$250 Million Short-Term Rental Deal Signals a Shift in Travel Profits

On Monday’s Good Morning Hospitality, A Skift Podcast, Wil Slickers, Michael Goldin, Brandreth Canaley, and Jamie Lane break down a $250 million deal as TowneBank sells its vacation rental management business, signaling continued investor appetite for scaled STR operations even as the market evolves.

The team also unpacks mixed demand signals, from softer-than-expected travel spending despite rising tax refunds to growing friction around international travel to the U.S., while also exploring why OTAs still struggle to gain meaningful traction in experiences. The episode ties it all together with a look at where value is actually shifting across travel today.

This episode is presented by ⁠⁠Cloudbeds⁠⁠ & ⁠⁠Bilt⁠⁠.

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Happy Monday.

Well, what’s going on, Jamie? Just you and me again at it today. So for those loyal Brandy followers, no epic Brandy Rants today.

She is embracing her better millennial in traveling.

Good for her, good for her. So it was a big sports weekend being here in the South. So you watch any Masters this weekend?

I got about 10, 15 minutes in until my son said, this is boring, change it.

We got over to baseball and about 10 minutes into that same thing. So got a little bit.

Yeah.

How about you?

Watched none of it.

Nice.

Did watch Perry Roubaix though yesterday, the big cycling race, which is called the Hell of the North. It was very exciting with Walt Van Aert taking the win over Pogatar, which was huge. Okay.

Probably zero listeners know what those names are, but it was a big cycling day.

All right. Well, we’ve got some big news in Auburn. It came out last week that Nessie will be coming and playing at our football stadium, Jordan Hare, this summer as a tune up against Iceland.

So Jamie, track the data. I’m curious. Summer is usually pretty dead around Auburn, a big college town.

But see if there’s any spikes in June.

Well, we’ll take a look. Yeah. The messy effect coming to Auburn.

Are you going to rent out your home?

No, not anymore. It was a lot easier pre-kids, but now post-kids, very difficult. Since then, there’s been about 10 hotels built.

So I’m not even sure I’d get the rate that I wanted or that I got back then. But oh well. You win some, you lose some.

It happens.

We’re still figuring out if we can run our, because we’re going to be gone all of July, if we can get our act together and get the house ready to be able to run out during the World Cup.

It’s going to be an epic amount of work, but it might be worth it. We’ll see.

Yeah. Well, head up to the mountains. It’s 10, 15 degrees cooler.

Totally worth it. Totally worth it.

3:31

PE Rental Acquisitions

Well, I know we’ve got an interesting fun topic today. There’s a bunch of little big sleeper companies out there. But one we’ve heard of called Alpine.

You might be familiar with them. Made some news last week. You want to dive into that?

Yeah.

We saw a new portfolio acquisition announced. So Belcrest Vacations has acquired TowneVacations. So TowneBank has sold their roll up of a few different brands to Belcrest.

Belcrest is a newly formed vacation rental company, sort of a PE roll up. So that’s exciting to see. And I think we see it sort of aligning with quite a few different ones.

So I think we also heard last week, ViewStay Vacations launched as a new Cosigo brand. And that one sort of rolling out of a large number of Vecasa markets. So I think there’s like 3,500 listings there.

We heard a few weeks ago, Avari launched and similarly out of the Vecasa, getting a few of the Vecasa markets from Thrive Capital.

So, and I was writing these down like of all the sort of PE backed vacation rental companies now that, and run through them.

We’ve got ViewStay, we’ve got State Terra with Brandy, we’ve got Avari, we’ve got Away Day, we’ve got Bellcrest, we’ve got quite a few, Monarch. Man, it’s getting crowded out there.

Lots of PE groups.

It went from a mom and pop business 10 years ago to now, I mean, I personally haven’t been to Verma in a number of years, but I’d imagine it’s gonna change a little bit over the next couple of years, be a little more, let’s see, buttoned up and

finance oriented. But we’ll see.

I mean, I think the strategy that we had seen several times previously, which kind of culminated with Vecasa’s roll up under one national brand, I think everyone is realizing, let’s just buy good profitable businesses, let them operate on their own,

maybe pull a couple small pieces into corporate to get better unit economics. But trying to rebrand and trying to take the local market out of what is a small market, local market business hasn’t worked historically. So let’s try something else.

A good traditional vacation rental management company, like the ones that are part of this TowneBank transition or sale. What was it? Six different companies with 25, 2600 properties.

Those are going to be probably very profitable businesses. And they have to be if it was what was it? A $250 million deal.

Is that right? 250 million. So that’s pretty crazy.

But you look at what PE does best and where they’ve actually successfully grown companies.

It is doing local HVAC, roofing companies, garage doors. It is service companies. They keep the local brands.

They acquire scale. They build it on top of a platform with strong leaders and able to grow and do it efficiently and profitably. And I think ultimately, this sort of, what do you call it, discipline applied to the business could really help.

Knowing that it, and when a PE company’s sort of looking to grow, and they’re buying already profitable companies, that they are going to make sure that it’s continued to be done profitably and grows in a organic way, or maybe doing more

Yeah, and it’s really just a multiple arbitrage.

You buy up companies at three, four, five X that are doing half a million dollars in revenue, and the more you pile in, and now you’re getting seven, eight, nine X in multiples, and I think the cost at one point was able to buy a company at four X,

and to their valuation was getting, what, 10 or 12 X of multiples. That’s the strategy here.

It seems to be catching fire in the PE circles, as there seems to be a new one popping up that we haven’t heard of, and coming out with thousands of properties. Is this a good trend?

I know it’s probably the wrong person to ask since your paycheck comes from Alpine as well. But I’ll ask it again anyway. Is this a good trend for the industry?

I’ll let you answer first.

What do you think?

Yeah, I’ll say why not. I think as long as the businesses are kept locally, and the traditional rip everybody out of the business and replace them, it’s really, really hard to do with strong local brands, especially service brands.

And so I don’t think the, you know, grow revenue, cut headcount is going to play too, too strong. There’s probably some positions that get centralized, but not a huge amount.

And ultimately, people that have been in this business for 10, 20 years need liquidity. And so I think from that standpoint, it’s good.

And those that get liquidity might then go start a software company or start another business within the industry, or become investors for the next wave of management companies or hoteliers, whatever it may be.

So yeah, I’ll say this is probably a pretty good trend for the space. I’m just glad that it’s not one. I’m glad it’s not one company doing it all.

I’m pleased to see three, four, five, six different companies coming out that we’ve never even heard of and controlling thousands of units.

Yeah. So I’ll agree with you, but I’ll sort of take my angle of you’re a founder, or you founded multiple companies, right? There is, and you found companies and hoping eventually for some sort of exit, right?

In looking at how these exits have played out for a lot of founders of vacation rental management companies, like there’s different types of capital that’s going to be right for different types of companies.

And I think we’ve seen that VC capital and vacation rental management companies just isn’t probably the right mix. But I think we’ve seen that PE capital could be the right mix. And we’ve seen debt also work well.

But yeah, I think that there seems to be a right mix. And to your point, like competition is good.

And it’s going to get higher valuations for strong companies that are looking to sell because there’s going to be multiple bidders looking to acquire those companies.

Yeah, absolutely. And I think the era of VCs backing short-term rental operators is over. And it might be another decade before we see that happen again because some trend will pop up.

But right now, the focus is on purely EBITDA and you’re getting a multiple on said EBITDA. So this is something that our group chat brings up quite regularly, especially now Alpine’s in it, Brandy’s in it.

We will certainly cover this trend as much as, well, I can’t promise as much as AI. But it’ll probably be a trend as common and frequent as we talk about AI on the show.

Yeah. I don’t even think we have an AI topic today. But on that, and maybe we’ll do a quick shout out to Vrbo, our sponsor for April.

This is the month where if you list a eligible property with Vrbo using the link in the show notes, vrbo.com/goodmorning, you can earn one key cash on your next trip.

13:24

US Travel Signals

So looking at that next story, we have seen demand signals are mixed heading into, I’ll go with the one on the screen. What are countries telling travelers about visiting the US right now?

So this is a story and it actually leads into my stat of the day or set of the week of 0.9%. So I’ll give you a chance to think about it where I tee up what the story is.

So essentially this is an article by our friend at Skift, Bailey Schultz on what are a lot of the changing guidance sort of coming into the US for different countries.

So the article goes through and what the German government is telling German travelers to be worried about. It goes through in the Netherlands, it goes through the types of worries, whether it’s ice protests, terrorism threats.

And Canada note that firearm arm possession in the US is high as a warning to travelers, the government shutdown, trade tensions. So a lot to be worried about. So now given all that 0.9 percent, what do you think that is?

The amount of international tourists that get into an armed conflict in America.

I suspect that’s even lower.

I expect that too.

But that’s what countries are telling their citizens to be aware of.

So 0.9% is the growth in non-citizen air passenger arrivals to the US from foreign countries in March 2026.

So we have a growth month.

We had a growth month. Hello. Hey, yeah.

It’s still 88% of pre-pandemic levels. So we’re seeing a growth. We’re still well below 2019 levels.

Then it was actually a weird month because we also saw the traffic for Americans going overseas, or outside of the country actually drop by 2.1%. And the big impact there was Americans traveling to Mexico dropped by almost 11% year over year.

So think back, what was going on in March, that was like when we saw the cartel violence playing out.

So no surprise there, but I think the good thing is even with all this worry about additional restrictions and worries from international travelers or potential worries, we saw international air travel to and from Europe totaled 5.4 million

passengers in March and that was up 3.5% year over year. So and this is something I’m watching very closely in the lead up to the World Cup.

Like is the trend going to be positive and then the World Cup is able to accelerate it or are we seeing a big tailwind of consumers, of travelers, international guests really worried about coming to the US.

And this, I’m given March is more of a clean month. There is some Easter shift there potentially impacting some of the March numbers, but the fact that it’s that positive has me and feeling a little good coming into summer travel.

Yeah, I mean, we had what, eight months in a row of negative growth on that front.

So the fact that we have positive growth ahead of what should be a big international summer, there’s positive signs and there’s also positive signs with tax refunds, but some mixed signals there with them not coming in quite as strong as we had

expected. We all know that the tax cuts have led to a lot more refund for American citizens.

I think it’s what, 13 percent right now, tracking 13 percent higher year over year, which is huge, but it’s coming in shy of where the banks expected it to be, which was in the 20s.

So a lot of times, travelers or Americans will get refunds and put that money towards travel, which is obviously a big wind in the sales for the industry. But it’s not coming in quite as hefty as we were hoping. Good, bad, ugly?

What do you think?

So when we did our outlook starting the year, this was a big tailwind for the US travel industry. US. Travel Association was putting out and put out press release that they expected $51 billion in additional domestic leisure travel spending.

And a big part of that was the additional $57 billion in additional tax refunds that were going to be coming out to people because of the big beautiful bill. So you remember back, so no tax on tips, no tax on your Social Security payments.

A lot of those, yeah, those tax changes actually came to be with a refund that you’re gonna get back for taxes that you already paid in 2025, and now get back as you file. And your friendly reminder, April 15th is coming up on Wednesday.

If you haven’t filed yet, better get on it and get that refund that we’re talking about, because most Americans did get a refund. And what they’re calling out here is that the refunds haven’t been as high as expected.

Most of those, and what they called out was a lot of the benefits seem to be going more to mid and high income earners that were already gonna be paying, they just had to pay a bit less. So it wasn’t actually showing up in terms of refunds.

And so that is a little disappointing. And then you sort of combine that with the higher gas prices that we see, which are now an additional tax on consumers.

Yeah, that 2026 may not be the growth year that we expected for travel going in, because there were so many tailwinds that are now not really playing out as strongly as we would have hoped for.

Better than last year, but not as big as we were expecting or wanting it to be.

Yep.

Yeah, the year is still long. We’ve got a long way to go. And as many twists and turns as we’ve been through over the past, I don’t know, since COVID, it feels like you never know, right?

Just hold on for dear life. Let’s see where this ship takes us. In other news, quick shout out to Michael Ross.

Sleep IO was acquired by Stay Next group for $15 million. So congrats, buddy. One of the original GMH hosts.

Congrats.

That tax bill is coming soon.

So our final topic of the day, and this is one we haven’t talked a whole lot about recently.

21:43

Experiences Market Challenges

I think it’s mostly because there hasn’t been a lot of news or anything new to really talk about, but I think it’s good that FocusWire called it out.

And it was because of a new report that they published on the outlook for travel experiences from 2019 through 2029.

And that, and one of the things that highlights is just that OTA distribution for experiences is still massively under sort of share from other types of travel, whether it be in airfares, in lodging, things like that.

And that the vast majority of experiences, it’s still happening offline.

67% is the share offline and only 8% on the OTAs. And so I guess, I mean, I think this is what opportunity Brian Chesky sees as a huge green space for them.

But experiences are, we talk about local businesses and private equity rollups and short term rentals. These are micro local businesses, like typically one person, maybe even in their free time, filling in some additional experiences.

And then the flip side of that, you’ve got, the article discusses Atlanta specifically, which you and I know quite well. And the biggest attractions there are Fern Bank and the zoo and the aquarium. And no one goes on the OTAs to book those.

In fact, there’s only a couple of the major attractions that are even bookable on the OTAs. So there were 75 museums and galleries in Atlanta, but only three are available to be booked on the OTAs.

So you just kind of travel to these markets if you’re traveling and you see what the area has and you book it. Typically direct.

And if you’re from there, you’re definitely not using an OTA because if you want to go to the aquarium, you’re just going to go to the aquarium and get your own tickets. So I see why it’s such a small share.

And winning that over, I think, is a huge uphill battle. The hard tickets to get, the Vatican tours or the Colosseum, the notoriously the Louvre, those are ones you should get, right?

And whether it’s direct or on an OTA, I just don’t, I would never think to go to an OTA to book an experience, to book a house, to book a flight, a hotel, 100% an experience, not me.

Yep.

And I think that’s what Airbnb is seeing is that the one of the kind of experiences that they can, that they’re scarcity around, that they can maybe create some demand around booking on the OTAs, but these sort of experiences that are more geared

towards locals, and is there a market there? And I don’t think anyone has cracked it yet.

And even the biggest, buy a tour, get my guide, and they are really focused on those type of experience that international travelers from outside that city, things that they’d want to do.

And there are a few things like that in Atlanta, in tours, walking tours, things like that. But it’s not the big money ticket items that are really attractive for locals.

They have millions of folks flowing through every year. Yeah. I could just think of four or five off the top of my head that probably have a million plus going through.

And there’s only three that are bookable in Atlanta. So the percent share that’s even available to book is so small. And then how many people actually transact on them.

And maybe to work in AI, maybe trip planning helps with that and gains a bit more of market share for the OTAs on the experience side. But it’s just a big shift in consumer behavior, which is always hard and takes a long time.

But it’s not that it’s not doable. Like, and what I loved at the article called out was, like, there was a time that I was booking my zoo trip through Groupon because they were, like, sending out great deals via email.

And, like, we all sort of got excited about that. And that was, what was that? That was an OTA, essentially, that was creating bookable experiences online.

And they did it through deals, sort of.

Dynamic pricing, basically, right?

The right people that’s going to drive them to do and take that sort of activity.

And maybe it ultimately, and the economics of it didn’t work out and where it was economical for all these local groups to give 50% off and then pay probably, what, 25% of that of Groupon like, and is it really worth us taking a 75% haircut to get

more people in that? Yeah, changes the broader experience for those that are using it regularly, but it did prove that it was possible at the right price.

Yeah. And those subsidized, it’s just like Uber back in the day, the subsidized trips that were $5 rides from the airport and from LaGuardia down to Manhattan. That was the heyday of spending venture capital money.

And I remember the Groupon stuff was the same way. But to have it be a sustainable long-term business, the economics are tough. Everybody’s competing for eyeballs and for pocket share.

And it’s, I don’t know. I’m not wildly bullish on experiences on the OTAs, and the numbers certainly have backed that up. But if you’re a compelling founder, there’s plenty of green space to pitch your idea on.

So I understand why a lot of folks are going after it.

28:40

World Cup and Travel Plans

With the World Cup coming up, I know RIT responsibly has basically a little educational series coming up about it. What are you seeing on the World Cup numbers so far?

Yeah, and supply is still, I think, underwhelming. Quite a few markets, though, that are seeing strong supply.

We’ve seen continued acceleration growth in Kansas City, and overall demand for stays around the World Cup has been doing incredible, and we’re still seeing pacing up in most cities, and essentially doubling what we were at the same time last year.

Most demand gets booked within the last two months. Sitting here at April 13th, things really start to kick off for the World Cup around June 13th.

We’re in that last two months of activity, so this is going to be prime time for bookings coming in, for new listings getting added. It’s going to be really interesting to see how these next eight weeks play out.

Yeah. Well, it’s promising we’re already 2x above last year, so pacing is improved despite everyone’s still the last-minute nature of people booking these days.

Plus, you only know where your first couple of games are, the rest, it’s just going to book as you feel like your team is going to advance or not.

So, and then hopefully, and I would imagine a lot of people that have flown all the way over here, then trickle into some of the other major tourist markets that might not.

I know Australians, when they come, love to buy cheap cars and drive on coast to coast. So, I imagine we’re going to see some road trippers and some more accents coming around local markets near you.

Awesome. So Michael, what are you going on this week? Anything fun?

Let’s see.

I’ll be at Virginia Beach with some friends, all of our families. It’s going to be a packed house for four families each with two kids. So, 16 people, all the kids under six and under.

So, it’s going to be loud, wish me luck. And then, following that, going off to the short stay show summit in London, and then following that, VR Nation in Denver. So, I got a lot of trips this month.

Very abnormal for your boy. But here we are, getting on some planes, shaking hands.

Hopefully, we’ve got all the TSA issues figured out, and no three-hour lines for you, and you’ll be able to look for some easy travel.

Yeah. What about you?

I got nothing. We’re going to the mountain house this weekend, and sort of check on the house, hang out, relax. I don’t have any travel coming up until I’m going up to the Michigan short-term rental conference at the first week of May.

All right.

The big gift for the Michigan short-term rental conference, Jamie Lane.

Yeah. They asked like eight months in advance. So it was hard to say no.

Smart.

All right. Well, good deal. Next week, Brandy should be back and we can talk more private equity with her.

Sounds good.

You two duke it out.

All right, everyone.

Have a good week.