Back in STR. Going Deeper, Not Wider. Ashley Horsley on Avari.

0:18Hello, we are here with Ashley, COO and President of Avari. How is guest Uval going for you so far? Oh, it's been so fun. They do it big. They do it very big. Is this your first one? It's my first one. Yeah, it's always really fun. It's always my favorite conference and it's always in a fun location. I'm like, I guess I have to go to Madrid. So I'm glad you're having a good time. It kind of puts the other conferences in the industry into perspective.

0:43Ashley Horsley: Puts them on notice. Puts them on notice. Exactly. So I heard you took a little bit of a break from the industry. I did. Five years. Yeah. And now you've jumped back in. Can you tell us a little bit about what brought you back into the industry? Sure, sure. So I worked in sports for about five years after leaving the industry and then got a call from my friend Jacoby Olin one day. And he said, hey, I have an opportunity for you if you're interested. And I said, no, I'm not interested. I love working in sports. No, actually, I'm a smart guy. And he said, no, I have this opportunity. These two guys, you're going to love them.

1:19Just hear them out. And so I got on the call with them and I think I committed like an hour and a half later. They were great. The entire concept I loved. I did always think that it was going to take a lot in order for me to come back to the industry. It did take a lot. These guys are incredible. And the opportunity to get back into the space and do something so different and challenging was very appealing to me.

1:45Ashley Horsley: Yeah, and you guys are one of the private equity groups that has bought a lot of the legacy Vacasa Casago markets, right? Right, right. And how many in total is that and what geographies are you guys in? Sure, so 27 unique markets and they all were purchased from Vacasa Casago. And so it's just a massive carve out and primarily five or six different locations, Florida Panhandle, Alabama Panhandle, Oregon Coast, Central Oregon, San Juan Islands, Washington, Park City, Moab, and then Tahoe, California. Yeah, beautiful. And you come from 360 Blue. That was your first big company in the space. One of the best brands in the market forever.

2:27Yes, agreed.

2:27Ashley Horsley: And highly respected. How are you going to apply what you learned there to such a a broad base of properties. It's very different, right? It's two totally different animals. I think at the end of the day, we're trying to execute the same thing for the guests and for the owners. We're trying to maximize revenue for our owners. We're trying to make sure that they have a seamless experience. We're trying to make sure that the guest experience is top notch and that they're getting the vacation that they've saved up for and deserve. And so the logistics and the the very tactical pieces of the business are very much the same.

3:05But then you're looking at it on a much different scale. At 360 Blue, a more luxury brand, you have the opportunity to do quite a bit of nice-to-haves and figuring out exactly what to do within this niche market. Whereas here, with such a national brand and not all of the homes skewing towards the luxury side, it's just, it's very different. but you're working the same business at the same time. You're just doing it with a very different and larger subset of owners and you have to rethink the way that you're doing things so that you're not always trying to accommodate the people who are coming into the homes on a private jet or are interested in renting a yacht.

3:46You're working with a different level of clientele and so you have to accommodate to their likings and to what their experiences need and want to look like as well. And so after five years out of the industry coming back, what are some of the big changes that you've seen, especially after acquiring some legacy companies? What are some of those changes in the last five years? I think that's a great question. I think the industry right now is going through a very significant change. Well, AI, AI, AI, that's like being private equity. We covered it all. Perfect. When I left the industry five years ago, private equity was really a bad word.

4:20It was a swear word. We didn't say it out loud. It was a swear word. And it was something that had been repeatedly seen as something that could set you up for failure. It had not been successful in the vacation rental space. Now, five years later, I think that private equity has found a way to be successful in the vacation rental space. And so that is a very that's very different for me. And then also the new technology, the AI approach, automation, offshore approach, nearshore approach. There's so much. And I think part of that is because of private equity, right? They come in and they have expectations around how you're going to utilize technology, how you're going to utilize automation, and where you're going to be able to make things more lean and more efficient.

5:05Whereas this started as a very mom and pop industry that I was a part of almost 20 years ago. And so to see how it's changed over the last 20 years and specifically the last five years skewing more towards private equity and more towards technology has been a learning gap that I've had to really make up for over the last year. Just trying to catch up with where the industry is today versus where it was five years ago.

5:28Ashley Horsley: Yeah, 100 percent. And so private equity getting into the space, it wasn't really in the space pre your return. And now there's a dozen, probably more. And it seems like a new one every other week is trying to poke around and see what's going on. What separates you guys with some of the other firms? Are you guys also trying to go deeper in the existing markets with acquisitions or expanding markets? Yes. Another great question. I think I do love our prime. I have to say this with a smile and a laugh. I do love our private equity group. I genuinely do. We're backed by an incredible group named Tribe out of Dallas.

6:13They really have been very great about showing deference to the people who know and understand the industry and not trying to force decision making or force processes and procedures or technology or even quarterly earnings reports. Like they have been very, very kind and flexible about the approach that's being taken. So I do think that that sets us apart. I've worked with other private equity groups where there was a much more financial forward focus. I also feel the approach that we need to be able to take in order to remain operationally efficient and make sure that we have what we need in order to provide the guests and the owners with the experience that they deserve, in my opinion, is to go deeper.

6:56We have selected markets that we know are already really great vacation destinations. And so it's already a destination that is heavily marketed outside of just the OTAs. And we feel like there's a lot of opportunity for us to continue to go deeper in those markets and just set up a broader, bigger infrastructure to be able to support what our guests and owners need. Yeah. Speaking of owners, you know, the Vecasa owners have probably been through the ringer in the last couple of years. What has been the messaging to owners? What have been the response as you guys have come in? Yes. The homeowners and the employees, honestly.

7:33Yeah, the employees too. Probably more so the employees. Been through a lot. But it's sort of one and the same, right? Because every time you remove someone that is known to their homeowner, it's felt. And it's disruptive. And so what we have tried to do is come in and establish trust. and that's easier said than done because every single time that there has been a riff or it has been an acquisition or a merger or a name change, they have probably attempted the exact same thing. And so we're trying to come in, we're trying to put boots on the ground, we're getting in the market as often as possible, I'm meeting with the homeowners, I'm meeting with the local teams, I'm setting up learning sessions, training and enablement sessions.

8:13We're working to be able to make sure that our homeowners and our employees alike feel like they understand what's going on, who we are, what we're trying to deliver, how they fit into the picture, how meaningful they are to what we're trying to achieve. And the more communication we can have on those topics, the more we're able to build that trust and that buy-in both from the homeowner and the employee standpoint. Yeah. It takes, you have like the messaging and then you'll have, you'll prove that with action. And really, I guess that's something that only time tells. And so that's great. You're just committing to that and showing that this time around, like this is different and you're a trusted brand.

8:47That's exactly right. I think acquisitions always look really good on paper or else they wouldn't happen, right? But you don't actually know the value of an acquisition until after it has taken place and you've had the chance to stabilize and really prove yourself out. So the value and the return on that investment and that acquisition, you really don't see and understand until you're able to understand how much churn did we recognize, how much retention on employees did we see? How well known are we in our markets? And so I think time will tell, but it is one of those things where over time we have to continue to really build trust with owners and team.

9:23Ashley Horsley: Yeah. Great question, by the way. All right. Last question. Okay. Is this your first conference back in the industry? And whether it is or isn't, The event here at Cassidy, what's the big takeaway or the learning that you've enjoyed the most? It is the second one since I've been back. I went to the executive conference for Verma, also a beautiful destination. The biggest takeaway is technology, AI, AI, AI, automation, technology, private equity. You still hear a lot of the same murmurings that you heard previously, that like private equity is really focused on the bottom line and quarterly reports, quarterly reports.

10:07I've heard that multiple times yesterday and it's not, not true. And there is a way to be both, right? There is a way to be private equity backed and a way to continue to still be hospitable to your guests and to your owners and to your team. And so it's just figuring out how do you strike that balance? And I think a lot of people on the stage the last couple of days have really tried to educate the people in the room on how they and their best practices have been able to implement that balance and establish a way that is technology forward, implementing AI, finding ways to use automation, offshoring, near-shoring, but then still checking the hospitality brand box.

10:47Ashley Horsley: Awesome. All right. Last, last question. What's your favorite market that you own? Oh, it's your favorite child. I have one of those two. Favorite market is probably, probably Park City. Fair. I love Park City. Fair. Yes. Same. I also spent a month there this summer with the team. And so I'm a little biased because I know them very, very well at this point too. Awesome. Well, thank you for joining us. We're glad to learn more about it. Thanks for having me. française

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