Pavilion’s Lino Maldonado on a New Model for Vacation Rental Growth

0:18Brandreth Canaley: 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 Guest Duval so far? Absolutely love it. I did not go last year and immediately had FOMO because of the pictures that were coming back. So we have to be there this year for sure. Yeah, Guest Duval 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.

0:51So I don't know what the other people are talking about these parties.

0:53Michael Goldin: 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. Yes. 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, making great acquisitions like Brandy's just done with the Gather team.

1:33And you guys come at it with a similar mindset, but a different approach.

1:38Michael Goldin: 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. Some 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.

2:13That'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, we'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.

2:48Michael Goldin: Yeah, and you guys have pretty recently, there's a reason why you weren't a guest about last year. You were knee deep in who knows what. You guys have pulled in together, what, 18 or 19 at launch. How 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. And 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.

3:21Brandreth Canaley: 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. So 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?

4:00Yeah, 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 founders. I 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.

4:34So we think it's critically important to have a good group of people that are not shy about what their strengths and weaknesses are.

4:42Michael Goldin: 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. Some key employees get centralized or fall off. And then the other route is leave it completely the same, don't touch it. Yeah. 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.

5:20The 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. I 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.

5:54but 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 yeah i think that's

6:14Brandreth Canaley: i mean any sort of change management with technology at these brands is tough um you know We've all been through examples of that. And so being here at Guestyville, you're a preferred partner with Guesty. 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.

6:51in some of these tools, a few that were here last year, and others are just no longer around. Yeah. Which tells you sort of the vision of the technology as a, you know, 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 50 cents 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.

7:29Brandreth Canaley: Big opportunity. Yeah.

7:30Michael Goldin: Yeah, absolutely. Well, you know, one of my oldest friends in the space, it's great to see you pull this all together. Glad to see you back out on the conference circuit as well. Yes. What's the what's been the biggest key takeaway for you? I guess you've out here. Gosh, guess what. 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. Really. I mean, it's really, it's night and day in some cases.

8:10Because in other conferences, it's the same people on the same stages talking about the same things that don't matter as much than some of the newer opportunities do today. AI is an example, right? I mean, if you're not doing something across the board there, you're missing tremendous opportunity.

8:24Michael Goldin: 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.