VRWS Leadership Interview of the Day
In approaching the 10th edition of the Vacation Rental World Summit, we’re releasing a series of interviews to leaders, key players and highly motivated people in our industry whose companies make a deep impact in our space and will be present at VRWS.
The aim is to get you some insight into these leaders and the company they founded, manage or work for, as well as getting some behind the scenes on their thinking, their motivation and their drive.
Describe your career in the vacation rental industry and how you reached your current position in the company.
If I’m honest with myself, I fell into the vacation rental industry, but I’ve never looked back.
I’d been working on another start up, but it wasn’t going so well, so I was renting out an Airbnb to help cover the bills. This was right around the time Airbnb was taking off and I realized a) there was something there and b) I wanted to be part of it. Because of that, I joined Beyond Stays, which was a property management service in San Francisco. But after a few months we realized we could help property managers with some of the daily challenges we were seeing, and make a greater impact. So we pivoted and launched Beyond Pricing.
I’ve been both the CEO and CTO at Beyond, but there isn’t much difference in the beginning – as a founder you roll up your sleeves and do anything and everything needed to get your idea off the ground. In the early years it was all around what are you building, who you’re building it for, and most importantly does it work. Because we most importantly needed something that worked to prove that we didn’t just have a cool idea, we had a serious business concept that was going to change the vacation rental industry.
Once we got validation that dynamic pricing was going to work in the vacation rental industry, then my role became about fundraising. However, from the beginning I knew we didn’t want to be a stereotypical Valley start-up that just burned cash. So we decided to focus on one core go-to-market motion that would help us build revenue faster, which meant focusing heavily on property managers. On the tech side this meant leading our team to focus on integrations and partnerships ensuring we could build out a system that would fit into what property managers were already using in their tech stack. That got us to 2019 which was the big fundraise for us and it became an inflection point for the company – then my focus shifted to looking at how we achieved operational excellence and how we could use our VC money to smartly scale.
The latest phase of my career began when COVID hit and all of a sudden it was completely changing how the entire industry thought about revenue because existing methodologies and pricing methods became clearly flawed. I think we’re still operating in this phase for the industry – we’re all still trying to find a new ‘normal’ and the more I think about it, I’m not sure stability is in our future, I think the industry norm will be more around reacting to market, economic and industry shifts.
In your opinion, what are the main current challenges in the vacation rental industry, and how do you think your company can help overcome them?
One of the largest challenges we’re still facing is that there isn’t a normal state for the industry anymore, and that has fundamentally changed how PMs need to think about revenue management. I spoke with someone the other day who was trying to comp prices against 2019 as a normal, but that’s now four years in the past, and I truly believe historical data and methodologies will no longer work. I’ve believed this for a while, but COVID really threw into light that historical bookings weren’t a perfect indicator for demand. What the industry really needed was real-time demand data to ensure they were considering what people want now, today, and using that to adjust their revenue management strategies.
At Beyond we launched Search-Powered Pricing and Search Data Visualization earlier this year and we’re already seeing our customers increase their revenue by 3 to 5% in less than a month, simply because we’re automatically increasing or decreasing pricing for their listings based on demand. One customer actually made an additional $41k in under 20 days, and others are seeing huge surges in demand through their direct booking sites because they’ve been able to use consumer search data to adjust their distribution strategies or length of stay requirements in order to capture more bookings.
Speaking of distribution, we’re seeing channel dominance as another real challenge to this industry. Airbnb is becoming more and more dominant. The big 3 (Airbnb, Booking, Vrbo) have squeezed out almost all the long tail channels. Airbnb is a great acquisition channel, but it’s one that has real costs, both in brand and in commissions. We’ve seen supply growth outpace demand growth, and that emphasizes the need to be making the most out of every booking. Having a strong direct booking strategy and a high-conversion website is going to be essential. It allows for a better end-to-end guest experience which can create a stronger funnel of repeat guests and more predictable revenue. We’ve actually launched both a direct booking website & booking engine, as well as a frictionless payment processor specifically for the vacation rental industry because we believe direct bookings are key to success in the future of this industry. Right now the US is leading in direct bookings, while in EMEA the broad acceptance of credit card payments has created a lag, but I anticipate that this challenge of distribution and pain over paying such a large percentage to OTAs will begin to shift EMEA towards more acceptance of direct bookings.
The final challenge I see in our industry is that the volatile market in the US is creating a huge pressure on property managers. Owner expectations are sky-high from the past three years where they could see guaranteed growth every year. Now PMs are having to justify the economic pressure to unrealistic owners who are misaligned with the current market reality, and then do a lot of busy work to retain owners, when instead they should be focusing on how to strategically increase revenue or maximize profitability. We’re helping our US customers utilize Market Insights to showcase to owners that while they might not be seeing huge revenue increases this year, they’re still beating the market, which can help with owner retention.
This last one is admittedly a larger problem in the US this year, but when we look at travel trends, I would anticipate the European PM market will see this pressure next year as well, when the influx of travelers from the US settles down and there aren’t 20% year-over-year revenue increases.
What are your expectations for the 2023 edition of VRWS in Barcelona, and what makes you particularly interested in attending this specific edition?
As an international business, it’s always amazing to attend events like VRWS where we can speak with clients across the industry, see patterns and trends at a global level, and learn from our peers.
I’m also really excited about it happening in Barcelona this year, because Europe is our fastest growing market and our EMEA headquarters is located in Barcelona. We’ve been hyper focused as an organization to expand our partner network, integrate with the right PMSs, and internationalize our solutions & support across multiple languages. We invested in expanding to EMEA in 2019 because we knew it was where the next phase of growth would be in the vacation rental industry. And for that growth to continue we all need these kinds of world class conferences to bring together the right minds, so we can tackle the kinds of problems I talked about earlier.
Could you provide a brief preview of what attendees can expect from your participation during the Vacation Rental World Summit?
From day one we’ve built our business on caring about hosts and PMs, understanding their challenges, and building solutions that help them turn those challenges into strengths. Everything we’ll be showing and talking about at the show is focused around how we can help make their businesses better.
That’s why we’re hyper focused on where the future is going for revenue management – we believe it’s all around broad based access to real-time search data, unveiling data trends to help improve owner communications, and maximizing profits by owning more of your guest journey with direct bookings. At the end of the day, we want to ensure PMs and hosts alike have the right data to confidently adjust their revenue management strategies as needed, and the right tools to execute that strategy.
You’ll have the opportunity to meet David directly at VRWS in Barcelona
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