We attended the Short Term Rentalz Summit last week in London that featured industry experts across Europe and highlighted aspects of the short-term rental industry in Europe.
As a reporter covering short-term rentals, I predominantly speak to and cover the industry in America and so I was really looking forward to meeting and interacting with folks across the pond, and I have to say the range of topics covered and voices represented was impressive.
Awaze CEO Henrik Kjellberg kicked off the event with a keynote talk stressing the inherent need we all share to meet, interact and have meaningful social connections with each other and how travel plays an important role in that.
Sally Henry continued on the theme speaking about the state of short-term rentals in data. Most striking number I retained from the presentation was that the Taylor Swift Eras tour contributed $10 million to the short-term rental industry in the US this summer and that Cincinnati, Ohio saw the highest growth in revenue per available rental of 88% annually.
M&A in Short-Term Rentals
During the initial panel session of the day, Nam Quach from DC Advisory, Filip Lolis from Thayer Ventures, Virginia Bassano of Eight Roads, and Oliver Corkhill from Viadi Group delved into the future of investments and mergers and acquisitions in the short-term rental industry.
Nam Quach of DC Advisory stressed the importance of a stable period as a gap still exists between buyer and seller expectations. As people adapt to the new normal in terms of valuations, he remains optimistic that more transactions will occur.
And Phil Lolís of Thayer Ventures acknowledged the challenges associated with investing in a “pure operating platform” at present. He’s exploring the OpCo / PropCo model in search of a potential “Marriott of the short-term rental sector,” especially in the wake of Hyatt’s recent introduction of its vacation rental platform.
Steve Milo of VTrips and NUMA CFO Nick Abrahams in Europe, shared their strategies for supply growth. Milo, highlighted the current emphasis on organic growth by attracting more property owners. This approach is chosen because the costs of equity and debt are presently too high for acquisitions. On the other hand, Abrahams, emphasized the need for operators to act more strategically to effectively monetize their assets.
Julie Brinkman, CEO of revenue management solution Beyond, spoke about the latest trends and understand what travelers are searching for, citing examples like the Taylor Swift concert and the Indy 500 in Indianapolis as events generating high traveler demand.
I moderated the panel on smarter regulation featuring Paolo Lavaggi of the European Commission, Máire Ní Mhurchú from the Irish Self-Catering Federation, and Steve Lowy of the Association of Serviced Apartment Providers. As the European Commission nears the finalization of its proposed short-term rental accommodation regulations in Europe, Ní Mhurchú and Lowy expressed doubts about the effectiveness of current regulations in their respective markets.
We discussed the definitions of what a short-term rental is, the influence of hotel lobbies in forming new legislation and its impact on tourism.
They agreed that regulation alone cannot resolve all housing-related issues, particularly concerning maximum stay limits and registration schemes in certain markets.
Looking ahead, they urged European governments to gather more comprehensive data and increase their understanding of the short-term rental sector’s significance to national economies. Their aim is to address affordable housing challenges without unfairly blaming the tourism industry.
The Great Debate
My favorite aspect of the entire conference was the debate and the motion was Direct bookings are more expensive than booking with OTAs. Opposing the notion was Janel Clark, program director at Hospa, an association for hospitality professionals. Clark’s argument was OTA commissions may be higher, but they’re good at conversions and the user experience, and have an integrated payment system. The cost of acquisition going through OTAs is lower, Clark said, and this acquisition cost includes the cost of the website, the booking engine, social media, paid search, and marketing.
Louis Andrews, director and president of Ovo Network, which manages ski chalets in the French Alps, as well as Carla Chicharro, head of marketing at proper management software Lodgify, were on the direct booking side.
Andrews argued that it’s more expensive to book through OTAs for both guests and owners. The value of the booking direct is also greater. Direct bookings are more prominent in leisure markets than urban markets and Andrews added that it’s scary to be wholly dependent on OTAs especially in urban markets where supply is already restricted.
Chicharro said direct bookings allow hosts to set their own rules. But stressed that in order to succeed without relying on OTAs, it’s important to build a brand through a website with good content booking engine, payment systems.