CEOs of Awaze Group and Evolve on What Consumers Want Now: Full Video

Executives in the short-term rental industry believe their customers possess a unique level of flexibility: Consumers may go low-budget hiking in Albania one week, then stay at a 5-star Italian getaway the next.

Awaze Group CEO Henrik Kjellberg and Evolve Co-founder and CEO Brian Egan spoke in detail about their customers to Skift Short-Term Rental Reporter Srivdya Kalyanaraman at the 2023 Short-Term Rental Summit.

In their discussion, Kjellberg and Egan explored the implications of catering to the ever-increasing demands of both their users and property owners. They emphasized the importance of focusing on specific markets and building a strong presence within those markets, rather than expanding into new geographical regions.

You can watch a full video of their discussion as well as read a transcript of it below.

Srividya Kalyanaraman: So, we have the largest suppliers in Europe and U.S. here. Awaze, we have over 110 properties in the portfolio and 30,000 properties. So it’s very intentional to have both of you here on stage today to basically ask why don’t we have you playing in each other’s markets, or why don’t we have anybody kind of crossing over and merging continents?

Brain Egan: I’m happy to take a swing at it, and then I’ll let Henrik. So I would say, first of all, it’s a difficult business, and when you talk about the domestic market, the U.S. domestic for us, it’s a much less mature market than in Europe. So I think you’re talking about a bit of apples and oranges in terms of the maturity of the relative markets and the types of companies; I mean, you have a brand that’s 75 years old or something within your portfolio, whereas everybody playing at scale in the U.S. has been built roughly in the last ten years. So I think that’s one thing. The other would be, and this is just from my perspective, really interested to hear what Henrik has to say, is for us, the U.S. is the largest greenfield opportunity in the world right now. 

There are nine million vacation properties there are. There’s about two million; two and a half (people debate the number) that are rented out on a short-term basis every year, and the two or three, or four largest players in the whole space, included, have less than a hundred thousand of those properties under management. So, we see this as a very early-stage game right now, and we think there’s a lot of room to grow here. So for us to overcome the barrier of wanting to go cross-border and take on all the operational complexity of that, we’d have to weigh that against further growth and getting more market share in the U.S.

Henrik Kjellberg: Very, very similar for us. I mean, I believe in going deep as opposed to going wide. Somebody mentioned a vanity metric before. It’s easy to get how many countries you have or how many properties you have, but density matters. I mean, it’s better to be in fewer markets and have more properties, and I believe in Europe, we have something like 20 million second homes. That’s 20 million second homes. We have north of 100,000, there’s plenty left to do, and the U.S. market is very different, and again if you go to the U.S. market, you also have to think about you know how you get customer acquisition. You know, this is a very competitive market, as is Europe, so yeah, I think for us right now, we have plenty left to do in the markets where we are, and I’m happy to, you know, stay busy in our lane for now.

Kalyanaraman: So you’re saying that wider is not bigger?

Kjellberg: Yeah, I think it just makes more economic sense when you’re property managing, when you’re doing things. We heard before, like, you know, it’s easier to have a building than two rooms in a building, and the same applies to a market. It’s better for us to have another X amount of properties in a given market where we are because we get, you know, we get more scale benefits from it. That’s not to say, however, that I think, you know, over time, everything in travel has ended up going global, so I think, you know, in the sort of medium to long term, yes, of course, this industry as well is going to become globalized. 

Egan: Yeah, I mean, the industrial logic of it holds up. I think it’s just if you’re achieving what you believe is close to a maximum growth rate within, you know, for us, an ethos of wanting that growth to be very durable over time, you’re not going to go take on all the other challenges that come with (that) and the capital outlays that come with you know going cross-border for the first time.

Kalyanaraman: So, if we try to understand how hard it is to grow supply as more operators emerge and come up in the market, how restrictive does it become to grow quality supply? Or, actually, let’s start with how you define quality supply.

Kjellberg: Well, I think it’s great; I mean, please give me a villa with a pool and a hot tub on an exclusive basis that’s next to the other ones we have so I can just manage. That would be wonderful, of course. When you go after these properties, we try to be selective. We visit all of them, but you’re going to get a mix, and you also need a mix for your guest space. You sort of know not everybody’s going to want to stay in a sort of super high-end property, and as I think, you know, there’s a lot of properties out there, and getting them is not necessarily that hard; it is making sure that you have the availability, that you control the pricing, that the pricing is correct, and that they you know the owners are interested in actually having this as a business. So getting supply, not super hard, getting a great supply that kind of works with you and is the right mix, yeah that’s you know that’s hard, yeah.

Egan: I would say frame it from the guest’s perspective. It’s a property that you feel after your stay compelled to leave a high 5-star review, right, as we all know in our category, that doesn’t mean luxury; that means it was safe, it was clean, it was ready for my arrival, it was as advertised. Then from, you know, from our point of view, standing between the owner and the guest, that asset owner, you know, for us, that’s a partnership. Like most partnerships, I think it’s really important that we’re aligned on the goals, and I think Henrik was, you know, pointing at the same thing. First of all, that has to be an exclusive, and they have to understand what that guest is looking for we have to be very clear and aligned on our relative responsibilities in order to be successful in our partnership. That’s what quality supply looks like for us.

We have an interesting, you know, a different model and, I think, you know, maybe a different viewpoint in the sense that while we want to go deep in the U.S., we’re also very capable of going out on the long tail and operating without geo-density as a constraint, and that’s because we partner for our local services and we think that that’s actually a great model and our guest review scores show it. So that allows us to go everywhere. Now that creates a really interesting opportunity and challenge on how you acquire all that supply and how you partner with all of these owners. You know, we mentioned 30,000 properties. We’ve gotten there by partnering with one owner at a time, brick by brick, and you know that’s why it took a few years to get here, more than a few.

Kalyanaraman: But is there a way to do that faster? So, when we talk about crossing borders, if you think about, you know, the same analogy to cross markets, would acquisitions be one way to do that while also kind of grabbing more of the market share and consolidating?

Egan: Yeah, I mean, I think there are two ways to look at that. For us, our model is very different. I think we have a disruptive take on vacation rental management generally. So for us to go buying smaller property managers and rolling them up is really, again, maybe a round peg in a square hole. It’s, you know, that’s not the value proposition that their underlying owners have come to expect. It’s not the business that they’re running, so we’re going to have to go through; I mean, people know that integrations are the hardest part of doing deals, and for us, that integration is going to be an order of magnitude harder because it’s a different business that we operate. So we’ve never found the return profile on those types of Investments to be that enticing. On the other hand, we also have been able to do this faster and faster. So those 30,000 properties, the first 10,000 took us seven and a half years, the next 10,000 took us three and a half, and the last 10,000 took us one year and one month. 

Kjellberg: So getting properties is also competitive. So we’re on, you know, PPC, social media, bidding, you know, where are the owners? We have local teams, which really helps so good at knowing like these properties are available, and of course, we’ve done over I think, 20 deals as we were owned by the current owners. So it’s a mixture of, you know, when do we think it’s cheaper to kind of acquire organically, or sometimes you know, we will find a great asset in a given location like Croatia where we did three deals last year, and we sort of, you know, completed those deals. Now as you also mentioned, Brian, like you’re buying companies anybody like, it’s like, you know, driving a race car in a straight line, anybody could do that. It’s, you know, integrating is where the magic comes in, and you need to have the expertise in the team, and, you know, platform abilities to do it as well, so otherwise, I mean, for us, the primary model is organic, secondary model is MNA, but it’s also a very important one for us.

Egan: And just to be clear, this isn’t a matter of us being dogmatic. I think it’s really being quite pragmatic and saying here’s how we think that we can allocate capital, and what the return profiles of that allocation look like. I would think about things very differently if I had Henrik’s position in Europe. More mature markets companies to buy, large market share, not as much of that greenfield opportunity, and by the way, having built the muscle of doing those Integrations over time and I’m presuming to have a really effective playbook. Those are all ingredients in that formula that would change the game.

Kalyanaraman: And I think both a reason why you [inaudible] to be picky about, you know, the candidates, all the companies that you evaluate, and you choose, but yeah, if you were to, what would be those opportunities that you would be looking at?

Egan: in terms of an acquisition? Yeah, I guess I would say I think in the U.S., our focus on MNA would likely not be supply driven; it would be more about the platform that we offer. So, I think that might be more technology or data-driven. I think for us, acquisition is more likely to be, you know, if you sort of gave me a, you know, tell you a use case in which we’re going to go buy for supply for the first time in our 10-plus year history, it would be because we went cross-border and we went into a market that was more established where we didn’t think that going from zero to one organic brick by brick was going to be the right move. I mean, that is, you know, it’s a long haul, and given where we are as a company now, we wouldn’t want to wait seven and a half years to get to ten thousand properties. We would be making that move to have a much higher rate of velocity.

Kjellberg: And for us, it would be, I mean, almost the opposite. Which is very supply driven. So we’re looking for a great location could be somewhere in Cornwall, which is a place in the southwest of the U.K., or Croatia, as I mentioned, and where we feel that the company we’re looking at where they have very strong owner relationships. You know, so those things are really important to us when we look at an acquisition.

Kalyanaraman: So, one of those like owned by James and Joes and like a cottage somewhere.

Kjellberg: I mean, I’m relatively. I know this room we have a lot of people from the industry, but I’m sort of five years into this segment of the industry I was in, like the wider travel before, but there’s just so many even in the U.K. which we thought we had mapped like really well, and we still get like what’s this company, and there’s like 300, and they do really well, and the owners are super happy and so there’s a lot of that around it’s a yeah as everybody here knows, but it’s extremely fragmented and a lot of great companies and targets out there still.

Egan: I think it’s really important that the James and the Joe’s thing is a critical element of understanding this category at a really deep level, because even when you see you know XYZ property management and you evaluate that business on its merits and its p l and balance sheet and what have you have to understand that the asset owner is ultimately the James and the Joes right they’re all there all the time and you have to look through to understand what your partnership I believe if you want to have like a real shot at equity value creation in the space as a management platform, you have got to get to that partnership, you have to get to the part where the person paying the mortgage is ultimately your partner in that deal.

Anybody in between you and them means that you actually do not have an exclusive, you don’t have your hands on that supply, and you’re no longer really in the shoes of the supplier. You’ve drifted into being the marketplace, and I think that’s a dangerous game to play because we all know the marketplace is out there, and there’s very few of them, and they’re very big, and they’re very effective.

Kalyanaraman: Yeah, thank you for that answer. I think it also builds into how we think about scale, right? In the industry, so I want to, I want to talk a little bit about the business. Awaze is an institution, and you’ve been around for a while. There is history, and you understand the market. There’s a lot of chatter in every call we talk about how do we balance cash flow and scale. So how do you do that right now in this market? I know Evolve recently had a round of layoffs, and where do you see the market now, and how are you preparing for what you see?

Egan: Yeah, I mean, you know, addressing the layoff directly, that’s, you know, first of all, super hard, and it should be, and a direct result of the largest economic dislocation we’ve gone through in 15 years since the great financial crisis. Not a reflection of the strength of the business at all, but quite simply, we’re going to have fewer bookings, fewer you know, stays, fewer guests, slightly fewer owners than we expected this year, and, unfortunately, sometimes, as a leader, you have to make the decision that is best for all the stakeholders of the company, even if that has a really profound impact on a smaller subset of your team and I take full accountability you know at all times for those decisions and I know that this one was the right one to take for the company.

That said, I think as I think about this market, it’s a super healthy and vibrant market. We are still well above pre-pandemic baselines on bookings and revenue per property. We are still in a market that again has a huge Greenfield opportunity on supply acquisition, and in my mind, you know, as much as a co-founder/CEO, of course, the zero-interest rate world and the valuations that came with it were kind of fun to throw around but, I think this is a much healthier climate. You know, it does not incentivize this economic behavior, and I think everybody now realizes gravity exists, and we have to be, you know, pursuing profitable durable growth; that’s a good thing; that’s what our category should be doing; and if we want to assume what I think is the place at the table we belong in, which is right there next to air, hotel, and car, we’re going to have to do that, and I think the faster we get there’s a category, the better. That’s the journey that you know we’re certainly on and always have been, quite frankly.

Kalyanaraman: And how does that work at Awaze?

Kjellberg: I mean look, I mean so, as you mentioned, we’re private equity owned, and this used to be, although you called us an institution, but we used to be like four or five different institutions because the brands were not aligned. We’re building and putting the brands on a common platform, and then doing that, so for us, it’s the fact that we’re profitable. I mean, we were profitable and have been profitable for decades, but again we’ve been around for, you know, decades. So, I mean, it’s not like I did something incredibly, you know, good there, but it’s a balance of, like, how fast do we want to grow versus what’s the return on, you know, in your profitability. Obviously, when you have the type of ownership we do, I mean that that becomes, you know, that’s a discussion. Do you want to grow a bit faster and have a bit less profit, or do you want to do you want to have a bit more profit and grow slightly slower? So, we’re thinking about that too,. Uh it’s just a very different end of the or different part of the spectrum.

Egan: By the way, there’s nothing new here, right? I mean, businesses have always been worth a discounted current view of their future cash flow. So I think that the trade-off between profitability and growth is like we’re being reminded of it, but this is not a new phenomenon, and I think again one that the faster that we come to grips with that as an industry and not sort of pursue growth just by you know lighting large piles of money on fire the better off we’re all going to be.

Kjellberg: And I agree with you; I think the fact that it’s now everybody’s becoming a bit more rational because given we compete. As I think Jenny mentioned earlier today as you know, we may have this kind of view of what the category is. The consumers may not; they’re thinking about, you know, trip types. So, on the marketing or guest acquisition side, you’re competing. So the more you have rational players there and who are not spending, you know, sending way too much money to Google, apologies to anybody from Google, but I think you know Mountain View is doing just fine already, so to the extent that you have a bit more rationality in in the overall travel category that’s a great thing you know and that kind of makes it more of an even playing field because yeah everybody everybody’s thinking about how am I going to get a return, so you know we’ve had you know in the past few years we’ve had cases at [inaudible] Europe where you see players who are just spending incredibly aggressively, you know, so that becomes you know a bit more of a challenge so that those things are you know you know, rationality is a good thing for us.

Kalyanaraman: Yeah, I’m actually fascinated you said that because you know Awaze, as a brand, is several institutions put together. You have that kind of power, but you still think about it being, you know, conservative and being rational about how you think about scaling, not too much, not too fast, but at the pace that you can still.

Kjellberg: Well, we just want to make sure, I mean, in the end, again, this is going to sound maybe a bit simplistic, but are we delivering a great owner experience, are we delivering a great guest experience, and you know we’re taking care of the owners that we on board. So we have to do that, and I mean, as everybody who’s been in and traveled, it’s an extremely competitive field, right, including then the short-term rental space vacation rental space, and yes, of course, we think about, like you know, level of growth, and you know of course we want to we want to grow as quickly as possible but making sure we deliver that you know services to the owners and to the guests and that you know it’s a great holiday. Otherwise, you know there’s you know they won’t come back so I want this to be a really great experience when you go on holiday with us.

Kalyanaraman: Yeah, and I think it’s pretty relevant to stay on that thought because we have an audience question. They ask, “What are some of the strategies you’ve both used in response to the current conditions.” I think this is relevant. Lower rates, extended stay discounts, loyalty perks, or interior improvements. I’m guessing amenities.

Kjellberg:  Do you want to go?

Egan: Sure. I mean, I would say mostly for us, it’s driven by what we’re doing on rates, cancellation policies, refundability, and then also it, and you know, some of that’s just reacting to market conditions. I mean, if you go back, you know, even pre-pandemic, just to give you all a baseline, it was very normal in our industry to put up to 50% down at the point of booking completely non-refundable without regard to how far in advance you booked. That was true in 2019, right? You think about that now, there’s no way you could be, you know, competitive in the demand market, and I think that’s here to stay forever. That’s also part of mainstreaming as a category and reaching a mainstream consumer, which we all know the pandemic kind of accelerated that process.

So, for us, that’s a constant test-and-learn game, and we are always running, you know, myriad experiments to understand what is going to ultimately do the best for the guests, convert the most, and create, you know the most the best economics for us and our owners. When it comes to, you know, interior improvements and such, that’s really more us advising as a partner to the owner. Here’s what the market’s responding to, you know, if you want to invest in your property, you know for you, maybe a hot tub and improved Wi-Fi are going to do the trick, and that’s what we would advise, but it’s not a capital allocation sort of exercise for us.

Kjellberg: I think Seth mentioned in the beginning in terms of how much inflation has been in the category. Let’s remember we used to be like a cheaper alternative to a hotel. One of the reasons Brian is pushing these room categories is because it’s gone, you know, slightly off the charts, just general pricing levels. I mean, in the U.K., where you basically in 2021, you couldn’t leave. It’s like Hotel California. You were like you were stuck with all the rules of going in and out, and so the prices went up a lot, and the owners got like hooked on the drug, and then they think like my house is worth $5000, well it used to be worth $2000 right, no it’s worth $5000. So yeah, I mean, we have, we work with dynamic pricing. We’re trying to talk to owners about how they can, you know, make more revenue, but in fairness, some of our properties are, you know, the price points are too high, and so we’re making a real effort to kind of get them down. Doing discounts obviously works on the things like more flexible cancellations and other things as well.

But yeah, I think what the owners or what some owners have forgotten is that this is not a discrete category for the guest. They will compare a hotel they will compare in Europe with a flight-inclusive tour “How cheap is it to go to Mallorca with the Tui,” or, you know, versus going to Cornwall and you know, not saying Cornwall is bad, but the Majorca is whether in Mallorca is slightly more predictable. If you’re tired of the rain. So I think, you know, in general, I think that ,you know, at least what we’re seeing is and what we’re working with the owners on is try to kind of convince them, and of course, it’s hard for them because the cost of cleaning is up you know and all these other things and electricity and gas bills, but yeah I think that’s been a, you can see Airbnb doing it I think one of the reasons Brian is I mean I’m not I don’t you know I’m not Airbnb, but one of the reasons he’s pushing rooms is it’s a way to get the price point out and kind of reminding people that look we used to be, not saying that you know it’s a worse thing than a hotel, but it’s a different experience, and one of the things that the category had going for it was the value prop yeah which was you know this is you know you know you don’t get all the same service, but you also pay a bit less.

Kalyanaraman: So do you, do you think that the consumer for a hotel is distinctly still different?

Kjellberg:  I think it’s exactly the same. I think I believe exactly like in trip type. I think this is one of the things that people who are not from travel misunderstand travel. They go like, oh, if you buy a Gucci bag, you’re a Gucci customer or whatever. Like in travel, it’s like, look, I went hiking in Albania last weekend, okay? We stayed in very simple guest houses right loved it and then I’m going to Venice for, you know, an anniversary in October, and I’m saying it like a very nice hotel with my wife. Brilliant. Like, but you don’t get that kind of differentiation in many other categories. If you like Audis, you’re unlikely to kind of go for a Lada, right you’re sort of [inaudible], or maybe or Audi or a Mercedes person, but in travel, you really have that kind of breadth of because the trips you we go for all of us in this room can be very varied.

Egan: We see it on our own platform where repeat business, you know, one minute is going to look like a drive from Denver where we’re headquartered where I live. You might be driving up to, you know, Summit County Breckenridge for the weekend, and you just need a place close enough pretty simple there and back trip for the weekend to get some good snow. You’re going to look completely different if you’re going to Hawaii and you’re meeting up with your two siblings and all of their kids, and maybe somebody’s bringing a nanny, and one of the sets of parents is coming in, and it’s this big family trip, and suddenly it looks like this big luxury expander they’re in an eight-bedroom Villa, and it’s just this incredible thing and back and forth again, and what’s happening just within what we do and the same thing can be said you know writ large in the whole travel category for sure.

Kjellberg: And that’s one of the reasons, I think. I mean, people are working, and obviously, programs are Bonvoy or Expedia is doing it, but like that’s why loyalty is it’s a tricky thing because it’s a very different purchase depending on the trip you take.

Kalyanaraman: Yeah, especially when it comes to short-term rentals. I think when the branding, I think they spoke about that, and I think that also continues to pose a challenge. If you have established brands, it’s easier to have loyalty programs no is. That has that been your experience

Kjellberg: But I think you know you see it, it’s interesting here in the [inaudible] perspective from Francis because it’s sort of one whereas the hotels have clearly differentiated into many, because the experience is so different depending on what you do and um you know so maybe the soft brand concept kind of works and people kind of understand what it is. But yeah, I think it’s, you know, we have a very wide range of properties, and I think that’s one of the challenges as an operator. How to do you kind of establish? I mean, I know what a Courtyard by Marriott is going to look like, but I’m meeting with Jenny afterward. It’s going to be really bad, but you sort of know what that looks like, and for our properties you know we have a very wide range of light let’s call them three stars we actually even have two stars and some sort of parts of Western Denmark and then to go up to like a full kind of almost six stars in Majorca, and it’s under the same brand so that’s hard maybe to explain from a brand perspective.

Egan: On the other hand, though, it’s actually going back to what we just said. A given consumer is going to flex up and down that value chain over time and so I think that as we think about repeat and referral business it’s actually a huge advantage to have 30,000 properties and in our case in 750/800 defined geo markets across the U.S., because the odds of us having the property that you want for that next trip have now skyrocketed and so you’re only so loyal to any one segment of that value chain because you’re only going to go, I mean by the way this is also short-term rental it’s not something you’re doing three times a week, right. It’s not something that you’re doing this is maybe two or three times a year for, you know, a pretty active traveler, and you’re probably not in the same segment of the value chain throughout that time. So, I think it long term, it really plays to our advantage, but we’re in the very early innings of that. I think as a category, supplier brands in the U.S. are still, you know, relatively nascent in the journey of sort of getting to, you know, unaided awareness and that sort of thing.

Kalyanaraman: Thank you. Thank you for that answer. I want to sort of pivot the conversation and talk about distribution and demand. Our favorite topic, and Henrik, I want to draw from your experience at Expedia, so how much do you think you know about great supply having these beautiful properties, how well or does that translate to direct demand, or is that enough to kind of reduce the dependency on state platforms or?

Kjellberg: I mean, I think it’s a subset of part of our properties, given that they’re exclusive. Definitely, you know we control them, so we channel manage, and we sort of open and close the categories just like a hotel chain would. Because I know that these houses and you know well I don’t need any help in August for very particular properties. But equally, we have very good relationships with third parties. We just came from a position where we had, I mean, I think we do 72% of our demand is direct. So, 28% is third parties. I don’t necessarily, you know, I don’t want to kind of. I’d like to have all of it direct, and I’d like to have everybody typing in the name and not going via Google. Direct can be more expensive than the third party. That’s another misunderstanding. okay, right, because if you do PPC on branded, if you, well if you go on a bid for that, um, that’s always social, but that can be very expensive. So, of course, like everybody in this room, I wanted people just to come back to me all the time and never leave the confines. That’s not reality. So, of course, we work on so look, we appreciate the partnerships we have, we have many good ones, but we’re always looking at the balance of what’s the customer acquisition cost and the negative with the third parties, of course, I don’t get the data right. So, I can’t really market to them.

It’s an obvious thing, but you know, I want that email so that I can market back to people and kind of incentivize them to come back to me, hopefully through what we call organic repeat, which is either through email or direct type-in next year. If they come back by Google on branded, again, I’m paying, I’m paying money for it. So, we try to build the website and the experience such that people come back and, you know, go back to us directly, which is what I think any rational operator and including Marriott, including you know, all the other brands, is trying to do as well, so we’re all competing for that. 

Kalyanaraman: Yeah, that’s the dream.

Egan: Well, if I go back to the beginning of your question, I’d say, aligned with Henrik here, it starts with great supply. I mean, it starts with quality supplies. I define that right a five-star

experience and those brand standards and being able to do that repeatedly at scale. It’s interesting how so much of the travel business is doing the basics repeatedly at scale as you grow at higher and higher rates, or you know, grow at higher and higher aggregate amounts off of, you know, off of large numbers. I think that’s got to be the sort of table stakes of it. And then, as I think about how that helps us drive direct, it’s what I was just mentioning it’s having a footprint of 30,000 properties gives us a much more interesting value proposition to say to you as a guest. Why don’t you come back and book with Evolve again you can book that same home for the same dates if that’s what you want to do, but you could book a home that has nothing to do with that. You can go from the relatively, uh you know, kind of average ski condo in Breckenridge to the villa in Hawaii and back again, and you can do it on one platform where you know that there is a consistency of those brand standards, of the fact that you’re going to want to leave that five-star review afterward that these are vetted and verified properties.

I think for us, the big belief is it’s about consistency in the inventory; it’s not about conformity. It doesn’t have to be the case that they are all looking the same and have the same amenities and all of the rest. I think that’s the hotel game, you know, four formats, and that’s what a Courtyard by Marriott by the way, so Jenny won’t be mad at you. Uh yeah, I blame jet lag. That’s what that’s what they do well. I think what we do well is embrace the fact that it’s not commoditized that every home is equals one unique that’s what yeah that’s what guests love about it is that it feels like a home. That’s what’s wonderful as a human about going over and having dinner with friends or meeting new people and going into their homes and seeing that experience, it’s a completely different level of connection, and I think we ought to have to embrace all of that and create enough consistency around it that you know it’s going to be safe and clean and ready for your arrival, and as advertised.

Kjellberg: I think that the one thing I would say on this again is if you think that just having the supply is enough and that’s going to set you, those are all the graveyard of travel industry P.K. companies who didn’t make it. The ones who just thought, I’m just going to curate their supply, I’m just going to be focusing on this and not. So supply yes, it starts with supply, but you really have to pay attention to like how you build your demand channels, and how you kind of think about that over time and look at your customer acquisition costs, because there’s so many you know for those of you I mean I’m all in this industry now, but like there’s a lot of companies that thought like wow this is so unique, but again remember the guests will shop around. The guests will shop around.

Egan: and by the way, for every supplier in any category I can think of, direct is always going to be, you know, the best economics, right? But let’s don’t forget that the economics of having empty nights are terrible; the economics of having owner churn because you’re not performing are terrible. So, I think these partnerships do have a lot of value, and I don’t think it has to be viewed as some sort of completely zero-sum us versus them game. I mean, I think those are very aligned partnerships as well. They play an important role in our growth, and yes, like everyone else, we love to book direct as well. 

Kjellberg: And you see it with like a different category, but like, the OTAs and the hotel chains are both still around. You know, they’re both like, you know, they’re, you know, like turns out Marriott and Booking.com have done they’re both still around. They’re both, you know, great companies, and then,, of course,, they try to own ,you know, try to fight to get you know and slightly different value props but yeah we’re 20 years in after the OTAs or maybe 25 years then after the OTAs started and yeah that you know they’re kind of I hate the word competition, but like you know they’re sort of they both coexist at least.

Kalyanaraman: Thank you, thank you so much for the fascinating conversation. That’s all we have time for, and yeah, thank you.