The Secret Sauce of Altido

Vanessa: Tell us shortly what you’ve been doing before Altido and about your current position. 

Tom: Sure, so before Altido I was running a property management company in London with my business partner William. We grew up together and developed a property in London and Chelsea and off the back of that, we then started getting short-term rentals. We started experimenting with Airbnb and that led us into setting up our own company called the London Residents Club.

PARTNERING INTERNATIONALLY

Vanessa: How did that transform into Altido?

Tom: So we’ve been running London Residents Club for the last four years and we met a lot of guys in the industry at conferences and all sorts of events and felt we had a very similar mindset to a lot of people in the industry. We saw a lot of expansion into new markets and thought about expanding ourselves into new markets in Europe and elsewhere.

As a result we thought there may be some sort of partnership that we could pursue, so we talked to a few of our friends in the industry who had similar mindsets and ideas, and met up. That was about a year and a half ago. As things progressed, the group got a bit smaller, and we were left with like-minded people, with the same vision, the same portfolio. 

One day we had a dinner and said:

“Right, we’re either going to do this or we’re going to stop” , and we all decided to go through it. We had to sort out the legal part for six months after that, but we signed the papers on 3rd of May this year (2019).

Vanessa: How many companies came together and what are their names and locations?

Tom:  At the moment, we are 4 companies:

• London Residents Club
• BnB Buddy in Scotland (Edinburgh and Glasgow).
• Hintown in Italy, they are in most major cities in Italy
• Rent Experience in Lisbon, who is also expanding into Porto

The plan is to integrate the businesses and then, as we go forward into the new year expand by partnering with new businesses.

Vanessa: So what does it mean grouping together? What do you share? 

Tom:  So when we started having high-level conversations we went down lots of different paths of how we could actually partner together. Soon we decided that this could only work if we all put all our chips on the table.

So we set up a holding company, Altido, which owns the four businesses outright. It was a merger of equal parts and so we all own 25% of it. This meant that cross charging and sharing costs and tech became much easier because essentially it’s one company.

Vanessa: So, since May, how are you doing? Are there a lot of fights going on? 🙂

Tom:  Not too many fights so far, it’s been busy! We’ve actually been working together for about a year already so last year we had already chosen the best from each company to form our management team.

The challenge at the moment is integrating our businesses, so making sure we all use the same software, have the same operational processes, have the same quality of linen… Everything really has to be consistent and aligned.

CONTROLLING THE INVENTORY

Vanessa: What is the Altido brand? What do you stand for and who are your customers?

Tom:  Altido stands for “A Life That I Dream Of” and it’s 4 companies. Before, we were very much focused on property acquisition and on property owners. But as Altido we want to be much more focused on the guests because that’s where we see the future of the industry. So, this has really been good for us, to move away from the property manager and more towards the guests. We’re doing this through various methods but one is to create our own booking platform to start targeting return customers and also start looking at grabbing some market share from the big guys in the long term.

We’re also looking at controlling some of our inventory. So, bringing on more guest houses, more service departments, and that way we can control the guest experience more and more.

Vanessa: So your customers are leisure? Business?

Tom:  At the moment it’s all sorts. We’ve done quite well at trying to target both leisure and business. So, we have different products in our portfolio that are very much focused on business. You know, we have service departments, places that have a consistent level of service, self check-in, good Wi-Fi etc…

And then we also have a number of villas and high-end accommodation for people wanting a more unique experience, whether it’s a 6-bed house and next to Harrods or whether it’s a single-bed villa in Italy. We’re trying to target all the different types of customer segments.

Vanessa: So when you say you’re going to go for service departments does that mean you are going to rent them full-time? 

Tom:  Yes, we have two different models, and we’re looking at creating this master lease model, a bit like some of our competitors, when you rent for a number of years, renovate and design to an Altido design. We’re already building an Altido design team. We also have a management model where we just charge like a standard commission to do the management.

Vanessa: Do you think brand and the consistency of the identity throughout every apartment is something really important? 

Tom:  In today’s market it’s really important but it’s a real challenge keeping a one bed flat in Edinburgh, 6 bed house in London and a villa in Tuscany consistent. But consistency is an absolute priority for us.

When you book on Airbnb you are not really sure about the quality of service and that’s where we see ourselves come in. We want to provide the service whether it is a villa or a one bed flat. We’re also looking at building out three different product lines so we will have three tiers of service: Altido affordable, Altido lifestyle and Altido luxury.

PARTNERING WITH LIKE-MINDED COMPANIES

Vanessa: So are you looking for investments, this must cost a lot of money, to rebrand all over all of you inventory right? 

Tom: As four companies one of the things that brought us together is that we were all profitable. So we all had our own profit that we have built over the years with none of us essentially sought investment before. It meant that we had some internal finance to be able to fund this integration and some of our tech.

But, we are looking for investment at some point, as I said you know, our first goal at the moment is to integrate our businesses. Integrate our operational processes and then come the new year we’ll be looking outside for new partners, for new opportunities and start expanding across Europe.

Vanessa: How are you going to expand, through acquisition of other property management companies? Is that the plan? 

Tom:  Yes, in short. I think we’ve seen a lot of acquisitions happen in our marketplace that have been maybe not done that well or with that much respect of the founders and I think that’s where we try to bend the trend a bit.

You know we didn’t have investment to help us much. We kind of came together under a unified vision and mutual respect toward each other. Going forward we want to really work with like-minded businesses, with founders who want to be part of the bigger picture and who aren’t looking for just some cash and sort of end of the road kind of thing.

We’re looking to become more than just a partnership model and I think there’s a huge amount of opportunity out there. You know, we’ve had a lot of guys who came up to us and they’re quite interested already.

BUILDING GUEST FACING TECH

Vanessa: So in terms of tech, what have you built and what do you outsource? 

Tom:  Each companies came with different tech: in Portugal they had built a neat accounting software, in Italy an owner’s dashboard and in Scotland & England we had focused on using the best 3rd-party tech companies to enable us to grow and scale.

So, going forward, we’re definitely taking the Portuguese and the Italians tech stacks. Tech is also one of the reasons why we’re looking for investment next year, to start building out some of our own tech and we’re looking for investors who’ve been involved in tech before. Because there’s only so far we can go with 3rd-party tech. I think we need to start building some of our own tech but at the moment we don’t actually have our own tech team.

In terms of a PMS system we’re very much aligned with Guesty. We’ve been using Guesty in London from the start actually, I remember being pitched to by their CEO five years or so ago. And so we’ve been journeying with them right from the beginning and we’re pretty happy with them. So we agreed, as a group, to use Guesty going forward. 

So, I think the PMS build is probably a few years off, but interested in all types of other tech…

Vanessa: Okay, you have your PMS sorted with Guesty and then you’re going to build what on top? 

Tom:  We talked about the importance of consistency so I think we’ll be looking at building our own guest-facing software and concierge-type apps or similar. So really trying to curate the guest experience and tech can definitely help us get there.

PARTNERING WITH MARRIOTT

Vanessa: Let’s talk about distribution. How do you choose your channels? How many channels do you choose a year? How does that process work for the Altido brand? 

Tom:  Sure, so you might have read about six months ago that the London Resident Club partnered with Marriott Homes & Villas. They are a new booking site so that’s certainly something that will hopefully also be announced very shortly in terms of the Altido project. I think Marriott have been great so far, they have been a brilliant partner for us. There’s been a lot of communication in terms of developing their end and helping us with our side of things as well.

In terms of other niche channels we work closely with The Plum Guide. In London, we’ve been with them from the start of their journey and certainly for our higher-end properties they’ve been brilliant. And then, we’ve used Rentals United with Guesty for a number of years as well, as a sort of target multi-distribution for Airbnb and Booking.com.

CLOSE-KNIT CHANNEL RELATIONSHIPS

Vanessa: So you’re not looking to to find more distribution channels at this stage?

Tom:  I think we’re always interested. However there is a danger I think when you start spreading yourself too thin, that’s when you start losing the ability to properly develop those channel relationships. We’re professional partners with Airbnb across the group. And they also have been incredibly helpful in developing our portfolio with us. And, it’s really important for us to maintain those strong relationships.

From a consistency and a relationship management perspective, it’s very useful having very close partners.

Vanessa: What about midterm OTAs, you know OTAs that would take 30-day bookings?

Tom: Yes there’s a lot out there. Again, probably take a similar line to Stay Alfred, trying to not spread ourselves too thin, focusing on what we’ve got at the moment. We also have our own channels, all “grown-up” booking sites, so we do get some bookings direct and that’s an area that we’re looking to grow as we expand. So we’re always open but also selective.

NEW ENTRANTS & BREXIT

Vanessa: Your industry predictions for 2020? what do you think is happening in the industry?

Tom:  Without being too much for prophet, I think we will see more consolidation. We’ve seen the start of it over the last couple of years… I think there will inevitably be a few booms and a few busts and that presents opportunity for consolidation.

From our perspective, we see the future becoming much more guest-focused. There’s been a lot of focus on property acquisition and the guest has been sidelined… so we want to make sure that our operations and consistency of services are the best out there. It’s really important to us.

I also think we will see more different players getting involved. The developers and agents out there have been hesitant, but the market is proving itself more and more, so I think we’ll see more and more big players getting involved.

I also think there will be more regulations so we want to work with the different councils and the different governments to make sure that we’re ahead of the curve.

I didn’t really want to mention the b-word on the podcast 🙂 but Brexit is obviously on the forefront of our minds and hopefully we’re very protected from it. We operate pan-European but we’re paying close attention to it. Potentially it could be good thing for London tourism, if the pound drops, you will see more tourists and there will be a lot of opportunities for us still.

Vanessa: Well, let’s cross fingers for you. Thanks for sharing everything about Altido with our listeners, viewers and readers. I will put the links into the comments, so that everybody can click and go and see. Thanks a lot. 

Tom:  Thanks a lot Vanessa.