GuestReady operates in 6 locations across 2 continents
In only 3 short years GuestReady grew from 0 to 2500 short-term rentals. The company has a strong focus on organic growth but also found M&A an attractive way to scale. Boots on the ground in Asia and Europe are key to running smooth operations and reassuring owners of their professionalism. With various shifts in their distribution strategy GuestReady needed a strong channel manager partner like Rentals United. You can watch the full interview on YouTube or listen to it on Apple Podcast, Spotify, Google Podcast (US only). More stations: https://anchor.fm/secretsaucepodcast
|№ proprietà connesse||+2500|
|Sede centrale||Londra, Regno Unito|
|Tecnologia utilizzata||Rentals United + Outswitch|
Annunciare numerose proprietà in modo efficiente e accurato su tutti i siti di prenotazione
Mantenere tariffe competitive con aggiornamento in tempo reale su tutti i siti di annunci
Automatizzare le operazioni per concentrare le risorse a far crescere il business
It's better to focus on a few channels, do them really well and understand exactly how to work with them. We work with global and niche.
3YEARS IN BUSINESS
Vanessa: What were you doing before GuestReady and what are you doing now at GuestReady?
Alex: Before GuestReady I was in a very different industry, which is the food delivery industry. I was working for a company called “Food Panda” and we were helping restaurants to get bookings, to get orders for their food, and then also we were delivering this food. A very different industry but in the end we were doing something similar which is basically using technology to coordinate a lot of offline processes in a seamless way.
I took inspiration from “Food Panda” for GuestReady, where I am the co-founder and CEO now. We started it three years ago and the goal is to help property owners unlock the value of their real estate. We are managing all the processes that are required for running short-term rentals for them and we're building our in-house technology to be able to do this in a seamless way.
Vanessa: How many properties do you manage?
Alex: By now we're managing about 2500 properties.
LESSONS LEARNED FROM SCALING ACROSS TWO CONTINENTS
Vanessa: Tell me about the scaling process because in three years 2500 properties, what's the key to scaling so fast?
Alex: I would say we did something pretty unusual from the beginning on that we started in several cities at the same time. We started at six cities when we launched, which was pretty crazy I would say. Because, usually, you just build this sort of business from one city and then you go from there you maybe add another city and it just grows organically.
We started in six cities, which meant that initially we just had one person per city which then also meant that I started in London and I needed to run all the operations, get the first homes, clean those homes, hand over the keys and all of that. I'm quite happy that we moved on from those days but it was also a good learning experience to really know the business from ground up.
I think this laid the foundation for our scaling across different markets, which I think is a hard part of our business. That, in one sense, it's very global. If you think about distribution or what guest wants, the guest expectations, those sorts of things are all very global. But when you think about the supply side to property owners, the local circumstances those are actually hard for local.
I think this starting from several cities at the same time really gave us a good foundation for scaling across different cities.
Vanessa: These different cities are where, the initial ones?
Alex: Those different cities, we are now in the UK, in France, Portugal, Dubai, Hong Kong, and Kuala Lumpur. The original cities were actually Hong Kong, Kuala Lumpur, London, Paris, and we also had a trial in Amsterdam and in Singapore which in the end didn't last. We didn't get the traction that we wanted to see and that's completely fine. We just focused on those cities where we saw the best traction.
Vanessa: Why didn't it work in Amsterdam and Singapore? What did you learn?
Alex: We had from the beginning this approach where we said, okay let's try this in a few places. Because in the beginning also, three years ago, we weren’t that familiar with the whole industry with each single market. So we looked at mostly the market size, where do we see a lot of properties … on platforms such as Airbnb. And then we said if there’s a lot of properties then there must be demand for our services. But in some places like Amsterdam or Singapore we just didn't really quite get the traction so we said, well, already we don't have that much resources, let's focus on those markets where we get the best traction.
Vanessa: So that's how you are going to scale in the future? You're going to continue trying to become number one in those cities or are you going to open new cities?
Alex: Going forward, we are of course much more analytical. We analyse much more each single market before we enter a new market. So, it’s different from the very early days when we just launched a business and just jumped into it. Now we know what's required. We look at a lot of different factors for each single market and make much more rational decisions when opening a new market. I think that approach worked pretty well for us. We opened Lisbon and Porto with this approach, we opened Dubai with this approach those markets are doing really well for us.
BUILDING A STRONG B2B BRAND AND CONSISTENT GUEST EXPERIENCE
Vanessa: What is the GuestReady brand? What does it stand for? What does the brand stand for?
Alex: We actually did analyse internally what we really stand for has two aspects. The first is related to performance and the second one is related to delivering a personal service.
For the first one that is more about performance is about getting the best returns for owners, being tech savvy, having the best tools, dynamic pricing, optimisation, automated payments, mobile apps for managing the operations, these sort of things. On the other side of the spectrum, it’s about providing personal hospitality service both hosts and guests. We want to use technology to actually provide this service at scale.
We see that each of our hosts has a unique property, they have unique circumstances, and the same for the guests. Each of them is looking forward for a unique stay and we want to be able to provide this hospitality experience for them. This is the two sides of the spectrum and we are trying to combine those two sides in our brand.
Vanessa: How do you keep the brand consistent? Is it important?
Alex: Actually, for GuestReady we focus mostly on our brand towards the owner. I think it's about having really good operations and being able to show that to the owners with past experiences, with reviews. We also got some good media exposure, The Times or Tech Crunch and some of the regional newspapers.
This helps all to build up this trusted brand towards owner. We also won a service apartment awards. We were named one of the top start-ups in the UK and in Switzerland as well. These things really help for our brand. Owners really inform themselves before they come on board with the property manager. They're really involved.
When it comes to branding towards guests that's harder to do because we work with individual hosts and they have each unique tastes. And we actually feel that's okay because also our guests have unique tastes. I think that's also what the sharing economy is all about. That it's not just a hotel where each hotel looks the same.
Each of our properties might be different. What we want to make sure, though, is that towards the guests we have a consistent brand in terms of the experience. So, you can expect that you have 24/7 somebody that you can call if something is not working well. You have you know you have Wi-Fi, you have as a spotless clean apartment, hotel quality linen towels, all sorts of things that you would expect from a professional place but it doesn't mean that each property looks the same.
THE ADVANTAGES OF THE “BOOTS ON THE GROUND”
Vanessa: You’re active in very crowded markets. How do you how do you make sure that owners sign up with you as opposed to with the competition?
Alex: I think it's about proving that our operation capabilities already during the sales process. We make sure that we always have somebody available to talk to the owners, that we're reactive, that we're on the ball when answering questions owners have. We also have people on the ground in each city.
I think that's something that not everyone in our industry has but for us it's important from a commercial side to understand the market, to understand which areas can work well, which areas maybe don't work, what sort of interior is required and just understanding the local laws as well, the requirements that differ city by city.
Vanessa: You say you have people on the ground. How does that work? And is that one of the challenges for scaling internationally to find good people on the ground?
Alex: I would say people are at the core of our business and our success is driven by our team. So, it's very important to have good people and team. And, of course, for every scaling business that's one of the challenges to find the people. So far, we were pretty lucky and I think we were also able to rely on our network to find people. If not then we were actively going out scouting the market for people that could be a good fit.
Because one thing that is a bit unique about our industry, I would say, is that there's not a long history. There’s not that many people that know this industry for such a long time already. We need to look at similar businesses that have similar types of experience where we can recruit from and that's worked pretty well for us. We looked at other companies for example food delivery, where I'm from, or operations start-ups.
WHAT MAKES A GOOD PROPERTY MANAGEMENT ACQUISITION
Vanessa: Did you acquire any other company?
Alex: Yes and actually that’s also a good way to scale for us. Originally we said we wanted to build the best product, the best technology and scale organically but we had pretty early on an and opportunity to acquire a competitor called Easy Rental Services. That worked out pretty well for us I think for both Easy Rental Services but also for us. Since then we've been more open to such opportunities and have done two more acquisitions with a Oporto City Flats and also BnBLord last year.
Vanessa: So that's three acquisitions so far, how many more next year?
Alex: Actually news go around and since we’ve announced those acquisitions we get quite a few smaller and mid-size property managers reaching out to us and seeing if there's an opportunity for them to join GuestReady. We’re looking into those opportunities carefully and I think we're quite open for such opportunities in the future.
Vanessa: What makes a good property management acquisition? How do you evaluate if they’re good?
Alex: I think it really depends if it's in new markets. I would say that the team is really important because we're going into a new market with this team. If it's an existing market, it's much more about the portfolio that they manage. In some cases, technology could be interesting but we have our in-house technology. So, usually that’s not really something that we look at but there might be some good learnings also from that side. It's really different aspects that can be interesting.
BUILDING OPERATIONAL TECH AND BECOMING A SOFTWARE PROVIDER
Vanessa: Tell me what have you built in terms of technology and what do you outsource? How many programmers do you have?
Alex: We have a tech team of about 20 people and what we’ve learned pretty earlier on is two things: that there are a lot of good solutions already on the market so from the beginning we don't need to build everything in house. But also we learnt that if we want to be adaptive and scale fast then we do need to have our own in-house technology.
From the beginning we said that the solutions that we don't see that much out there is everything that comes after the booking. So for everything that is more operational related to running the underground operations, the task management what we call the payment processing for example, the relationship with the owners. And that's actually the core of what we build in-house. By now we have everything in-house except of the channel management.
Vanessa: Because channel management is very hard, isn’t it? Leave that to the experts?
Alex: Yes I think that's right. It's also something that there are some good solutions out there so we are happy to work with them and then focus on the other tasks to build in-house.
Vanessa: Are you planning to outsource your technology to other property managers?
Alex: You will be pleased to hear that we are one step ahead now. We already have a few property managers that are using our system. This grew organically: we told other property managers in the market about what we have in-house and they got excited about the opportunities that this could give them.
We were working on ways that we could give this technology also to other property managers and now we already have several partner property managers that are working with our system and it’s working really well for them. I think they get the same benefits that we got at the time of scaling: they basically have more free time thinking about business development because operations are more optimised.
SHIFT IN DISTRIBUTION STRATEGY AND WORKING WITH NICHE SITES
Vanessa: How does distribution work for you? How do you choose your channels?
Alex: We had a few shifts during our strategy. Initially we worked only with Airbnb because when you start a business from zero you need to keep it simple. We needed to learn a lot about operations so decided to just focus on one channel. I would say Airbnb is a channel that works pretty well and they have a lot of technology already to automate or to help property owners to rent for example taking care of payments.
Our vision actually for GuestReady is to help owners to unlock the value of real estate. We can't do that if we’re just on one channel so we decided we needed to be on all the channels out there. We went ahead and listed on as many channels as possible and then again a shift happened where we realised that we're on a lot of channels but some channels didn’t get us many bookings, so it wasn’t really worth it.
It's better to focus on a few channels, do them really well and understand exactly how to work with them and get most out of those channels. We cut them back a bit so we’re now in between. I would say we focus on a handful channels. The biggest one plus we also add a few niche channels that have a good booking potential that are more regional or more focused on a specific niche market.
Vanessa: Would you mind sharing the niche sites that you’re working with?
Alex: We’re working with Plum Guide, we're working with Homelike. Those are two good examples where they curve out specific segments. Plum Guide is a bit more upmarket and Homelike is a channel that is more focused on mid-term leases. That works pretty well for our strategy.
CONSOLIDATION, HYBRID MODELS AND THE MASTER-LEASE OPPORTUNITIES
Vanessa: Is the market going to consolidate as soon as next year? Is it ever going to consolidate?
Alex: I think this consolidation already started in 2019. I think it’s going to continue in 2020 as well. I already mentioned that we bought a few players. Then unfortunately some exited the market like BnBSitter for example. In 2019 we also saw that few players came together take Altido for example.
I think this trend will continue. I still believe there are many opportunities for smaller property managers that are doing a really great job locally. We also see that there might be some more hybrid models where it’s not a full on acquisition but where smaller property managers piggy back on the technology of bigger property managers like GuestReady.
Local property managers that know their markets for many decades but are maybe not the most tech savvy or have the best operational set up can actually also leverage that by joining technology solutions like GuestReady’s for example.
Vanessa: Are multi-family master leases / serviced apartments a threat to you since you’re only in urban destinations?
Alex: I don't think that's a threat. I think that's an opportunity, that's also something that we're looking into. I think in some markets this works pretty well but I think it's a much more risky business. So, each opportunity needs to be evaluated really carefully and if you go in too high with your master-lease agreement, what you pay to the owners, then you might pay for that later. So I think it's something that needs to be thought about carefully. I do believe this model is on a case by case basis and in some markets it works better than in others.
Vanessa: Thanks so much for sharing the Secret Sauce of GuestReady.
Alex: Thanks very much for having me. Vanessa, it's great to see all your initiatives that brings industry together such as this podcast or your VR tech initiative it's just amazing. Thanks very much.