaurant booking service, luxury and pet fashion markets. In order to be consistent with your messaging and to know your target audience, a good amount of “desk research” is vital, according to Hanton.
Lepercq’s Edge Retreats last secured funding in November 2021, when it also appointed HomeAway co-founder Carl Shepherd to its board of directors. She expanded further, saying that, with consistency, it is also important to understand the audience’s needs and regulate the uniformity based on each customer base that locations get. She added that sometimes trips are planned with specific expectations and alongside brand consistency, the specific intent needs to be addressed.
Rivas, whose company Marriott launched its home rental offering [now Homes & Villas by Marriott Bonvoy] in April 2019, proposed that brand consistency can be defined and maintained by first looking at feedback across all platforms as it is a means of listening to people’s individual needs and addressing essential touch points. She said that vetting property managers and asking them to use technological advancements to enhance their customers’ experience would also help maintain consistency and customer satisfaction.
In addition to customer and vendor satisfaction, perfect financial execution in structuring capital raises is also paramount to scaling and maintaining consistent brands, as well as the ability to sell multiple – and memorable – experiences for guests / customers / users.
The third and final session was moderated by International Hospitality Media [the parent company of STRz] CEO Piers Brown, who was flanked by speakers such as Fausto Vieira da Silva [strategic partnerships lead at PriceLabs], Luca Zambello [CEO, Jurny] and Demi Horvat [CEO, AirDNA] to explore ‘What’s next for data, tech and AI? Enabling smart short-term rental decisions for enhanced profitability’.
On the subject of AI and complete automation, Zambello stated his belief that AI can be used widely for customisation and management, while interactions with customers can also be completely automated in terms of guest self-check-ins – something Jurny is working on to achieve.
Vieira da Silva, however, indicated that not everything can be automated by AI because of differences in needs. He said that if people want to get away from their normal lives, they will not enjoy being around the same technology that already dominates their routine, adding that it could potentially compromise customer efficiency.
Zambello countered the argument by saying that artificial intelligence and technology are constantly developing and any delay in integrating them into the system would make the services provided outdated. He opined further that avoiding automation could instead put a business at a disadvantage compared to its competitors.
On the other hand, Horvat gave the example of using voice assistants. She said that when she walks into a short-term rental or hotel room, she expects the lights to turn on the same way they would in her home e.g. by “asking Alexa to turn the lights on”, and that if nothing happens, it will ultimately disappoint people e.g. guests.
While so much more can still be understood about the complexities and potential of AI, the AirDNA CEO shared her insights into how artificial intelligence can be used for content generation and marketing. Other ideas put forward by the panellists included employing AI to first solve efficiency in operations before completely automating the booking process and guest experience, and creating a vertical hospitality business using AI to use its full potential in the future.
A big thank you to our hosts, guest speakers, our sponsors and supporting partners [Hubbl, PriceLabs and The Stratford Hotel], and attendees for contributing to this year’s successful Urban Living Insights event.