GMH STR Live From GuestyVal: AI, Acquisitions, and What's Next.

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0:19Good morning. Hey Brandy, good morning. Happy Monday. Happy Monday. Best day of the week. If you can tell we are not at home right now. No. We are out and about in Spain where Brandy is. is telling us the best restaurants, ordering for us, and navigating around Spain for the boys as usual. Yeah, Brandy and the boys go to Spain part two. I love being back in Madrid. I feel very nostalgic. I went to college here. So this is, although different over a decade later. So not to age myself. Don't say that. We are staying in a hotel right next to Capital, which is a club that we used to go to all the time.

0:56I heard it all night last night. I saw all the kids in line, and I was you. I was once you. So that's fun. Yep. Well, we've got a great episode today. Yes. We're here with a very special guest. Yes. Yes. Our chief commercial officer at State Terra, Alex Cisneros, because we have some fun news today. Breaking news again here on the show. Yes. So, Alex, do you want to tell us what the big news is? Yes. So we are super excited. We have completed a great acquisition. It's Gather. So we have added Hawaii to the great destinations that we have. So we are super excited. We are surpassing 2 ,000 great homes and properties that we have at State Terra.

1:41Yeah, it's really exciting. Andrea and her team have really built such an incredible business. The homes are stunning. I'm trying to figure out what angle I need to pitch to go do operations market research in Hawaii because it's just such an incredible business and we're really excited. So we definitely need to find a good excuse to go and spend quality time. And Michael, you're always welcome. Yes, we can have we can have a GMH summit. And Will behind the scenes is saying that he needs to come to. Well, we have to come with our producer, too. So, of course, maybe a State Terra GMH crossover event in Hawaii.

2:21That sounds like a point. Perfect. So on Gather, obviously a well-known large brand with higher end homes. It seems like Cetera is navigating more on the luxury side of things. Is that a big part of the strategy? Yeah, we definitely want to focus on a great experience. And some of that is a combination of good teams, good people, good product. And I think this really aligns well with what our other brands offer. So we are super excited because it's a little bit an elevated experience with great people. We have very knowledgeable local team members that are going to deliver a great experience. Yeah, and it puts a pin in the map in another one of the top five states in the country for short-term rentals.

3:06So Florida, Hawaii, Colorado, ticking the boxes here. Yeah, and Gather actually has a presence in California and Washington. So we are expanding now to the West Coast. And Hawaii, who doesn't want to go to Hawaii, right? Get ready for the time zones. Yes. Yeah, I think our our meeting schedules are going to be pretty difficult to deal with. Yeah. Time zones. Time zones are a lot. But yeah, it's really exciting. And being part of the team, it just feels like there's this injection of energy. And it's so great to bring on a team like the Gather Vacations team. So really exciting. And there were other big acquisition news here at Guestival.

3:50And we will be jumping into the episode here shortly. Brandy and I have interviewed Amiad Soto, the CEO of Guestival. Yes. And we're looking forward to sharing that with you right now. Yeah. So enjoy the interview and have a great rest of the week. Good morning, everyone. Happy Monday or whatever day of the week it is. I am here with Michael in Madrid at GestyVal with some very special guests. We have Amia, the CEO of Gesty, and Sev, the CEO of Smiley. And they have some very fun news for us today. Breaking news that Amia broke about 20 minutes ago. Do you want to go ahead and share some of that with us?

4:31Yes. So, first of all, welcome to GestyVal. We are happy and very excited to announce that Gesty and Smiley are joining forces. Thank you, Amia. Yes, he has finished the acquisition of Smiley and we are very very keen and very excited about our growth in France With the best PMS in France joining forces with yes, he we are very excited about it Tell us why this acquisition makes sense I think on the surface we we all understand it But growing a footprint with the largest PMS in France is is a no-brainer fold-in for you guys Yes, France is actually second biggest market for vacation rentals worldwide and and Seb and his team have worked incredibly well to build a very great business with a lot of loyal customers, and we looked into it for many years.

5:22I think the first time we talked was like three or four years ago. It's been a long relationship in the making, and it just came to fruition, and we're very excited about it. All right, so Seb, obviously, big summer for you. What made Guesty the ideal buyer for you guys? I think that's quite of a no-brainer. Our focus has always been on the quality of the relationship with our customer, the stability of the platform, and the innovation. And well, Gesty is by no question the leader of the world in these aspects. And so when you look at Zobu's choice for us, there was no question. So Gesty brings the best innovation that we can find on the market with a very robust platform, amazing team that is really global.

6:08So, ultimately, if we were to do such a transition, obviously, Gesteval was the only choice to be made. Yep. A complete obvious fold-in. I think it makes total sense for both of you guys. So, huge congrats and enjoy the rest of the show. Thank you. Thank you so much. And maybe Gesteval in France next year? Maybe. We'll announce that when it comes out. Yes. Thank you both. Thank you. Hello and welcome to another GMH mini episode. We are missing Jamie but we have another AirDNA representative with us. Sarah from the Barcelona office. Welcome to the show. Thank you. Hopefully I don't disappoint. Jamie's got some big shoes to fill but I'll do my best.

6:52Yeah are you having a good time in Guestival? I'm having a great time. I am tired and I am running on coffee. Yeah it has been an absolutely amazing event. I mean Guestival just knows how to They don't spare any expense. No, they don't. Everything has been fabulous. It's really so much fun. So you're here to tell us, we usually talk a lot about American data, obviously, because that's where we are most of the time. So why don't you give us a high-level overview? How has the year been going for, or the summer been going for the European markets? Yeah, sure. So I think the biggest things to call out is that demand overall in Europe and occupancy is slightly down.

7:25So down about 2%, more or less. But the ADRs have actually risen about 8%, which means that we've overall seen a rev par growth of 4 % across the board. So a lot of people may think, oh, no, Europe is slowing down. It's not slowing down. It's just a much more mature market now. And so we're catching up to how the U.S. operates. A healthy, mature market. Exactly. Healthy, mature. However, there has been differences across the board. So obviously there's been some macroeconomic changes in Europe. People are struggling. Fuel costs are higher. where taxes are inevitable and always rising. And so for operators, they've had to increase the ADRs just in order to make sure that they can make the bottom line.

8:05So that has definitely had some impact. And with fuel prices rising, that leads me to believe there's going to be more domestic travel. Are we seeing more domestic travel within a lot of countries in Europe? Depends on the markets. So what we've noticed is that the Nordics have really won out this summer. A lot of that is increased domestic travel, but also they've just had better weather. They have had much nicer weather. As the little warming gets worse, it gets hot in Southern Europe now in the summer. It is miserable in August. I don't want to be here. We've even been seeing, I mean, in the U.S., we've been hearing about the heat waves going through France and Spain and just like I saw these videos of the Danube just like so low and like things are being unearthed and that have been, you know, underwater for, you know, centuries, decades, whatever it is.

8:52So it's not surprising that people are like, okay, cooler weather. sun all the time in the Nordic countries. So are there any other surprise winners in this summer? Yeah. So the other surprise winners go on the other side of the European market. So we're seeing huge increases in travel to Albania and the other Balkan countries. So it's not just it's not just an overall decline of travel. It's just that travelers are changing where they're going. So the people from the Nordic countries are staying there and the people who used to maybe vacation in Spain or Italy or southern France or going somewhere else to try something new.

9:26Probably also because they're feeling the price pressure. And so it is still a cheaper market. But Albania is the biggest winner this summer outside of the Nordics so far. Have you booked your trip to Albania yet? I have not. You know what's really funny? I'm the total opposite of the statistic. I had booked a trip with my girlfriends to Albania. And I'm the designated driver always because everybody else is a scary driver. So I decided that we love hiking. So we were going to do this uh really cool hike up in the up in the alps i saw the road on youtube and absolutely freaked out and so we changed our plans and we went to the north of italy and stat great hiking there it was yeah it was great hiking but we did a much more traditional european holiday it was great but yes it was it was the first on our radar actually because it's coming a lot more popular okay so you hear a lot more people talk about it interesting it's funny how the the new hip countries come and go um or come and stay right croatia five years ago was everyone's going there and now it's like a known quantity and everyone loves it so albania is the next good to know yeah for sure all right so the flip side of the winners are losers who are some of the the losers of the data the losers of the data are spain unfortunately breaks my heart and germany but for two very different reasons so in spain there has been a lot of increased regulation over the last several years so there's been a massive decrease in the number of listings um there's also been a decrease in the demand in a lot of these urban markets people are kind of tired of the traditional city destination they want to get out more in nature yeah which is surprising on the flip side of the answers that question which is germany because germany has seen the complete opposite so germany has actually seen a decline and their traditional holiday markets that are much more domestic travel focused.

11:17The main reasons for that likely are economic as well. So they're looking for cheaper places to go. Even if essentially if you're going to Albania, it may be cheaper for you to fly to Albania, rent a car, pay for fuel, than it is for you to drive or caravan, which the Germans love a caravan situation in Germany. And do you contribute any of that to changes in generational travel preferences? Like if the whole thing was always going to this one holiday location in Germany and now there's a younger generation that wants to travel? Or do you think the economic driver is mostly what's happening? It very well could be.

11:50I mean, it is a change that we see across Europe where the popular destinations are changing as to where people are going. So there definitely could be a generational component. But the Europeans are feeling the economic hurt from the economy for sure. Yeah. And the European market looks differently typically, right? the spread isn't as heavy. Airbnb, Booking.com is a major player here. What's the standard booking demographic over here? Yeah. You mean in terms of the OTA itself or the age of the book? OTA share. Yeah. OTA share. Booking.com is huge, but it depends again on the location. So there are some markets like Spain, for example, where you have 20 plus percent of unique inventory on Booking.com.

12:34And you may have others where it's not even Booking.com. It's a local player. So the Nordic countries are a great example of this. Germany is a great example of this type of market where they have... Was it Fedeva or something like that? Yeah, it's like Fedeva. And then they had... I'm really bad with the names of these things. I'm not even going to try and butcher it. But they have domestic platforms. And the same in the Nordics. They have domestic platforms that are much more like mom-and-pop style, which is why the home-to-go acquisitions have been really interesting because it's bringing the online with the traditional markets and how they work there.

13:11So you've come to a number of guest evals, right? This is my second. Okay. Yeah. My first was in 2018, I think. Okay, so it's been a while. It's been a while, yeah. And in your home country. What are you hearing people talking about the most here? I think the thing I'm hearing people talk the most about is capturing revenue and increasing revenue. It's especially from the European market. I think in the U.S., it's always been much more mature. And so adoption rates of things like dynamic pricing have always been high. Whereas in Europe, I'm hearing a lot more operators asking, how do I get better margins?

13:48Especially with the squeeze and the lower occupancies, they have to get that from somewhere. And they have to get it from higher ADRs. And the way to do that is dynamic pricing. So there's been a big uptick in interest from operators here. Of seeing this is necessary rather than just an expense line. Yeah, I was curious if like, you know, adoption or interest in AirDNA has been slower in Europe because I was talking with a friend of mine from college who's in the travel space in Spain. And he was like talking about how the hotel operators like they will use an ancient PMS because they've known like the guy that's come and like, you know, it's like on a local server or whatever at their hotel.

14:24And that they don't really they haven't really been paying attention to the trends like any of these vendors here. So are you seeing now more interest in people wanting AirDNA data and actually caring about the numbers? Yeah, especially when it comes to the dynamic pricing component. So with the launch of ADAPT, we've seen a huge uptick in the European market, which has been great for us because it's no longer a nice to have. It's table stakes. You know, you can't just have someone in the back office like manually adjusting rates all the time. It's true. I think especially when it comes to something like a PMS operator.

14:55And I mean, Guesti, that's why there's so many acquisitions going on, especially to enter the European market. I was chatting with some folks from Guesti yesterday. The markets here, you have an Italian that wants their Italian PMS, that only operates in Italy and everything's in Italian for them and all of their support is in Italian. And it's not just a language thing. It's a trust issue. It's I want to support somebody from my local country. And I think a lot of times as Americans, we think, OK, Europe, the same as the US, just because size wise, it's pretty similar. Totally different. You're talking about 27 different languages, cultures.

15:26In Spain, you got five different languages. So add that dimension to it. It's a totally different ballgame. And it's like having a bunch of little mini kingdoms. Yeah. You touched on the acquisitions guest he's made. We talked earlier with Ashley Horsley, who's with a private equity-owned or backed group. Brandy is as well. PE acquisitions are happening all over the U.S. with dozens of organizations. Are you seeing any of that in Europe? It's much slower. It's much slower. There are a few who are trying to break into that, but two things happen there. One, it's less common in Europe in general.

16:04And two, the people who own these companies in Europe, it's much more of a lifestyle business for them. And they don't want to sell. They're not trying to get out. They either really enjoy hospitality and it's been something that's been ingrained in them and their family. It's not like in the U.S. where you might have somebody who started a business with their best friend and they've been in it for 10 years. and it's like, great, we've grown it, let's sell it. No, here it's their life. You know, you speak with somebody who, I was chatting with somebody on the bus yesterday who manages a bunch of Italian villas.

16:34Good person to know. Her whole life is there and she absolutely loves it. And it's about the local concierge experience and that's what she gets her joy from. So it's not, of course we have to make money, right? It's a business, but in Europe it's, I think always the take is it's not all about money. It's about the balance. We have very American attitudes towards that. But, you know, I mean, on the flip side of that, there are a lot of operators in the United States, the smaller ones. Like people that we, you know, sometimes people disparage and call them hobby hosts. But the people that have one to three properties that they were, they get a lot of joy from really doing that.

17:08So I understand it. I mean, and I give a lot. It's a it's a hard business to be in for the people that are just like really excited about providing that guest experience. experience and I can, there's always, I think they're like, oh, these Americans just trying to come in and make their money. And I'm like, oh yeah. I mean, yes. Yeah. There is a little bit of that though. Even with some, some of the American clients that I work with and you'll chat with them and you say, great, what are your goals? You know, are you looking to expand? Are you looking to grow? It's like, oh no, no, no. I've calculated that in order to have the current lifestyle I have, which is enough time with my kids and to give the guest experience that I want, it's 35 listings or a sticky listing.

17:44So they have a number in their mind and they're not going I love it. You know what, I was on a panel yesterday that was about when you hit around like 150, there's like things really start to change and like what scaling above that looks like. And you're totally right. Like there are these points and it can be listing count, it could be revenue, but like there's some sort of number where things start to get really complicated. And I think that if you are like, I am set at this, it's not all about growth. It's not all about constantly achieving a bigger number. If you can make your money, you can pay your debt service or whatever it is that you have and fund your life.

18:20Like that is also a very noble pursuit. Like it is. It also, it leads back to another trend that I'm seeing a lot, especially in the U S but somewhat in Europe where a lot of our operators are off boarding properties that are too much of a headache, too much of a hosting experience that there's too much in the weeds. And so they've recognized that with one property that's earning 170 grand, 200 grand a year, that's better than having five that make 35 grand. Yeah. And it's creating a hole. Like there's some, there's some, there's some properties that are not going to have property managers for them because nobody wants them.

18:54Well, and I think, but like, I had this experience at my previous company where we started to look at buildings. We did, you know, full building multifamily, but looking at these buildings where you're like, do we actually need this building? Does this building actually contribute? Like what are like the hassle of driving an hour away to go service, like all of these different components. And I think that now there's a bit of a correction. You know, it's not like it is about the quality of what you have. And maybe it will spur some of these homeowners that haven't chosen to, you know, update the furniture or fix the roof or whatever it is.

19:25Or they're a pain to deal with, you know, on a relationship basis to maybe make some changes or they'll be self-managing or something like that. Yeah. Or just disappear. That's the other one. And they might just disappear. That's dark. That's dark. That's true. Well, it's been a long time coming for you to join the stage with us here. And for those listeners who don't know, Sarah and Leo were part of GMH Europe pre-Skift acquisition. And we've always talked about doing cross-collaboration shows. And glad we could finally do it and have you on. Me too. And in person. And in person. Even better.

20:00Even better. Even better. So thank you for joining us and bringing the data for Europe. Thanks so much, Megan. Thank you. Hello, we are here with Ashley, COO and president of Avari. How is guest eval 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. Puts them on notice. But did not notice.

20:34Exactly. 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 awesome. And he said, no, I have this opportunity. These two guys, you're going to love them. Just hear them out.

21:09And 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. Yeah. And you guys are one of the private equity groups that has bought a lot of the legacy Vacasa Casago markets. Right. Right. And how many in total is that and what geographies are you guys in? Sure.

21:45So 27 unique markets and we all 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. Yes, agreed. And highly respected. how are you going to apply what you learned there to such a broad base of properties? It's very different, right? It's two totally different animals.

22:29I 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 very tactical pieces of the business are very much the same. But 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.

23:08Whereas here, with such a national brand and not all of the home 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. You'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.

23:41And 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. Yeah, we covered it all. Perfect. When I left the industry five years ago, private equity was really a bad word. It was a swear word. You 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.

24:20It 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.

24:54Whereas 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. 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.

25:36What 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. They 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.

26:17Like 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. We 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.

26:58And 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. Yeah, the employees too. Probably more so the employees. Been through a lot. But it's sort of one in the same, right? Because every time you remove someone that is known to their homeowner, it's felt.

27:33And 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. We'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.

28:15And 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. That'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.

28:49So 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, Um, but it is one of those things where over time we have to continue to really build trust with owners and team. Yep. Great question, by the way. Um, all right. Last question. Okay. This, is this your first conference back in the industry and whether it is or isn't the event here at Gasty, what's the big takeaway or the learning that you've enjoyed?

29:31Yes. 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 private equity is really focused on the bottom line and quarterly reports, quarterly reports. I'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.

30:09And 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. Awesome. All right, last, last question. Okay, this is good. What's your favorite market that you own? Oh, it's your favorite child. I have one of those too. Favorite market is probably Park City.

30:52Fair. 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. Thank you for having me. We're glad to learn more about it. Thanks for having me. Hello, hello. We are here with Lino, CEO of Stakeholders here in beautiful Madrid. How are you doing today, Lino? Wonderful. Another day in paradise. I know. It's so nice out. Yes. Beautiful. How are you enjoying Guestival so far? Absolutely love it. I did not go last year and immediately had FOMO because of the pictures that were coming back.

31:29So we have to be there this year for sure. Yeah, I guess he really does know how to throw a party. That's been the consistent party line since we've been talking to people. What's one of the best impressions or biggest takeaways you've had so far? To be clear, I'm here for work. So I don't know what the other people are talking about these parties. Well, you'll see tomorrow or today. I saw you at 2 a.m. last night. Just kidding. I was not out. So you might have been out. You might have just told on yourself. Nor was I. Okay, good answer. Out like a light. Good answer. Well, you know, I've known you forever.

31:57Yes. You've been in the industry forever. You've seen the resort quest to Wyndham to Vacasa, you know, the whole saga. Yes. But we're entering what feels like a very different phase of the industry. Yeah. A big maturation period where there's a lot of private equity groups hunting around, around making great acquisitions like Brandy's just done with the Gather team. And you guys come at it with a similar mindset, but a different approach. Tell us a little bit more about the stakeholders approach and what the companies and the capital behind you guys are doing. Sure, yeah. So there's a couple of great models in the industry.

32:39Some of the historic ones have not been successful, and we've all seen and heard those stories. Won't spend a lot of time there. but we think that there are models out there that are a really good way to sell your business and exit the industry right that's not us we think that franchise models are spectacular and they're the right fit for the right entrepreneur that's just looking to enter the business very easily be told what to do what to wear what your logo looks like how to talk to guests and the like that's fantastic as well we are creating the third model in the industry which is the best way to grow your business and so although we're buying 100 % of the companies.

33:14We're allowing the owners and sellers of these businesses to roll forward a significant portion of their equity. In fact, our lowest roll forward amount is higher than the highest amount from some of the other rollover strategies that they allow. So we believe that the people who should benefit the most from these strategies are the ones who actually founded and grew their companies. Novel concept, but it actually is what makes us very different. Yeah, and you guys have pretty recently, there's a reason why you weren't a guest about last year. You're knee deep and who knows what. You guys have pulled in together, what, 18 or 19 at launch.

33:51How fun was that? Not fun at all, actually. We closed literally this May on our first 20 companies. We bought them all in one day and got to instant scale, which was part of our plan. There's probably a really good reason that this has never been done before. Out of 100 reasons, I believe we found 99 of them, but still pulled it off. Nice. Well, now you have all those answers, I guess. We have all the answers. So, yeah, it was a great way to come together with some initial scale and then now work on the additional opportunities to continue to scale. We'll do probably three to five per month in 2027 and beyond.

34:29So we've got a pretty strong velocity ahead of us. You're going shopping. We are going shopping, baby. See you out there. Competition. Competition. No, but so, you know, a lot of these founders are staying on. They're invested in the business. Now, founders usually have a personality type. Yes. And so how has that been kind of integrating all of these, you know, great entrepreneurs into the business? Yeah. So that's a great question. I will tell you that we actually have a scorecard system that includes the founder profile. Yeah. We have a foundational component of decision making that we do not do business with jerks, not owners, not guests, not, you know, founders.

35:05I love that. And we think the hospitality business is a great, fun business to be in. And we think the entrepreneurs who built these businesses are, if you assemble the right group of them, they can be more accretive, share best practices, share what they are not good at, that we can allow others to help them move the needle on their businesses in those areas as well. So we think it's critically important to have a good group of people that are not shy about what their strengths and weaknesses are. Yeah, and we've seen several different models of this where companies roll in, here's your tech stack, day one, and that creates some friction at the local level.

35:45Some key employees get centralized or fall off. And then the other route is leave it completely the same, don't touch it. And you guys are somewhere in the middle? I would say we're pretty close to the middle. There's three main differentiators, I think, for us. First of all, we think the brands matter. We think they have a tremendous value in the markets they've served. In some cases, decades worth of guests coming to the same brand. The owners know them. The company culture is built around them, so the brands have good meaning and should be well protected and maintained in most cases. We feel like the entrepreneurs who built the companies, keeping them involved in the business but eliminating some of the busy work.

36:29I like to say we centralize the headaches, but localize the businesses. Those things are critically important. And then the third thing for us is the disruption in technology, right? Blessing and curse in technology, as you know, years ago, not a lot of good technology. Today, really good technology, but not integrated. But at the same time, disrupting a tech stack in one of the local brands is a really, really difficult thing to manage. The reality is you don't have to do that to the level today that you did just a few short years ago. And so we believe those three things are critically important to long-term sustainability in the hospitality business that we're growing.

37:05Yeah, I think that's, I mean, any sort of change management with technology at these brands is tough. You know, we've all been through examples of that. And so being here at Guestyville, you're a preferred partner with Guesty. Yes. So I guess not even just related to Guestyville, what are some of the technology takeaways that you have from this conference? Well, you always come to these things and you look for the new, most innovative products and services and the like, and how you can build those into your, whether it be guest flows or reputation management or whatever. I will tell you that I'm seeing a little consolidation already in some of these tools.

37:43A few that were here last year and others are just no longer around, which tells you sort of the vision of the technology as sort of their platforms. They provide a service, but if you don't deeply connect the service to the current stack or your workflows that you're trying to automate or create more efficiency, it's not a long-term play. So we take a slow but steady approach. Can we save$0.50 per user per month by consolidating everybody onto a single widget of some kind? Yes, but the disruption to that business underlying is far more disruptive. Big opportunity. Yeah. Yeah, absolutely. Well, you know, one of my oldest friends in the space, it's great to see you pull this all together.

38:29Glad to see you back out on the conference circuit as well. What's been the biggest key takeaway for you at Guest Eval here? Gosh, Guest Eval. First of all, the level of engagement. I think I heard early that there is twice the number of stage presentations as there even was last year. The quality of the content is so much better. than in some of the other conferences that I've been to. So congratulations. Yeah, so, really. I mean, it's really, it's night and day in some cases. And in other conferences, it's the same people on the same stage just talking about the same things that don't matter as much than some of the newer opportunities do today.

39:09AI is an example, right? I mean, if you're not doing something across the board there, you're missing tremendous opportunity. Yep, AI and PE. Those are the two acronyms that everyone's talking about. Yes. So, Lino, thank you for joining us, and we're excited to track the continued success. I appreciate it. Thanks, guys. Appreciate you having me on, and I look forward to the next couple of years in the space. Sounds good. See you soon. Thank you. All right. We are here with Will Reynolds. Just got off stage at Guest Eval, and already can tell it's going to be one of the best discussions of the week.

39:43So, Will, do you want to do a quick introduction of yourself? Sure. I'm Will Reynolds, founder of Sear Interactive. and I think I'm like a concierge of the internet. Like I like helping people find great things on the internet. So it kind of fits that I'm here today. Yeah, perfect. Well, we're excited and the room's already been buzzing about you. The line of people to talk to you afterwards was fantastic. I know you were like, first session of the day, really knocked it out of the park. Yeah, set the bar high, man. Let these people set their game up, you know? I know, I have a session later. I'm like, oh no, okay.

40:13So one of the favorite points that I heard was this trap that people are getting into of building over engineering AI, putting it in too many places and really losing that human touch. Do you want to describe that for us? Sure. Well, so one of the things that I talked about, I was supposed to be a 45 minute session. So we have to cut it down. So I missed some 20s. Right. But one of the biggest things I realized in my own business was I was building more content than I was getting social traffic. And I'm like, wait a second. If nobody cares about this content enough to share with their friends, why am I writing?

40:47And what happened is as I lost marketing staff coming out of the pandemic, I didn't rehire people back. And I realized that when I got to zero marketing staff, I 10x my social traffic and I went, well, what was different? I produced about 90 percent less content and every piece that I wrote, I cared deeply about. And with each one of those, they got picked up by trade publications. They got picked up by all the influencers. They got picked up in people's private WhatsApp groups. And the conversion rate on social for me is 5x the conversion rate out of AI or search. So my business grew by writing less content.

41:21Pipeline leads, all that. Less is actually more in the AI era when everyone's thinking more is better. I wish people would apply that to their AI written emails that I keep getting. Yeah, no, but it's interesting. It's cool now, but a lot of people aren't thinking, a year from now, do we really want everybody to write 100 pieces of content a month? It's like, no, I'll just hold off for the one person that seems like they're writing something that they really care about. Yeah, 100%. A lot of people in the room are heavily reliant on Airbnb and Vurbo for their bookings. But I get the impression that your take is now is a chance that they can gain a lot of that market share back.

42:03Is that accurate? Extremely accurate. So I have an example that's not in the industry, but if you search for the word ethical jeans, so you're looking for ethically made jeans on Google, Banana Republic ranks like number five. Banana Republic is not a brand that any of us thought of when I said the word ethical jeans. No. It's not in our hard wiring. You may not know an ethical jeans company, but you surely didn't think it was Banana Republic, right? So there's this company called Nudie Jeans, and Nudie Jeans, who I love. Great name. Yeah, right? Nudie Jeans does all these things to make sure that their jeans impact the environment as little as possible.

42:38If you buy Nudie Jeans, they will repair your jeans for free for life so you don't buy new jeans because every pair of new jeans negatively affects the environment. I'm going to go buy some jeans after this. They have a store in Madrid. And if you ever rip them, you can come back, get them fixed, free forever. What's your commission? Zero. Zero. Zero, zero, zero. Nudie, you need to give him a link or something. I've been talking about this for years. But here's my point. When you go, so how did Banana Republic rank in Google for ethical genes? They went to the bottom of the page and put the word ethical genes a bunch of times, a few words, and they showed up for something that wasn't who they authentically are.

43:14Right. In an AI world, I've run that search maybe a thousand times. Banana Republic has never shown up. So it's like your brand now has to be about the thing that you say you want it to be about or your visibility you used to get in Google is done, which means Airbnb. is able to, because of their brand heft and their domain authority in Google, was able to rank for things that they really didn't write the best content in the world on, ChatGPT is like, we don't believe you. We're going to actually get content from people that are local that we have seen over and over again, which is a massive opportunity for people in this industry.

43:50Yeah, all the people that had like the text in white just like hidden in their websites. It's like, that's over now. For a while, that was working on ChatGPT as well. Oh. It was. But ChatGPT 5.6, actually about ChatGPT 5, started making a massive change that made that stuff stop working. So another thing about short-term tricks, be careful. If you're out there and you're a brand, the problem with short-term tricks is, remember, Gemini, Claude, ChatGPT, they have unlimited compute. They will throw unlimited compute at your spam and figure it out and knock you out pretty quickly. So, like, stop trying to trick unlimited compute.

44:31Don't try to trick it. Like, just do the stuff that they want you to do. They're kind of smart. Speaking of kind of smart, you had probably 10 actionable items for people to take home. Give us three of those real quick. Search ChatGPT for strengths and weaknesses of your brand. then see whether or not you agree or disagree with that. That's number one. Number two, take all of your content. If any of your content gets 90 % or more of its traffic from Google search or AI, you're building content nobody wants and shares with their group, which means you're never going to build a brand. You're never going to win over hearts and minds.

45:06Third tip, ChatGPT tends to like brands more that publish studies and data. And guess what happens with studies and data. They end up more and more in journalist queries who are doing deep research on a topic. It's a great way to grow your brand. So we have done a lot of studies that ended up in deep research for topics around our space. And as a result, our traffic from major publications in our industry year over year is up 45X. I think a really great example of that for property managers could be taking your actual case studies of comparing, like, you know, trying to get a homeowner to, you know, improve their home and buy new furniture, doing the case study of all the homes that did that, what the reviews look like, how the revenue improved.

45:55Oh, so this is one of the things that I did is I scraped a bunch of reviews off of Airbnb just to see what was common about the top performer in my space. So I did this, I'm like learning this industry in real time. So I'm like, I'm going to try to do my best at this presentation. So I'm learning. So I'm How do you scrape Airbnb? So I get these top 150 results for the best Airbnb in Blue Ridge, Georgia. And then I took somebody who just launched their new listing and I compared the two. And it was like, if you want to be like the number one group, do things that make people mention you by name in their reviews.

46:29It was one of the craziest things that I saw. Is you're like, oh, all the top places. They're like, Barbara was amazing. The actual humans behind it. Humans. that's what we're talking about here. Like you keep thinking your little AI bot's cute, but when people realize that your AI bot will is not actually will, people don't like being tricked. So if you are going to use AI to scale communications, just tell them it's a bot. Don't try to do the like it's me, but not me shit. Because when it's - You could just say it's an assistant. It's an assistant. I have an AI assistant that's helping me get back to you faster, but really, you know what's better than that?

47:03You getting back to me faster. Yeah. Yeah, and one of the points in your presentation that I loved. When guests review online or make comments on Reddit or on Google reviews, a lot of people in this space say, give us your email, we'll send you a note, we'll take this discussion offline, we'll remedy it. Why is that the wrong approach? So the reason why that's the wrong approach is when you start to realize that ChatGPT and all these guys are indexing Reddit, it means they've indexed this page that says a negative thing about someone's experience with your brand. That page is in the index. You don't know if your response to that is in the index.

47:41If you take it off of email, now you saying, I care about you. I'm sorry. This was your experience. You know, and everybody, even if you do it online, don't do the freaking copy and paste answer that everybody gets. Oh, I'm so sorry. We really care about your blah, blah, blah. What would be a lot better is, Hey, this is the third time somebody has said this about this property that upsets me. here's your money back and I'm going to create a record publicly on my website that shows how I'm improving it and I will update this thread on how I'm becoming a better business. Done by zero companies would instantly build a brand in your region.

48:17I love that. I love that. And then the other piece that very quickly helps your brand on AI was a Trustpilot. Trustpilot. Yeah. So Trustpilot commissioned us for a study and what we realized. Another one of those studies. Another one of those studies? Data. Data, baby. So Trustpilot commissioned us for a study to pretty much say, like, what are the impact on AI when people have no reviews versus when people have one to 13 reviews versus 13 or more? And literally, if you have no reviews on Trustpilot, you have a 1 % chance of being recommended on the prompts that we track where Trustpilot reviews were showing up a lot.

48:52And if you have one to 13 reviews, you had a 54 % chance of showing up So it's important to be on the review sites because the review sites are hardwired into the brain of ChatGPT 5.6. So when you think of B2B software, it's like G2, dog. So if you're not on G2 and it searches G2 only, not your website, it's searching G2 and you're not there, then it doesn't know what you are, what you're about, et cetera, or if things are negative, even worse. So add Trustpilot to the list of platforms right now. Less AI slop, more trust. Less AI slop. But what I would also say is it's always data. Trustpilot was for certain types of brands and products.

49:36I would say what are the review sites most reviewed in the hardwiring fan out is what it's called, in the fan out of ChatGPT. And whatever that is in the hotel review space or the vacation rental review space, that's where I would make sure I was getting reviewed. Wonderful. Well, appreciate the time today. It was great. Keep it short and sweet. I mean, honestly, maybe you come on the show another time. This is fascinating. We could talk about this for a long time. I think I would learn a lot, too, after talking to this guy. I think I would learn a lot, too, and I would love to kick it with you guys if I can.

50:07Awesome. Great. Well, thank you so much. Thank you.

50:25Thank you.